Further to our previous alerts dated 15 January 2026 and 23 January 2026 on the revision to the minimum salary requirements and pass duration for Employment Passes effective 1 June 2026, additional updates have been provided during the recent briefing sessions conducted by the Malaysian Expatriate Service Centre (MYXpats) for companies under the purview of the Expatriate Services Division (ESD).
These briefings provide further clarity on how the revised Employment Pass (EP) policy will be implemented in practice, including applicability of the revised EP framework, calculation of maximum pass duration, treatment to renewals, changes affecting Category III applications, the implementation of the succession plan requirement and the position on the labour market testing requirement under MYFutureJobs. As the official guidelines have yet to be issued, the information shared may be subject to change.
The Malaysia Digital Economy Corporation (MDEC) has yet to provide confirmation whether the updates shared by ESD are also applicable to MDEC-registered companies.
Below are the key takeaways from the briefing sessions by the MYXpats:
Effective date and applicability of the revised EP Policy
The applicability of the revised EP policy will be determined based on the EP application submission date. Applications submitted before 1 June 2026 will continue to be assessed under the current EP policy, while applications submitted on or after 1 June 2026 will be subject to the revised EP policy.
Maximum duration of EP under the revised policy
The new maximum EP duration will take effect from 1 June 2026 without taking into consideration the duration of any previously issued EPs.
Under the revised policy, companies may apply for an EP for a validity period of up to five (5) years at a time.
In the event of a change in EP Category, the existing pass must be cancelled in accordance with current practice and the subsequent application will be treated as a new submission. In such cases, the maximum duration will be recalculated and reset based on the new EP Category.
Scenarios of applications submitted from 1 June 2026
The impact of the revised policy on applications submitted on or after 1 June 2026 is illustrated below. These scenarios demonstrate how changes in salary may trigger a change in EP Category, which may in turn affect maximum duration eligibility and whether a succession plan requirement applies.
| Current basic salary | Category under current policy | Latest basic salary | Category under revised policy | Maximum EP duration | Succession plan |
| RM10,000 and above
| Category I | RM20,000 and above | Category I | Up to 10 years | N/A |
| RM10,000 and above | Category I | RM10,000 to RM19,999 | Category II | Up to 10 years | Required |
| RM5,000 to RM9,999 | Category II | RM10,000 to RM19,999 | Category II | Up to 10 years | Required |
| RM5,000 to RM9,999 | Category II | RM5,000 to RM9,999
(MRS Sector: RM7,000 to RM9,999)
| Category III | Up to 5 years | Required |
| RM3,000 to RM4,999 | Category III | RM5,000 to RM9,999
(MRS Sector: RM7,000 to RM9,999)
| Category III | Up to 5 years | Required |
| RM3,000 to RM4,999 | Category III | RM3,000 to RM4,999
| Not eligible for EP | N/A | N/A |
Updates on EP Category III applications
Companies registered under ESD will no longer need to secure prior approval from the Ministry of Home Affairs (MOHA) before submitting EP Category III applications.
Furthermore, the existing cap limiting Category III renewals to two cycles will be removed and a cooling-off period before the submission of a subsequent Category III application will no longer be applicable.
Succession plan
Although no official template has been issued by ESD, companies are encouraged to prepare a clearly structured document outlining the designated Malaysian successor(s), the scope of knowledge transfer, proposed timelines, and measurable training milestones. A well organised plan, whether in a table format or as a detailed training schedule, may facilitate a smoother assessment by the authorities.
Labour market testing requirement under MYFutureJobs
The current labour market testing policy remains unchanged for now.
Given the updates shared during the briefing sessions, companies are advised to take proactive measures. This includes:
Our team can assist in conducting a comprehensive review of the company’s existing expatriate portfolio, assessing exposure under the revised framework, and recommending appropriate renewal or alternative immigration pathway strategies. We can also support in developing structured succession plans and advising on workforce planning measures to ensure regulatory compliance while meeting business needs.
In the meantime, we foresee that these requirements may remain fluid until the definitive guidelines are formally issued by the authority. We are monitoring the developments closely and will provide timely updates as further clarity becomes available.
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
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