Employment Pass

The Employment Pass (EP) is a work permit that allows an expatriate to work for a company in Malaysia. The pass is subject to the terms of the work contract (up to 60 months). It is the responsibility of the employing organisation to submit the application before the employee travel to Malaysia.

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Types of Employment Pass

Category 1

key post positions in a company, such as executives, CEOs, technical or managing directors, project managers etc.

a monthly salary of at least RM10,000.
a work contract of up to five years.
EP can be renewed.
allowed to hire a Foreign Domestic Helper.

Category 2

managerial and professional positions in a company, such as a marketing or investment manager, lecturers, directors, architects, etc.

have a salary between RM5,000 and RM9,999.
a work contract of up to two years.
EP can be renewed.
allowed to hire a Foreign Domestic Helper.

Category 3

non-executive positions in a company that require significant work experience and specific technical or practical skills. For example, designers (fashion, manufacturing, furniture), craftsmen, food technologists, etc.

earn a monthly salary between RM3,000 and RM4,999.
a work contract of up to two years.
EP cannot be renewed more than two times.
not allowed to hire a Foreign Domestic Helper.

Eligibility Criteria for Employment Pass Applications for Expatriate(s) / Knowledge / Skilled Worker(s)

The minimum requirements to apply for an expatriate post are as follows:

Degree and above, with at least 3 years’ experience in the relevant field;
Diploma, with at least 5 years’ experience in the relevant field;
Technical Certificate or equivalent, with at least 7 years’ experience in the relevant field;
Applicant must work in a managerial, executive or technical position which requires specific skills;
Applicant must meet the required salary requirements; and
Applicant must not take up work in a sector which is considered restricted by the Government of Malaysia.

If the expatriate is only to act as a shareholder, these are the requirements:

Shareholder(s) must have a minimum of 30% equity in the company; and
Must be a SSM-registered Director of the company and/or holds a key position in the company.

Authority Approval and Licensing Requirement

Depending on the Applicant’s profession, the Applicant’s employer has to apply for the Expatriate Post at one of the following government-approved agencies:

- Malaysian Investment Development Authority (MIDA) for the sectors of manufacturing and services.
- Malaysia Digital Economy Corporation (MDEC) for the technology sector.
- Central Bank of Malaysia (BNM) for the sectors of finance, insurance, and banking.
- Bioeconomy Corporation for the sector of biotechnology and bio-based industry.
- Securities Commission (SC) for the sector of securities and futures market.
- Expatriate Committee (EC) (operating under the Immigration Department of Malaysia) for sectors other than those mentioned above.

Once the Expatriate Committee or another authorized agency has approved the employer’s application, the employer can proceed to apply the Employment Pass.

How long does the application takes?

The full registration usually completes within 1 - 3 days upon complete information submitted to Companies Comission of Malaysia ("CCM").
I am a foreigner. Can I incorporate a Sdn Bhd in Malaysia?

Yes, you certainly can. Every Company, however, must have at least one director who resides in Malaysia. That individual may be you or someone who lives in Malaysia. If you are the company's only director and are not a Malaysian citizen, we may ask for your Malaysia residential information. Contact us and we will provide you with a one-time free consultation.
What are the responsibilities of a director?

As per Section 213 of the Companies Act 2016, directors must always exercise their powers for a legitimate purpose and in good faith in the best interests of the business, and exercise reasonable care, skill, and diligence. Despite the fact that the Companies Act 2016 gives directors broad management powers, there are laws in place to protect the company's interests from the directors' wrongdoings.
What is the tax rate of a company?

The standard corporate tax rate on the chargeable income is 24%. The corporate tax rate for small and medium-sized businesses (i.e. those with paid-up capital of less than RM2.5 million and annual sales of less than RM50 million) is 17% on the first RM600,000, and 24% on the rest.
Do I need to register a Company with Companies Commission of Malaysia (CCM)?

The Representative Office/Regional Office is not required to be incorporated under the Companies Act 2016. The setting up of a Representative/Regional Office requires the approval by the Government of Malaysia.
What are the Permissible Activities for Representative Office / Regional Office?

- Gathering and analysis of important information or undertaking feasibility studies on investment and business opportunities in Malaysia and the region; - Planning or coordination of business activities; - Identifying sources of raw materials, components or other industrial products; - Undertake research & product development; - Act as a coordination centre for the corporation's affiliates, subsidiaries and agents in the region; and - Other activities which will not result directly in actual commercial transactions.
What are the Non-Permissible Activities for Representative Office / Regional Office?

- Engaged in any trading (including import and export), business or any form of commercial activity; - Lease warehousing facilities; any shipment / transshipment or storage of goods shall be handled by a local agent or distributor; - Sign business contracts on behalf of the foreign corporation or provide services for a fee; - Participate in the daily management of any of its subsidiaries, affiliates or branches in Malaysia.
What is the Procedure for Application?

An application (excluding banking, financial and tourism services) should be submitted in three (3) copies to Malaysian Industrial Development Authority (Manufacturing Services Division) ["MIDA"] The following documents should be submitted together with the application: (i) Certified true copy of passport containing particulars of the expatriate; (ii) Curriculum Vitae of the expatriate to be employed; and (iii) Certified Academic Qualification of the expatriate.
Is Representative Office / Regional Office eligible to apply for expatriate post?

A Representative Office / Regional Office is eligible to apply for expatriate post. The expatriates will only be considered for managerial and technical posts and the number of posts allowed depending on the functions and activities of the Representative Office / Regional Office. The proposed expatriate must be currently employed by the applicant company or its subsidiary or within the group. An expatriate working with the Representative Office / Regional Office is taxed based on the portion of their chargeable income attributed to the number of days that they are in the country. Employment pass for the approved expatriate is valid for one (1) year and requires renewal on annual basis.

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