Hiring Foreign Employees In Malaysia

Since 2005, many Malaysian companies have yet to employ foreign employees directly. Instead, recruitment services outsource foreign employees to businesses. A modification made in 2012 to the Employment Act of 1955 codified this outsourcing practice. 

In this structure, work permits are tied to the recruitment agencies, not the enterprises to whom foreign employees are outsourced.

Companies prefer this system since non-employees are not subject to collective bargaining agreements and can be hired for specific durations before returning to recruitment agencies. Companies that employ foreign employees must acquire foreign quota approval from the Ministry of Home Affairs' Local Approval Centre.

Sectors that are allowed to hire foreign employees:

Foreign workers between 18 and 45 may be hired by Malaysian companies in the agriculture, construction, manufacturing, plantation, and services industries.

Levy Payment Rates

1. Manufacturing – RM1,850.00

2. Construction – RM1,850.00

3. Plantation – RM640.00

4. Agricultural – RM640.00

5. Services – RM1,850.00

Employers should be aware that only certain positions are open to foreigners, which are typically highly skilled or technical professions that locals cannot fill.

Among the positions available are:

• Top management positions in Malaysia for foreign companies
• Professional or mid-level management positions
• Jobs requiring advanced technical skills and expertise

Individuals who are not permitted to enter Malaysia:

1. He has actual work or will become a pauper because he cannot prove that he can sustain himself and his family;
2. Has a mental condition or an infectious/contagious disease;
3. Refuse medical examination;
4. Have been convicted of a crime or have ties to the conviction;
5. Prostitutes or anyone residing and benefiting from prostitution;
6. Attempting to introduce prostitutes or other individuals into Malaysia for prostitution or immoral purposes;
7. Vagrant or persistent beggars;
8. Any written legislation deems entry into Malaysia to be illegal;
9. Advocates of violence and the destabilization of the government and its public authorities, as well as those who teach and encourage the destruction of property, are subject to incarceration:
10. Any individual linked with or a member of an organization that promotes the principles mentioned above/beliefs;
11. Minister-designated as undesirable;
12. Considered undesirable by the Director-General as a result of the persons' repatriation by their home country;
13. Lacking valid travel documents or being without them;
14. Family members and dependents of prohibited persons; and
15. The Director-General has revoked a pass or permit.

Remember!

1. After all, requirements are met, employers must submit the required documentation to the Immigration Department.
2. Upon quota approval, the employer must submit to the Immigration Department the employment pass application and a letter explaining why a foreigner must fill the position. 
3. Once the employment pass has been authorized, a letter of approval will be sent.

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