Malaysia: How To Apply For A Work Permit And License In Malaysia

Last Updated: 6 June 2018
Article by Lim Lee Kuan

As a foreigner working in Malaysia, there are a number of procedures and rules to follow in order to get a work permit and license. If a company does not comply with the requirements, this will impact resources and ultimately affect business operations.

According to Malaysia's Immigration Act, those who fail to comply with the regulations can be fined up to RM10,000 or imprisoned for not more than five years or both. An expatriate must possess a valid national passport or other internationally recognised travel documents valid for travel to Malaysia for at least 6 months from the date of entry into Malaysia. No expatriate is allowed to work without a valid work permit.

However, the period a foreigner can stay in the country is limited to not more than 90 days, generally, and companies should do their best to assist their employees to apply for a legitimate work permit within that period.

PROCESS TO APPLY FOR A WORK PERMIT IN MALAYSIA

There are three simple processes a company needs to follow in order to apply for work permits:

1. Before applying – check eligibility

Prior to applying for a work permit, foreigners must get a job offer letter in the country from a sponsoring company. Requirements are different for each category of work permit. However, applicants must hold a passport valid for at least 18 months.

Other forms of work permits for foreigners in Malaysia:

A Professional Visit Pass (PVP)

A PVP is issued to foreigners who provide services to a Malaysian company on behalf of an overseas company on a temporary basis, usually up to 12 months. Under the PVP, foreigners are still employed by their companies in their home country. The application to the MID must be submitted by the Malaysian company prior to the entry into Malaysia.

Residence Pass-Talent (RP-T)

This is a 10-year renewable pass issued by TalentCorp Malaysia and MID for highly qualified foreigners to continue residing and working in Malaysia.

A skilled foreigner can apply for the RP-T if he/she has fulfilled the following criteria:

  • has worked for a minimum of 3 years in Malaysia
  • holds a valid Employment Pass (EP) at the time of application
  • earns a basic monthly salary of minimum RM15,000 in Malaysia
  • has a Malaysian income tax file number and has paid income tax for at least 2 years
  • holds a PhD/Master's/Bachelor's Degree or Diploma in any discipline from a recognised university or a professional/competency certificate from a recognised professional institute
  • has at least 5 years of work experience

2. Apply for an expatriate employment pass – via Expatriate Services Division (ESD) online system

Upon the verification of both employer's and employee's requirements fulfilment, companies can proceed to apply for the pass by creating an account online and carry out the rest of the application procedure.

3. After expatriate employment pass application's approval – endorse passport and collect employment pass

When the approval for the application of the employment pass is available on the ESD online system, you will need to endorse your passport and collect the working permit at any MYXpats centre in Malaysia.

OTHER IMPORTANT KEY CONSIDERATIONS ABOUT EMPLOYING FOREIGNERS IN MALAYSIA

A foreigner has the right to choose to contribute to his or her country pension plan or Malaysia's Employees Provident Fund (EPF) which allows a tax deduction up to RM6,000 per annum.

Employers are encouraged to plan ahead on the number of expatriates required in each year as work permits are issued two to three months from the date of submission.

The MID may direct the application to other governing authorities before processing depending on the nature of business of the company. For example, a company that is involved in distribution is required to register and obtain approval from the Ministry of Domestic Trade Co-operatives and Consumerism before it can apply for the work permit from the MID.

Employers need to notify the Inland Revenue Bard (IRB) on the employment of new employee within ONE month of the date of commencement and to make deductions (such as salary, bonus, benefits-in-kind and value of living accommodation) every month in accordance with the Monthly Tax Deductions (MTD) Schedule.

Talk To TMF Group

Applying for an employment pass can be frustrating and time-consuming if you are not familiar with the process.

Get help from local experts. TMF Malaysia offers a full range of corporate services to help clients reduce risk, achieve compliance, control costs and simplify operations. Our team in Malaysia also provides payroll, corporate secretarial, trustee and fund services and are familiar with every aspect of global-standard accounting. For more information, talk to us.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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