The Malaysian government has unexpectedly planned to cut the number\nof foreign workers in the country to encourage the recruitment of local\nlabour and increase domestic income. This move has triggered deep\nconcerns among expatriates who have long settled there, including\nSanjeet, an Indian business consultant who has considered Malaysia his\nhome for more than a decade.<\/p>\n
After living and working in the Southeast Asian nation for over ten\nyears, Sanjeet felt comfortable with the climate, society, and lifestyle\nthere. However, the government\u2019s latest plan to reduce reliance on\nforeign labour has made his future and that of thousands of others\nuncertain.<\/p>\n
\u201cOnce I crossed the five-year mark, Malaysia seemed like an ideal\nlong-term choice. One gets used to what Malaysia offers,\u201d Sanjeet told\nAl Jazeera on Thursday (26\/03\/2026).<\/p>\n
Starting in June, the minimum salary threshold for foreign workers to\nobtain visas will be doubled, and employers will be restricted in the\nduration they can sponsor the same visa holder. This sudden policy has\nleft many expatriates feeling uncertain about further investments in\nMalaysia.<\/p>\n
\u201cWhat is surprising is that this came out of the blue. It leaves room\nfor doubt regarding long-term plans, which include things like buying a\nhouse or a car here,\u201d said Sanjeet.<\/p>\n
Malaysia has been an attractive destination for foreign workers for\ndecades since gaining independence from Britain in the 1960s. Currently,\nthere are about 2.1 million documented foreign workers, most of whom\nwork in manual sectors with salaries around the minimum monthly wage of\n1,700 ringgit (Rp 7,194,400), while a small portion work in high-salary\nspecialist sectors.<\/p>\n
In 2024, Home Minister Saifuddin Nasution stated that the population\nof high-income expatriates, estimated at 140,000 people, contributes\naround 75 billion ringgit (Rp 317.4 trillion) to the domestic economy.\nAdditionally, they contribute about 100 million ringgit (Rp 423.2\nbillion) in taxes annually.<\/p>\n
In the latest five-year national policy strategy released in 2025,\nthe government warned that sustained dependence on low-skilled foreign\nworkers has hindered the adoption of important technologies. This is\nseen as creating negative ripple effects on the labour market and\nnational productivity.<\/p>\n
\u201cThis issue triggers ripple effects in the labour market, including\nthe dominance of low-skilled and low-wage jobs, wage distortions, and\nslow productivity growth,\u201d wrote the authors of the 13th Malaysia\nPlan.<\/p>\n
As part of efforts to increase incomes in a country with an average\nmonthly salary of around 700 US dollars, the government plans to cut the\nproportion of foreigners in the workforce from 14.1 percent in 2024 to\njust 5 percent by 2035. The Home Ministry in January reaffirmed that\nthese strict requirements will also extend to high-income expatriates to\nstrengthen local talent.<\/p>\n
Under the new rules, the minimum starting salary for three categories\nof work permits will be raised respectively from 10,000 to 20,000\nringgit (Rp 42.32 million to Rp 84.64 million), 5,000 to 10,000 ringgit\n(Rp 21.16 million to Rp 42.32 million), and 3,000 to 5,000 ringgit (Rp\n12.7 million to Rp 21.16 million). Additionally, companies may only\nsponsor foreign workers for five to ten years.<\/p>\n
Thomas Mead, a British wealth manager who has worked in Malaysia\nsince late 2022, admitted to being shocked by the salary jump. He had\njust bought property in Kuala Lumpur with the intention of settling\nthere permanently.<\/p>\n
\u201cThere are always rules in place, including minimum salary\nrequirements. However, the jump from 10,000 ringgit to 20,000 ringgit is\nquite a big surprise. I\u2019ve heard some expatriates starting to talk about\nrelocation options if forced, though many are reluctant to leave,\u201d Mead\nsaid on Thursday.<\/p>\n
Douglas Gan, a Singaporean venture capital founder, believes this\nchange will raise operational costs for companies previously attracted\nto Malaysia\u2019s cost efficiency. He opines that the new rules will be very\nchallenging for recruiting technical talent like engineers from\nsecond-tier cities in China.<\/p>\n
\u201cIf salaries rise to 10,000 ringgit, companies certainly won\u2019t bring\nthem here. For businesses already in Malaysia, we\u2019re taking a\nwait-and-see approach,\u201d said Gan.<\/p>\n
Similar complaints come from Leonardo, an Indonesian citizen working\nin the computer gaming sector in Malaysia. The rule change will\ndowngrade his category from second to third level, threatening his plans\nto bring his mother from Indonesia.<\/p>\n
\u201cMy mother is alone and lives in Indonesia. There was a thought that\nif I could settle here, I could bring her over,\u201d said Leonardo.<\/p>\n
Economist from Kenanga Investment Bank, Wan Suhaimie, warns that the\nsuccess of this policy greatly depends on the availability of local\nworkforce skills. According to him, the salary threshold surge is\nsurprising because many second-tier foreign workers are actually core\nmanagers and specialist engineers.<\/p>\n
\u201cThe long-term benefits depend less on blocking expatriates and more\non whether Malaysia can truly supply those skills. Tenure limits can\nsucceed for skills transfer, but only if the succession plan is real and\nnot just on paper,\u201d explained Suhaimie.<\/p>\n
CEO of FSG Advisory, Anthony Dass, added that the new policy will\ncertainly increase costs for companies reliant on mid-tier expatriate\nlabour. The implementation of this policy\u2026<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/finding-work-in-malaysia-becomes-harder-expats-start-to-worry-1774529482", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }