The Small and Medium Enterprises Association has expressed its disappointment with the Ministry of Home Affairs’ over the new Employment Pass (EP) policy, which effectively doubles salary thresholds across all categories overnight.
For example the new policy mandates a minimum salary of RM 10,000 and RM 20,000 respectively for EP Category I and II (from RM 5,000 and RM 10,000 previously). The association said this will effectively push costs higher for the SME business owner and impact their digitalization endeavors.
The association added that for a typical SME, building these transformations requires technical enablers, such as software and application developers, data engineers, robotics technicians, and cybersecurity specialists. These are all explicitly listed on TalentCorp’s Critical Occupations List (COL), meaning they are highly specialised positions with limited domestic availability.
Also pointing out the local talents who are available are almost entirely snapped up by multinationals (MNCs) and large local corporate entities, completely pricing out our SMEs. What this means in reality is that an SME must either hire mid-tier foreign talent, resort to expensive external consultants and vendors, or give up entirely and remain stuck in the low-value-add segments that we currently operate in.
The new policy made matters worse where a cap of a maximum of 10 years tenure for Category I and II passes, and 5 years for Category III passes. Previously, companies could retain foreign talents indefinitely, it added.
The association said that the new policy not only abruptly closes the door on these highly skilled professionals, but it also smacks of xenophobia and flies directly in the face of the global war for talent. Foreign investors and regional headquarters will simply relocate to more welcoming neighbouring economies. Why are we spending billions of ringgit in public funds trying to attract these investors and regional HQs to Malaysia, only to actively sabotage those efforts with this ill-thought-out policy?
approvals annually that highly-skilled talents could aspire to. These will not change our voting demographics but will help in drawing high-income, high-skilled talents to continue contributing to our economy.
