Malaysia will double the minimum salary requirements for expatriate employment visas in June, marking the first major overhaul of the scheme in nearly a decade as the government seeks to safeguard job opportunities and wages for local workers amid a surge in foreign investment. The changes apply across all sectors and significantly raise the bar for companies seeking to hire foreign professionals.
Under the revised rules, published earlier this week and formally announced by the Ministry of Home Affairs on Wednesday, the salary threshold for Employment Pass category I, covering senior and managerial positions, will increase to 20,000 ringgit ($4,932) per month, up from the current level. For category II, which applies to mid-level roles, the minimum salary will double from 5,000 ringgit to 10,000 ringgit. Category III, for lower-level positions, will see its threshold rise from 3,000 ringgit to 5,000 ringgit per month. The salary benchmarks were last adjusted in September 2017.
Officials said the revision was driven by concerns that relatively low expatriate salaries were exerting downward pressure on local wages. Sikh Shamsul Ibrahim, chief executive of the Malaysian Investment Development Authority, said the government was acting to “push up the floor” after years without a review. He told reporters that allowing expatriates to be hired at salaries considered low by current standards risked depressing pay levels for Malaysians, particularly in fast-growing industries.
Sikh stressed that the policy was not intended to shut out foreign professionals but to ensure that companies prioritize local hiring wherever possible. He acknowledged that employers would be unhappy with the higher thresholds but said the government was increasingly scrutinizing whether roles filled by expatriates could instead be localized. For non-technical positions, he said, approvals for expatriate hires were no longer being granted, as local talent was deemed sufficient.
Malaysia, a country of about 34 million people, has long been open to foreign workers and professionals across a wide range of sectors. As of October, there were 2.13 million foreign workers holding active visas, including a large number of low-skilled work permit holders. In recent years, the country has attracted growing multinational investment in manufacturing, finance, information technology and customer support centers, positioning itself as a cost-competitive alternative to Singapore amid global supply chain realignments.
Expatriate employment has expanded alongside this influx of global businesses, particularly after the COVID-19 pandemic. Immigration Department data show that from January to November last year, 166,980 new Employment Passes were issued, exceeding the total for the whole of 2024. The sharp rise has intensified debate over the balance between attracting foreign expertise and protecting opportunities for local workers.
Economists say the new thresholds bring Malaysia closer to regional peers. Anthony Dass told Nikkei Asia that the revised salary levels align more closely with benchmarks in Singapore and Hong Kong. However, he questioned whether Malaysia currently has a sufficiently mature ecosystem to attract a large pool of professionals earning 20,000 ringgit or more per month, warning that the policy could influence multinationals’ investment decisions, particularly in areas such as research and development, strategy and digital transformation.
Dass said the higher requirements could encourage skills transfer, accelerate the localization of mid- to senior-level talent and lift wage benchmarks over time. Without complementary measures, such as stronger talent development pipelines or targeted exemptions for key sectors, he cautioned that the policy could also risk slowing the very structural upgrading Malaysia is aiming to achieve.
