The Ministry of Home Affairs of Malaysia announced the New Expatriate Employment Policy, which will take effect on June 1, 2026.
This policy introduces major changes to minimum salary requirements and sets specific limits on employment duration.
New requirements (Effective June 1, 2026)
EP I
Min. Monthly Salary: RM 20,000 and above
Employment Duration: 10 Years
EP II
Min. Monthly Salary: RM 10,000 – RM 19,999
Employment Duration: 10 Years (Succession plan for local talent required)
EP III
Min. Monthly Salary: RM 5,000 – RM 9,999
Note: For the Manufacturing and Manufacturing Related Services (MRS) sectors, the minimum is set at RM 7,000.
Employment Duration: 5 Years (Succession plan for local talent required)
Key Highlights
Mandatory Succession Plan: For Categories II and III, employers must now provide a specific plan to transition roles to local talent. This serves as a guideline for businesses to plan their human capital systematically.
- Mandatory Succession Plan: For Categories II and III, employers must now provide a specific plan to transition roles to local talent. This serves as a guideline for businesses to plan their human capital systematically.
- Introduction of Employment Limits: Previously, there were no specific limits on employment duration. Under the new policy, the durations listed above will serve as the maximum period an expatriate can stay in that category.
- Dependents: Expatriates in all categories (I, II, and III) are now permitted to bring their dependents.
- Grace Period for Implementation: The policy takes effect on June 1, 2026. All new and renewal EP applications submitted on or after this date must comply with the revised standards.
Strategic Considerations for Businesses
This revision involves a substantial increase in salary thresholds—doubling in some cases—which will significantly impact corporate cost structures and personnel strategies.
Furthermore, the development of a “Succession Plan” for EP II and III holders will be a critical factor for successful visa applications and renewals in the future.
We recommend that companies begin reviewing their long-term personnel and localization plans to ensure a smooth transition to these new requirements.