The Ministry of Home Affairs has announced revisions to Malaysia’s Expatriate Employment Policy, introducing higher minimum salary thresholds and replacement planningrequirements for certain Employment Pass (“EP”) categories.
The revised policy applies to all new and renewal EP applications submitted on or after 1 June 2026.
What’s changing?
EP Category
Minimum monthly salary
Employment contract tenure
Dependent pass
Current
Revised
Current
Revised
Current
Revised
I
RM10,000 and above
RM20,000 and above
Up to 5 years (renewable)
Up to 10 years
Allowed
Allowed
II
RM5,000 to RM9,999
RM10,000 to RM19,999
Up to 2 years (renewable)
Up to 10 years with replacement plan
Allowed
Allowed
III
RM3,000 to RM4,999
RM5,000 to RM9,999
Up to 1 year (maximum 2 times renewal)
Up to 5 years with replacement plan
Disallowed
Allowed
Employers engaging expatriates are now required to implement a replacement plan under EP categories II and III aimed at preparing local employees to take over expatriate roles within the approved employment period.
The plan is expected to include:
Identification of roles and functions to be transferred to local employees.
Training, mentoring, and knowledge transfer from expatriates to local employees.
A reasonable timeframe to ensure local employees are ready in terms of skills and competencies.
Operational continuity planning to ensure that the transition does not affect productivity or organisational performance.
