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Advantages of Employment Pass in Malaysia

Advantages of Malaysia Employment Pass

Malaysia has become a popular destination for people to migrate and reside due to its tropical climate, natural treasures, robust economy and low cost of living. While this diverse country offers plenty of opportunities to broaden your cultural horizons, it also offers a good deal of employment opportunities for foreigners who wish to work and live here.

The employment prospects are relatively good for highly-skilled foreign workers, given the job openings available in various industries. Although the competition for jobs are high and securing a job is seen as a challenge here, it is possible if you are highly-educated with years of experience in sought-after fields.

 

Jobs Opportunities in Malaysia

As the economy in Malaysia is growing at a steady pace, it has transformed itself over the years from a primary producer of raw materials to a vast, multi-industry and innovation-based economy.

Even so, there are restrictions in place concerning the number of foreign workers that the Malaysian companies can employ. These companies can only hire foreign employees if there are no qualified Malaysians to fill the position.

The country’s labour force is mostly based in the tertiary sector, which is also known as the services sector and is followed by the lucrative oil, gas and biotechnology sectors. Some of the key industries in Malaysia include:

  • Petroleum and natural gas
  • Electronics and semi-conductors
  • Medical technology
  • Light manufacturing
  • Pharmaceuticals
  • Palm oil
  • Timber
  • Rubber

Along with that, Malaysia also has a Critical Occupation List which highlights jobs across 10 sectors that are highly-sought after. These sectors include:

  • Information and communications technology
  • Multimedia and telecommunications
  • Electrics and electronics
  • Oil, gas and energy
  • Professional services
  • Petrochemicals
  • Medical devices
  • Financial services
  • Aerospace
  • Education

When you have secured a job, the next thing you will need to do is obtain a valid work pass. This work pass will be your ticket to work and live in the country for a stipulated time.

 

Foreign Work Pass in Malaysia

As of 1 September 2017, all work passes are under the purview of Ministry of Home Affairs and the Immigration Department of Malaysia. Malaysia has various types of working passes to choose from. The type of work pass you choose would depend on your job type and skills involved.

Broadly, there are 3 work passes issued by the Immigration Department of Malaysia for the purpose of employment, namely:

  • Employment Pass – For individuals who possess specific skill set in a technical or managerial position. Minimum validity period for this pass is 2 years. This Employment Pass comes in 3 categories, Category I, II and III.

 

  • Temporary Employment Pass – For individuals with monthly drawn salary of less than RM5,000 and is applicable for employees with an employment period of less than 2 years.

 

  • Professional Visit Pass – For skilled foreign worker who intend to provide service to a company in Malaysia on behalf of a foreign company and is usually for short-term attachment. This pass is issued for minimum of 6 months and must not exceed 12 months.

 

All these work passes are not considered as long-term pass and they will require renewal before the end of the validity period. As a foreign employee, you must secure job offer from a Malaysian-based company. The employment opportunity should meet the system’s minimum salary requirement.

 

Employment Pass Requirements

The Employment Pass (EP) is issued for an employment period up to 3 years and is renewable up to 10 years, subject to approval of the Immigration Department. An employment pass holder is considered a tax resident in Malaysia under the statutory requirement. There are several requirements for a foreign individual in order to be eligible to hold the pass:

  • Salary qualification
  • Minimum of a bachelor’s degree and above
  • Possess several years of working experience (in the same industry or position applied)
  • Possess the right expertise or skillset that cannot be filled by a Malaysian candidate

 

Not all foreigners may be qualified to work in Malaysia, and employers should be aware that only certain positions are available for them, which are usually highly-skilled managerial or technical positions that cannot be filled by the locals. The positions include:

  1. For key posts: Top managerial post for foreign companies operating in Malaysia
  2. For executive posts: Professional or mid-managerial positions
  3. For non-executive posts: Highly-skilled, technical positions that require relevant experiences.

 

The Employment Pass is divided into 3 categories:

  1. Category I (EPI) – for applicants who earn a fixed monthly salary of at least RM10,000 and a valid employment contract for a minimum of 5 years.
  2. Category II (EPII) – for applicants who earn a fixed monthly salary of at least RM5,000 up to RM9,999 and a valid employment contract of 2 years.
  3. Category III (EPIII) – for applicants who earn a fixed monthly salary of between RM3,000 to 4,999 and a valid employment contract period not exceeding 12 months.

 

Employment Pass Application Process

Submission of the Employment Pass application should be completed by the employer of the Malaysian company on behalf of the expatriate.  Prior to applying for an employment pass, foreigners should secure a job first in the country and receive the job offer letter from the sponsoring company. If you are an applicant, make sure to hold a valid passport for at least 18 months.

The application can be submitted via the Expatriate Services Division (ESD) online system. As a part of the pass application process, a reference number will be issued so that applicants may track the progress of the application on the Immigration Department of Malaysia’s official portal.

There is no specific timeline stated by the authority, as each application is processed individually. The average timeline is around 3-4 weeks and for some cases, there might be delays. These delays can be caused by the employer for not submitting the application correctly to the immigration department, or not complying with the requirements.

Confirmation for a successful application may also take more than a month as the employer will need to revisit their paper works, or the approving authority may require more information and legally endorsed qualifications.

 

Advantages of Employment Pass

In the long run, the employment pass holder may find that the pass offers great advantages along with the ability to work and live in Malaysia. Some of the advantages are outlined below:

Employment Pass Category I 

  • Allows the holder to work in Malaysia with the hiring company
  • Pass holder can hire foreign maids
  • Legal spouses and children under 18 years old are eligible for Dependant Pass
  • Unmarried children above 18 years old are eligible for the Long-Term Social Visit Pass
  • Parents and in-laws are eligible for the Long-Term Social Visit Pass
  • Renewals are considered depending on requirements

 

Employment Pass Category II

  • Allows the holder to work in Malaysia with the hiring company
  • Pass holder can hire foreign maids
  • Legal spouses and children under 18 years old are eligible for Dependant Pass
  • Unmarried children above 18 years old are eligible for the Long-Term Social Visit Pass
  • Parents and in-laws are eligible for the Long-Term Social Visit Pass
  • Renewals are considered depending on requirements

 

Employment Pass Category III

  • Allows the holder to work in Malaysia with the hiring company
  • Pass holder is not eligible to hire foreign maids
  • Pass holder is not eligible to bring in dependants
  • Pass will be subjected to review, and upon renewal, it may be renewed for a maximum of 2 years.

Being a developed country, Malaysia is equipped with excellent health care facilities and there are many international schools to choose from if you are settling here with children. Other advantages of owning the employment pass include:

  • Employee Provident Fund (EPF) contribution

The Employee Provident Fund is a social security institution under the Ministry of Finance Malaysia which manages a mandatory retirement and savings planning scheme for all legally employed workers in Malaysia. It is regarded as one of the vital components in the country’s multi-pillar pension framework.

This scheme works in a way where a small portion of your monthly wages is put aside for pension or retirement purpose. It is compulsory for employed Malaysian citizens to contribute, and for a foreign employee, as you are legally employed with a valid employment pass, you may choose to contribute.

EPF is a great retirement-planning device as it has a guaranteed minimum dividend rate and historically generates higher returns compared to fixed deposits and saving accounts in Malaysia.

Other added benefit of the EPF contribution is that it qualifies for tax deduction by way of personal relief. Dividends generated from EPF are also exempted from tax. When you opt to contribute to EPF as foreigner, you are obligated to contribute 11 percent of your monthly remuneration to your EPF account.

Ultimately, this scheme serves as a means to build your retirement nest egg if you are planning to reside in the country for long-term.

 

  • Entitledfor SOCSO coverage scheme

The Social Security Organization (SOCSO) is a Malaysian government agency that was established to provide social security protections to Malaysian employees with accordance to the Employees’ Social Security Act, 1969.

At current, employers who hire foreign workers with valid work pass must register their employees with SOCSO and contribute to the Employment Injury Scheme.

Employers are required to contribute a small percent of the insured’s monthly wages towards this scheme, which provide protection to an employee against any accident or occupational disease arising in the course of his or her employment as well as commuting accidents.

 

  • Eligible to apply for Residence Pass-Talent 

The Residence Pass-Talent is a 10-year renewable pass for highly qualified foreign employees to continue to work and live in Malaysia. One of the main advantages of this pass is that it is tied to the individual instead of the company hiring the foreign employee. With this benefit, foreign employees will have the flexibility to change employers multiple times during the validity of the pass without having the need to renew it.

To acquire this pass, applicants will need to hold a valid Employment Pass, and a total work experience of 5 years, with 3 years of Malaysian working experience. This means the employment pass is your only gateway to attain this Residence Pass-Talent.

Besides that, your spouse will also be permitted to seek for employment and your family members of over 18 years old, such as parents and parents-in-law are entitled for a 5-year social visit pass.

With this pass, the government aims to attract and retain top talents in the country and subsequently help to produce better growths in the economy, thus resulting in a win-win situation for both parties.

 

  • Doorway toPermanent Residency 

Foreign nationals with a valid employment pass and lived in Malaysia continuously for 5 years, may apply for a permanent resident status. Gaining this status is ultimately filing as residents can stay and remain in the country indefinitely, seek employment freely, acquire properties, own a business and enter and exit the country similar to Malaysian citizens.

  • Other advantages 

As soon as your Employment Pass is endorsed, you may open a bank account. You may also apply for Credit Cards from any banks in Malaysia and the criteria is similar, which is depending on your monthly income and credit history. If you have a driving license from your residence country, you can convert it to a full Malaysian driving license.

Not only limited to these benefits, you are also entitled to other fringe benefits during your terms of employment here such as health and other insurances.

 

Summary

Besides being a popular tourist attraction, Malaysia is on track to become a highly developed country, with a flourishing economy and stable labour market. Consequently, this has improved the employment prospects for expatriates. From general workers to highly skilled professionals, one can find a suitable job and earn a better living here. The only requirement to do so is to obtain a valid work pass, and with all the benefits that comes by acquiring an employment pass, one can certainly contribute to the needs of government for increased productivity and efficiency in the labour workforce radar.

Posted on March 28, 2019 at 5:18 pm
Categories: Malaysia Working Visa

1 comment

[…] you are an expatriate or foreigner living in Malaysia with a valid employment pass, buying properties here is possible. The differences between a local and foreign buyer lie in the […]

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