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Economy|Business and EconomyMalaysia moves to tighten rules for expats, raising fears of talent flightMalaysia’s government plans to slash the number of foreign workers to encourage local hiring and raise incomes.

Kuala Lumpur, Malaysia – Recent policy changes in Malaysia are impacting foreign workers in the country. The Malaysian government has announced adjustments to the employment visa regulations, effective from June onwards.

WBy William HayesMar 26, 20261 min read

Kuala Lumpur, Malaysia – Recent policy changes in Malaysia are impacting foreign workers in the country. The Malaysian government has announced adjustments to the employment visa regulations, effective from June onwards.

The new regulations will see an increase in the minimum salary threshold for foreign workers seeking visas, potentially up to double the previous rates. Additionally, the duration of foreign workers’ stay will be limited to five or ten years.

Malaysia has long been a destination for foreign labor, with approximately 2.1 million documented foreign workers, many of whom are engaged in manual labor. A smaller number are employed in specialized sectors such as finance, semiconductors, and oil and gas. The highly-salaried expatriate population contributes significantly to the domestic economy, injecting about 75 billion ringgit ($19bn) annually.

According to the 13th Malaysia Plan, the government aims to reduce reliance on low-skilled foreign workers and address wage distortions while promoting local employment. The goal is to decrease the foreign workforce from 14.1 percent in 2024 to 5 percent by 2035.

Kuala Lumpur, Malaysia – Recent policy changes in Malaysia are impacting foreign workers in the country.
William Hayes · Thehackingpost

The Ministry of Home Affairs has outlined new salary requirements for work permits:

From 10,000 to 20,000 ringgit ($2,500 to $5,000) From 5,000 to 10,000 ringgit ($1,260 to $2,520) From 3,000 to 5,000 ringgit ($760 to $1,260)

Employers will also be required to implement plans for recruiting local talent as expatriates' stays are limited.

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The policy changes are expected to increase operational costs for businesses, particularly those relying on mid-tier expatriate labor. Firms may need to adjust recruitment strategies and enhance local talent development to align with the new regulations.

While the new policies aim to strengthen the local workforce, their success will depend on effective implementation and the development of local capabilities. The adjustments in salary thresholds and visa durations are significant and may influence the attractiveness of Malaysia as a destination for expatriates.

Based on reporting by Al Jazeera.

AI transparency. This article was produced with the assistance of artificial intelligence and published under human editorial oversight. AI systems can make mistakes. Read how we use AI (EU AI Act, Art. 50).
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