New Expatriate Employment Policy Takes Strict Effect: Navigating the Malaysia Expatriate Pass Salary Policy 2026

The Ministry of Home Affairs (MOHA) has officially initiated a massive overhaul of the country's foreign workforce regulations. Set to take full effect on June 1, 2026, the revised Malaysia Expatriate Pass Salary Policy 2026 introduces stringent new minimum salary thresholds across all Employment Pass (EP) categories, mandatory succession planning, and strict maximum employment durations. Aligned with the broader objectives of the Thirteenth Malaysia Plan (RMK-13), these comprehensive measures aim to reduce long-term reliance on foreign labour while accelerating the transfer of critical industry knowledge to the local workforce.

Massive Hikes in Employment Pass Minimum Salaries

The most immediate impact for employers nationwide is the substantial increase in the baseline cost of hiring foreign talent. Companies submitting new or renewal applications on or after June 1 will face a completely restructured salary framework.

Category Updates Across All Sectors

According to the Expatriate Services Division, the baseline remuneration requirements have essentially doubled across most tiers to ensure that foreign hires genuinely represent high-value talent:

• Category I: Minimum salary increased from RM10,000 to RM20,000 and above.
• Category II: Minimum salary increased from RM5,000 to between RM10,000 and RM19,999.
• Category III: Minimum salary increased from RM3,000 to between RM5,000 and RM9,999. Notably, expatriates entering the manufacturing and manufacturing-related services sectors under Category III will face a higher minimum of RM7,000.

Employers who need further clarification on application submissions can direct their inquiries to the MYXpats Centre.

Mandatory Succession Plans and Employment Caps

To prevent indefinite reliance on foreign workers for specific roles, the government has introduced strict tenure limits tied to the employing company. Category I and Category II pass holders are now capped at a maximum of 10 years, while Category III passes are capped at 5 years.

Furthermore, employers hiring under Category II and Category III must now submit a formalised succession plan. This legally binding requirement mandates companies to identify specific roles to be localised, establish structured training programmes, and set clear timelines for knowledge transfer to local employees.

The 1:3 Internship Quota Implementation

Complementing the succession requirements is the official rollout of the 1:3 Internship Policy, transitioning from its pilot phase into full enforcement on June 1, 2026. This policy links expatriate hiring directly to the local talent ecosystem, requiring businesses to engage academic institutions and provide placements for local interns, ensuring a steady pipeline of future-ready talent.

Expanded Dependant Privileges

Despite the tighter regulations and higher financial thresholds, the revised policy offers a significant lifestyle concession for lower-tier expatriates. Under the new framework, Category III EP holders are now legally permitted to bring dependants—including spouses, children under 21, and parents—to Malaysia. This reverses the previous policy which restricted dependant privileges exclusively to Category I and II pass holders.

Key Facts

• The revised Expatriate Pass Salary Policy officially takes effect on June 1, 2026, applying to all new and renewal applications.
• The minimum monthly salary for Category I Employment Passes has doubled to RM20,000.
• Employment durations are now strictly capped at 10 years for Categories I and II, and 5 years for Category III.
• Employers must submit documented succession plans outlining knowledge transfer timelines for local employees when hiring Category II and III expatriates.
• Category III pass holders are now eligible to sponsor dependant passes for their immediate family members.

What People Are Asking

• When does the Malaysia Expatriate Pass Salary Policy 2026 take effect?
• The new policy applies to all new and renewal Employment Pass applications submitted to the Expatriate Services Division on or after June 1, 2026.
• What is the new minimum salary for a Category II Employment Pass?
• The revised minimum salary for Category II falls between RM10,000 and RM19,999 per month, a sharp increase from the previous RM5,000 baseline.
• Do existing expatriates need to reapply immediately?
• No, current Employment Passes remain valid until their expiration date. However, any renewal applications processed after the June 1 deadline will be assessed under the newly established salary and succession requirements.