Malaysia is set to roll out a major overhaul of its expatriate visa scheme starting this June by doubling the minimum salary requirements for skilled foreign workers.
According to a report by Asia Nikkei, this marks the first significant revision to the scheme in nearly a decade, with the last major update taking place in September 2017.
The federal level decision applies across all economic sectors and is part of the government’s proactive effort to secure more quality job opportunities for Malaysians amid rising foreign investment into the country.
New employment pass salary thresholds
In an official announcement by the Ministry of Home Affairs, the minimum salary requirement for Employment Pass Category I, which covers top level management positions, will increase to RM20,000 per month from the previous RM10,000.
For Category II mid level positions, the minimum threshold will rise from RM5,000 to RM10,000 per month.
Meanwhile, Category III lower level positions will see an increase from RM3,000 to RM5,000 per month.
Prioritising Malaysian talent
Malaysia Investment Development Authority chief executive officer Sikh Shamsul Ibrahim said the move is aimed at raising the wage floor to prevent downward pressure on local salaries caused by the hiring of lower cost foreign labour in high growth sectors.
The policy clearly prioritises local talent, especially for non technical roles that can be filled by Malaysians. MIDA also stressed that expatriate job applications will now require stricter justification to ensure localisation plans are implemented.
While acknowledging that some employers may be unhappy with the changes, the government maintains that reliance on expatriates for roles that locals are capable of performing should be reduced to safeguard the sustainability of the national job ecosystem.
‘A double edged sword’
Economists have described the move as a double edged sword.
On one hand, aligning Malaysia’s salary thresholds with benchmarks in Singapore and Hong Kong could encourage skill transfer and accelerate localisation of senior level talent.
It also reflects Malaysia’s ambition to transition from a low cost economy into a high value talent hub.
On the other hand, concerns remain over whether Malaysia’s current ecosystem is mature enough to attract global talent at salary levels above RM20,000.
Without supporting measures such as strong talent development pipelines and exemptions for specific sectors, the policy could influence investment decisions by multinational companies, particularly in research and development and digital transformation fields.
Ensuring investment benefits reach local workers
Overall, the policy shift signals Malaysia’s intent to tighten controls on expatriate hiring to ensure that economic gains from multinational investments are truly felt by the local workforce through higher national wage benchmarks.
As of November last year, new employment passes issued had reached 166,980. The stricter controls are seen as necessary to ensure Malaysia’s workforce benefits meaningfully from the country’s growing
