Employing an Expatriate in Malaysia
On paper, employing an expatriate seems a straightforward and easy task, especially after browsing some of the related government websites. Established multinational companies (MNC) and locally owned companies (LOC) that have been employing expatriates for some time will know the required procedures and are well aware of the many possible pitfalls. However, those who are new to this scene will possibly face many obstacles as they are unaware of some of the basic prerequisites which are needed to be fulfilled before an expatriate can be employed. Many of you may also fall prey to the many unscrupulous agents/consultants that promise everything but are often unable to deliver or deliver at exorbitant rates.
Basic Prerequisites to Employ an Expatriate
Before an entity is allowed to submit an application for its expatriates’ Employment Pass (EP), there are some basic prerequisites it must adhere to:
- Having a locally established entity either registered with the Companies Commission of Malaysia (CCM) or Registrar of Societies (ROS).
- Companies registered with the CCM are required to have a minimum paid up capital amount:
- RM 250,000 – 100% locally owned
- RM 350,000 – Joint venture (minimum foreign equity is 30%)
- RM 500,000 – 100% foreign owned
- RM 1,000,000 – Foreign owned companies with a 51% and above foreign equity that fall under the purview of the Ministry of Domestic Trade, Co-operatives and consumerism
Minimum Wage Requirement
The minimum salary requirements for expatriates will also differ according to the business sector its employer is in, although the basic benchmark salary for most expatriates is set at MYR5,000 per month. In certain selected sectors, the expatriate is allowed to rake in a basic salary of below MYR5,000. These lucky businesses comprise of companies operating in the National Key Economic Areas (NKEA). Companies granted the Multimedia Super Corridor (MSC) status are automatically allowed to employ expatriates with a minimum salary below the basic benchmark.
Need for Supporting Letters
Furthermore, specific business sectors such as construction, education, and healthcare requires the need of a supporting letter from its regulatory body prior to the EP application.
Where To Apply
You may be shocked to find out that there are 10 different agencies that have been given the authority to provide post approval of expatriates. The most well known agency would be the Expatriate Services Division (ESD). The ESD processes the majority of expatriate pass applications in Malaysia. Its best to make sure which agency your entity is required to approach to avoid delays.
Conclusion
Thus, even before you think of employing an expatriate you should know all these basic requirements and ensure you fulfill them. Employers should plan well ahead of the start date of employment to ensure that all the necessary documents are prepared and procedures/prerequisites are taken care off. It will also help to ensure there is no stress in meeting set deadlines. To make thing easier and be able to focus on your business you may want to engage the services of a reputable company to assist you with the application process and ensure a smooth and efficient journey.
