The Ministry of Home Affairs (MOHA) will implement a new expatriate employment policy from June 1, 2026, raising minimum salary requirements and limiting the length of time expatriates can work in Malaysia, in a move to prioritise local talent.
MOHA said the policy, approved by the Cabinet on Oct 17, 2025, aims to ensure economic growth remains sustainable and inclusive while keeping Malaysia competitive as a business-friendly investment destination.
“The government remains committed to prioritising qualified local talent, while ensuring Malaysia continues to attract quality investments,” the ministry said in a statement.
Under the new rules, the minimum salary for Employment Pass (EP) Category I will be increased to RM20,000 and above, from RM10,000 previously.
For EP Category II, the salary range will be raised to between RM10,000 and RM19,999, while EP Category III will see its minimum salary increased to RM5,000–RM9,999, with a higher threshold of RM7,000–RM9,999 for the manufacturing sector and manufacturing-related services.
MOHA said the policy also introduces clear limits on expatriate employment periods, which were previously undefined.
“The setting of employment durations will help employers plan more structured succession plans with greater involvement of local workers,” it said.
Under the policy, EP Category I and II holders will be capped at 10 years of employment, with EP Category II requiring a succession plan, while EP Category III holders will be limited to five years with a succession plan.
All expatriates under EP Categories I, II and III will continue to be allowed to bring dependants.
MOHA said it will hold engagement sessions with industry players, employers and relevant agencies to explain the implementation process and ensure a smooth transition that does not disrupt business operations.
