[Malaysia] New expat employment policy in force from June 1

In Malaysia, a revised Expatriate Employment Policy will be imposed from June 1, 2026, introducing higher minimum salary thresholds and tenure limits for Employment Pass holders across all sectors, Business Today reports.

The policy was announced by the Ministry of Home Affairs Malaysia (MOHA) last month following Cabinet approval granted on Oct 17, 2025. 

It will reportedly restructure salary requirements and employment durations for expatriates while encouraging companies to prioritise the hiring of local talent.

The chief executive officer of Malaysian Investment Development Authority (MIDA) stated that the new framework aims to balance workforce localisation efforts with Malaysia’s continued appeal to foreign investors.

The revised policy will see expatriates under Employment Pass (EP) Categories I, II and III subject to the following updated eligibility criteria:

• Category I: Minimum monthly salary increased to RM20,000, with a tenure limit of 10 years.

• Category II: Minimum monthly salary revised to between RM10,000 and RM19,999, with a tenure limit of 10 years and a mandatory replacement plan.

• Category III: Minimum monthly salary raised to between RM5,000 and RM9,999 (or RM7,000 to RM9,999 for specific manufacturing sectors) with a tenure limit of five years and a mandatory replacement plan.

Expats in all three categories will reportedly continue to be permitted to bring dependents.

All new and renewal applications submitted on or after June 1, 2026, must comply with the revised requirements.

According to MIDA, the introduction of replacement plans for certain categories is part of moves towards a stronger emphasis on knowledge transfer and succession planning, ensuring that Malaysian employees are gradually equipped to assume roles currently held by expatriates.

MOHA will reportedly organise engagement sessions with industry stakeholders and employers to explain the implementation mechanism and transitional arrangements, and facilitate a smooth transition.

Source: Business Today

In Malaysia, a revised Expatriate Employment Policy will be imposed from June 1, 2026, introducing higher minimum salary thresholds and tenure limits for Employment Pass holders across all sectors, Business Today reports.

The policy was announced by the Ministry of Home Affairs Malaysia (MOHA) last month following Cabinet approval granted on Oct 17, 2025. 

It will reportedly restructure salary requirements and employment durations for expatriates while encouraging companies to prioritise the hiring of local talent.

The chief executive officer of Malaysian Investment Development Authority (MIDA) stated that the new framework aims to balance workforce localisation efforts with Malaysia’s continued appeal to foreign investors.

The revised policy will see expatriates under Employment Pass (EP) Categories I, II and III subject to the following updated eligibility criteria:

• Category I: Minimum monthly salary increased to RM20,000, with a tenure limit of 10 years.

• Category II: Minimum monthly salary revised to between RM10,000 and RM19,999, with a tenure limit of 10 years and a mandatory replacement plan.

• Category III: Minimum monthly salary raised to between RM5,000 and RM9,999 (or RM7,000 to RM9,999 for specific manufacturing sectors) with a tenure limit of five years and a mandatory replacement plan.

Expats in all three categories will reportedly continue to be permitted to bring dependents.

All new and renewal applications submitted on or after June 1, 2026, must comply with the revised requirements.

According to MIDA, the introduction of replacement plans for certain categories is part of moves towards a stronger emphasis on knowledge transfer and succession planning, ensuring that Malaysian employees are gradually equipped to assume roles currently held by expatriates.

MOHA will reportedly organise engagement sessions with industry stakeholders and employers to explain the implementation mechanism and transitional arrangements, and facilitate a smooth transition.

Source: Business Today