The changes, effective on June 1, will raise the minimum salary threshold for the Category I Employment Pass, meant for high-level managerial roles, from RM10,000 (US$2,465) to RM20,000 per month, according to Malay Mail.
For mid-level Category II passes, the monthly salary range will increase from RM5,000-9,999 to RM10,000-19,999.
The range for low-level Category III passes will rise from RM3,000-4,999 to RM5,000-9,999 per month, with a higher minimum of RM7,000 applied to expats in manufacturing sector and manufacturing-related services.
Category I and II passes will have a maximum employment duration of 10 years while Category III will be capped at five years.
Category II and III passes will also require a succession plan involving local workers, meaning Malaysian staff must be trained to eventually take over the role.
All expats holding these passes are allowed to bring dependents.
Expat visas currently have no formal limits on employment durations and their salary thresholds have not been raised since September 2017.
“This (adjustment to expat visas) is meant to reduce dependence on foreign labor and to prioritize local talent to fill job vacancies,” Malaysia’s Ministry of Home Affairs said in a statement last Wednesday, as quoted by The Star.
The duration cap is meant to “recognize expatriates with high-level expertise and serve as a guide for employers in planning more structured succession plans involving the local workforce,” it added.
With these revisions, many companies might need to either hike expat salaries or speed up the localization of key jobs. The mandatory succession plans for Category II and III passes also mean they will have to gradually pass on skills and responsibilities to qualified local staff, according to newswire SAYS.
The shift comes as Malaysia’s manufacturing, finance, information technology and customer support centers have been drawing foreign investment, driven by their cost competitiveness relative to those in neighboring Singapore and by a shift in global supply chain, Nikkei Asia reported.
Along with this, expat employment has been rising in the country of 34 million people, especially after the COVID-19 pandemic.
Malaysia issued 166,980 new Employment Passes in the first 11 months of last year, exceeding 2024’s total of 160,380, according to its Immigration Department.
As of last October, the country had about 2.13 million foreign workers holding active visas, including low-skilled work permit holders.
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