Further to our previous alert dated 26 February 2026, the Malaysia Digital Economy Corporation (MDEC) has provided further details on the revised Employment Pass policy for companies under its purview. Based on the recent briefing session conducted by MDEC, the guidelines as shared by MDEC remain consistent with those previously provided by Expatriates Service Division.
Below are the key takeaways from the briefing session by MDEC:
Effective date and applicability of the revised Employment Pass policy
The applicability of the revised Employment Pass (EP) policy will be determined based on the EP application submission date. Applications submitted prior to 1 June 2026 will continue to be assessed under the current policy framework, while applications submitted on or after 1 June 2026 will be subject to the revised EP policy.
For applications submitted prior to 1 June 2026, in the event the application is returned by the immigration authority for further documents and the application is subsequently resubmitted after 1 June 2026, the application may be assessed under the revised EP policy instead of the current EP policy, at the discretion of the immigration authority. As such, it is important to ensure that the documents are submitted in accordance with MDEC’s general requirements to avoid applications being returned by the immigration authority for additional documents or information.
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.
The employment duration is tied to the employing company. If the expatriate changes employer, the EP duration will be recalculated and reset based on the new employment.
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 from 1 June 2026 onwards is illustrated below. These scenarios highlight how changes in salary may trigger a change in EP Category, which may in turn affect the 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 | Category III | Up to 5 years | Required |
| RM3,000 to RM4,999 | Category III | RM5,000 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 |
Dependent Eligibility
Under the revised policy, dependent eligibility remains unchanged for EP Category I and II. However, under EP Category III, dependents are now eligible for non-Malaysia Digital companies. Under current policy, only EP Category III employees under Malaysia Digital companies are eligible to bring in dependents.
Updates on EP Category III applications
The existing cap limiting EP Category III renewals to two cycles will be removed and a cooling-off period before the submission of a subsequent EP Category III application will no longer be applicable.
Succession plan
Similar to the guidance issued by ESD, there is currently no prescribed format for the succession plan. However, the plan may include the identification of roles and responsibilities to be assumed by local employees, as well as a training and mentoring schedule outlining the timeline for knowledge transfer from expatriates to local employees.
Labour market testing requirement under MYFutureJobs
The current labour market testing policy remains unchanged for now.
Based on the updates provided during the briefing session, companies are encouraged to implement proactive measures at this stage in anticipation of the implementation of the revised EP policy. This includes:
Our team can assist in conducting a comprehensive review of the company’s existing expatriate portfolio, assessing exposure under the revised policy, 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.
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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