Malaysia’s government has announced stricter rules for foreign workers, prompting concerns about long-term plans for expats and the potential flight of skilled talent.
The move includes higher salary requirements and limits on employment duration.
From June onwards, Malaysia will implement significant changes to its foreign worker policies. Minimum salaries required for visa eligibility will rise sharply, with thresholds doubling in some categories. Additionally, work permits will be limited to five or ten years, depending on the employment category.
Sanjeet, an Indian business consultant living in Malaysia for over a decade, told Al Jazeera, “It does leave room for doubt in terms of long-term plans, which include things like buying a house or car here.” Many expatriates share his uncertainty as the government seeks to reduce reliance on foreign labor.
Economic background
Malaysia has long attracted foreign workers, from low-skilled laborers earning the minimum wage of 1,700 ringgit ($430) to highly-paid professionals in finance, oil, and tech sectors. In 2024, approximately 140,000 high-earning expatriates contributed 75 billion ringgit ($19bn) to the economy and paid about 100 million ringgit ($25m) in taxes.
The 13th Malaysia Plan (2025) highlighted that continued dependence on low-skilled foreign labor slowed productivity growth and hindered technological adoption. As a result, authorities aim to reduce the foreign workforce from 14.1 percent in 2024 to 5 percent by 2035, boosting local hiring and wages in a country where the average monthly salary is $700.
Impact on expats and businesses
Under the new rules, the minimum monthly salary for employment pass categories will rise as follows:
- From 10,000 to 20,000 ringgit ($2,500–$5,000)
- From 5,000 to 10,000 ringgit ($1,260–$2,520)
- From 3,000 to 5,000 ringgit ($760–$1,260)
UK expatriate Thomas Mead, a wealth manager, said, “However, the jump from RM10,000 to RM20,000 was quite a shock.” Many expatriates, like Leonardo from Indonesia, face downgrades in employment pass categories, affecting long-term plans such as family relocation.
Gan, a business consultant, noted that higher salary requirements could discourage recruitment of skilled professionals from second-tier countries like China. “If salaries increase to 10,000 ringgit, companies definitely won’t bring them here,” he said.
