Hiring Foreign Workers in Malaysia
Foreign Worker
Hiring Foreign Workers in Malaysia: A Comprehensive Guide
Malaysia, like many other countries, relies on foreign workers to fill labor shortages in various sectors. However, hiring foreign workers in Malaysia is a complex process with specific regulations and requirements. Here's a general overview:
Key Steps to Hiring Foreign Workers in Malaysia:
Obtain Approval:
Visa with Reference Number (VDR): The employer must obtain a VDR from the Immigration Department of Malaysia.
Quota Approval: Secure approval from the Ministry of Home Affairs for the number of foreign workers required.
Levy Payment: Pay the necessary levies imposed by the government.
Security Bond: Provide a security bond to guarantee compliance with immigration laws.
Medical Examination: Foreign workers must undergo a medical examination in their home country, certified by a Malaysian-approved medical center.
Foreign Worker Compensation Scheme: Enroll the foreign worker in this mandatory insurance scheme.
Passport Validity: Ensure the worker's passport is valid for at least 12 months.
Temporary Employment Visit Pass (PLKS): Obtain a PLKS for the foreign worker.
Important Considerations:
Age Limit: Foreign workers must be between 18 and 45 years old.
Employment Period: The maximum employment period is 10 years, with a possible 3-year extension.
Compliance with Regulations: Stay updated with the latest immigration and labor laws, as regulations can change frequently.
Additional Tips:
Prepare Necessary Documentation: Gather all required documents, including passports, medical certificates, and employment contracts.
Monitor Compliance: Regularly monitor compliance with immigration and labor laws to avoid penalties and legal issues.
By following these guidelines and staying informed about the latest regulations, employers can successfully hire foreign workers in Malaysia.
Types of Visas for Foreign Workers in Malaysia
The primary visa type for foreign workers in Malaysia is the Temporary Employment Visit Pass (PLKS). This visa is issued to foreign workers who are employed in specific sectors and have obtained the necessary approvals from the Malaysian government.
Labor Laws and Regulations
Malaysia has a comprehensive labor law framework that governs the employment of both local and foreign workers. Some key labor laws that employers must adhere to when hiring foreign workers include:
Employment Act 1955: This act provides for minimum wages, working hours, overtime pay, annual leave, sick leave, and other employment benefits.
Industrial Relations Act 1967: This act governs industrial relations, including collective bargaining, trade unions, and dispute resolution mechanisms.
Minimum Wages Order: This order sets the minimum wage rate for different sectors and regions in Malaysia.
Social Security Act 1969: This act provides for social security benefits, including pension, unemployment benefits, and medical benefits.
Tax Implications
Foreign workers in Malaysia are subject to income tax. The tax rate varies depending on their income level. Employers are generally responsible for deducting and remitting income tax on behalf of their foreign employees.
Key Tax Considerations:
Income Tax: Foreign workers are subject to income tax on their Malaysian-sourced income.
Withholding Tax: Employers are required to withhold income tax from the employee's salary and remit it to the Inland Revenue Board (IRB).
Social Security Contributions: Employers and employees are required to contribute to the Employees Provident Fund (EPF) and the Social Security Organization (SOCSO).
Other Taxes: Foreign workers may be subject to other taxes, such as real property tax and stamp duty, depending on their specific circumstances.
Additional Considerations:
Immigration Regulations: Employers must comply with immigration regulations, including obtaining necessary approvals and permits for foreign workers.
Labor Market Conditions: Understanding the current labor market conditions in Malaysia can help employers assess the demand for foreign workers in specific sectors.
Currency Exchange Controls: Employers should be aware of any foreign exchange controls that may affect the payment of salaries to foreign workers.
Cultural and Language Differences: Employers should consider the cultural and language differences between Malaysian workers and foreign workers to ensure effective communication and integration.
By understanding these key aspects of hiring foreign workers in Malaysia, employers can navigate the complexities of the process and ensure compliance with all relevant laws and regulations.
Requirements for Hiring Foreign Workers
The requirements for hiring foreign workers in Malaysia are as follows:
Pre-Arrival Requirements:
VDR Application: Employers must submit a Visa with Reference Number (VDR) application form to the Immigration Department.
Quota Approval: Obtain approval from the Ministry of Home Affairs for the number of foreign workers required.
Levy Payment: Pay the required levy fees.
Security Bond: Provide a security bond to guarantee the foreign worker's compliance with immigration laws.
Medical Report: Obtain a medical report from the foreign worker's home country, approved by the Malaysian Ministry of Health.
Foreign Worker Compensation Scheme: Enroll the foreign worker in this insurance scheme.
Post-Arrival Requirements:
Passport Validity: The foreign worker's passport must be valid for at least 12 months.
VP(TE) Extension: Apply for an extension of the Temporary Employment Visit Pass (VP(TE)) if necessary.
Health Insurance: Maintain a valid Health Insurance Protection Scheme for Foreign Workers (SPIKPA) policy, except for those in the plantation sector.
Additional Considerations:
Age Limit: Foreign workers must be between 18 and 45 years old at the time of their initial entry into Malaysia.
Employment Period: The maximum employment period is 10 years, with a possible 3-year extension.
Absconding: Employers are responsible for reporting any cases of foreign workers absconding to the Immigration Department.
By following these requirements and staying updated on the latest regulations, employers can successfully hire foreign workers in Malaysia.
Source Countries Allowed
Foreign workers in Malaysia must be from specific source countries approved by the Malaysian government. The list of permissible source countries may change from time to time, so it's important to check the latest updates from the Ministry of Home Affairs (MOHA).
As of now, the primary source countries for foreign workers in Malaysia include:
Indonesia
Nepal
Myanmar
India
Vietnam
Philippines (men only)
Pakistan
Thailand
Cambodia
Sri Lanka
Laos
Turkmenistan
Uzbekistan
Kazakhstan
Bangladesh (plantation sector only, through a government-to-government agreement)
Important Note:
The specific sectors where foreign workers can be employed and the eligibility criteria may vary depending on the source country. For example, some countries may be allowed for specific sectors like construction, manufacturing, plantation, or services.
By following these guidelines and staying informed about the latest regulations, employers can ensure compliance with Malaysian immigration laws and successfully hire foreign workers from approved source countries.
Working in Sectors
Foreign workers in Malaysia can be employed in various sectors, subject to specific regulations and quotas. Here are the primary sectors where foreign workers are typically employed:
1. Manufacturing:
Electronics
Automotive
Food processing
Textiles
Chemical industries
2. Construction:
Building construction
Infrastructure projects
Civil engineering works
3. Plantation:
Palm oil plantations
Rubber plantations
4. Agriculture:
Farming
Horticulture
5. Services:
Restaurants
Cleaning services
Security services
Domestic work
6. Mining and Quarrying:
Mining operations
Quarrying activities
Important Considerations:
Source Country Restrictions: Foreign workers must come from approved source countries, and specific sectors may be restricted to certain nationalities.
Quotas: There are quotas for foreign workers in each sector, and employers must obtain approval from the Ministry of Home Affairs.
Age Limits: Foreign workers must be between 18 and 45 years old.
Medical Fitness: Foreign workers must be medically fit to work in Malaysia.
Legal Compliance: Employers must comply with all relevant labor laws and immigration regulations.
Applications for Foreign Worker
To apply for foreign workers in Malaysia, you'll need to go through a multi-step process involving various government agencies. Here's a general overview:
1. Online Application:
Foreign Workers Integrated Management System (ePPAx): This is the primary platform for applying for foreign workers. You can access it through the Ministry of Human Resources website.
Required Documents:
Company registration documents
Quota approval letter from the Ministry of Home Affairs
Payment receipts for levies and fees
Passport copies of the foreign workers
Medical reports from approved health centers in the source country
Employment contracts
2. Quota Approval:
Ministry of Home Affairs: You'll need to obtain quota approval for the number of foreign workers you require. This involves submitting an application to the Ministry of Home Affairs, which will assess your company's needs and the availability of local labor.
3. Levy Payment:
Payment of levies: Once you obtain quota approval, you'll need to pay the required levies to the government. The levy amount varies depending on the nationality of the worker and the sector of employment.
4. Visa Processing:
Visa with Reference Number (VDR): After obtaining quota approval and paying the levies, you'll need to apply for a VDR for each foreign worker. This is done through the Immigration Department.
Temporary Employment Visit Pass (PLKS): Once the VDR is approved, you can apply for a PLKS for each foreign worker. This visa allows foreign workers to enter and work in Malaysia for a specific period.
Important Considerations:
Source Countries: Foreign workers must come from approved source countries.
Medical Fitness: Foreign workers must be medically fit to work in Malaysia.
Compliance with Regulations: Employers must comply with all relevant labor laws and immigration regulations.
By following these steps and staying informed about the latest regulations, you can successfully hire foreign workers in Malaysia.
For the most accurate and up-to-date information, it is recommended to consult the following useful resources:
Malaysian Immigration Department: https://www.imi.gov.my/index.php/en/main-services/foreign-worker/
Ministry of Home Affairs: https://www.moha.gov.my/index.php/en/bahagian-pa-dasar-dasar-semasa/current-policies-on-recruitment-of-foreign-workers
Foreign Workers Integrated Management System (ePPAx): https://fwcms.com.my/
How Professional Can Help with Hiring Foreign Workers in Malaysia
Hiring foreign workers in Malaysia can be a complex process, involving multiple legal and administrative steps. To ensure compliance and streamline the process, it's highly recommended to seek assistance from Professional:
Streamlined Process: Professional specializes in finding and hiring foreign workers. They have established networks and experience in navigating the complex process.
Compliance Expertise: They are well-versed in immigration laws, labor regulations, and visa requirements, ensuring that all legal obligations are met.
Document Preparation: They can assist in preparing necessary documents, such as work permits, visas, and employment contracts.
Cost-Effective Solutions: Professional has established relationships with foreign recruitment agencies, which can help reduce costs and expedite the hiring process.
Professional Counsel: Professional can provide guidance on complex legal issues related to foreign worker employment, such as contract drafting, and compliance with labor laws.
Risk Mitigation: They can identify potential legal risks and advise on strategies to mitigate them.
Regulatory Updates: They stay updated on the latest immigration and labor laws, ensuring that your company remains compliant.
Tax Compliance: Professional can help ensure that your company complies with all tax obligations related to foreign worker employment, including income tax, social security contributions, and other relevant taxes.
Tax Planning: They can provide advice on tax-efficient strategies for hiring and retaining foreign workers.
Cross-Border Tax Issues: If your company has operations in multiple countries, Professional can help navigate complex cross-border tax issues.
By working with Professional, you can:
Reduce administrative burdens: Delegate time-consuming tasks to experts.
Minimize legal risks: Ensure compliance with all relevant laws and regulations.
Optimize costs: Identify cost-effective solutions for hiring and retaining foreign workers.
Enhance efficiency: Streamline the hiring process and improve productivity.
Improve employee satisfaction: Provide a smooth onboarding experience for foreign workers.
By leveraging the expertise of Professional, you can successfully navigate the challenges of hiring foreign workers in Malaysia and focus on your core business operations.
Comentarios