Immigration

Malaysia | 1:3 Internship Policy by the Ministry of Human Resources

Summary

Recently, the Ministry of Human Resources (KESUMA) introduced the Progressive Policy on Expatriate Contribution to Local Talent Development, referred to as the 1:3 Internship Policy. The Policy, which is implemented through TalentCorp, aims to contribute to National Talent Development by requiring companies in Malaysia to hire up to three (3) students under internship for each expatriate employed. The intention is to strengthen local talent by providing them with hands-on industry exposure and making them workforce-ready while still attracting necessary foreign expertise. 

The pilot implementation of the Policy takes effect from 15 February 2025 and will end on 31 December 2025. Thereafter, the Policy will be officially implemented from 1 January 2026.

The Policy is applicable to all companies obtaining Employment Pass approvals for expatriates from Expatriate Services Division (ESD) or Malaysia Digital Economy Corporation (MDEC). During the pilot phase, only Tier 1 and Tier 2 MYXpats-registered companies under the purview of the ESD are required to adhere to the Policy.

The detail

Key features of the Policy

• Applicable to all companies that are under the purview of ESD and MDEC for the approval of expatriate Employment Passes
• During the pilot phase, only Tier 1 and Tier 2 MYXpats-registered companies under ESD are required to comply with the Policy
• The required number of internship placements will vary based on the expatriate’s Employment Pass category and the company’s workforce size, as outlined below:

 

Number of Internship Placements
Employment Pass (EP) Category	Definition of EP Category	Ratio	Internship Requirement
EP Category I	Monthly base salary of RM10,000 and above	1:3	1 EP approval, 3 internship placements
EP Category II	Monthly base salary between RM5,000 – RM9,999	1:2	1 EP approval, 2 internship placements
EP Category III	Monthly base salary between RM3,000 -RM4,999	1:1	1 EP approval, 1 internship placements

• If the percentage of internship placements exceeds 2% of a company’s total workforce, the number of internship placements will be capped at 2% of the overall workforce
• Internship placements must be conducted under the National Structured Internship Programme (MySIP), which is facilitated through the MyNext online portal
• The internship placements must be for a minimum of 10 weeks and the interns must be paid a minimum of RM500 or RM600 per month depending on the students’ level of study

Companies that meet the following criteria are exempt from the Policy:

1. New companies operating in Malaysia for less than two (2) years
2. Companies with Representative or Regional Offices (RERO)
3. Companies receiving tax exemptions from the government, especially in key sectors such as digital and energy
4. Other exemption requests may be considered by the relevant committee based on feedback from the Policy’s pilot phase

Steps to Apply:

Upon obtaining an Employment Pass approval, companies will receive an email notification from TalentCorp for registration in the MyNext online portal and once the company account is activated, the internship postings can be created for recruitment of interns based on the set ratio. 

Students are required to register with MyNext to browse the latest internship opportunities available and apply for internships which are aligned to their academic requirements. 

How does this new Policy affect you?

Although it has been assured by TalentCorp that the Policy is designed to complement existing systems and will not interfere with current expatriate approval processes, companies are encouraged to evaluate their current workforce population and the potential number of internship placements which may apply based on the guidance provided above. 

In addition, it will be essential for companies to assess the internship programmes which can be offered and costs associated with arranging internship placements within organisations in line with this Policy. Whilst companies will not face penalties for non-compliance as the Policy is deployed to encourage active industry participation, companies that meet the Policy requirement will be given more weight and greater consideration for subsequent expatriate approvals. Additionally, companies can claim a double tax deduction via the MyNext online portal for the associated internship expenses.

Given that the Policy was only recently announced, we will continue to monitor the latest developments and keep you informed as soon as we receive more information from the relevant authorities.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Sasha Reddy       
Partner

Hana Rabi              
Senior Manager

Kimberly Chong  
Manager

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