Following our previous alert dated 13 March 2026, the Malaysia Digital Economy Corporation (MDEC) and the Expatriate Services Division (ESD) have issued further updates on the revised salary policy, effective 1 June 2026.
Under the latest announcements, the succession plan requirement for Employment Pass Categories II and III has been deferred to 1 January 2027, giving companies more time to prepare and comply.
In addition, from 3 June 2026, MDEC introduced a new process for Foreign Knowledge Worker (FKW) projection applications. Companies must now submit supporting documents to justify their applications, and approvals are no longer issued immediately.
Postponement of the succession plan requirement
The succession plan requirement for Employment Pass Categories II and III under MDEC and ESD has been deferred to 1 January 2027, giving companies additional time to prepare and align with the new requirements.
The authorities have not yet issued a formal succession plan template. In the meantime, companies are encouraged to prepare a comprehensive plan that addresses the following:
Additional supporting documents for specific arrangements / requirements under MDEC
Companies under MDEC’s purview must submit the relevant supporting documents with their Employment Pass applications, where applicable:
For Non-Malaysia Digital (MD) companies operating in the Global Business Services (GBS) sector, supporting documents may include an official letter or other evidence confirming that the company operates in the GBS sector. Examples include:
a) GBS Malaysia membership
b) Contact Centre Association of Malaysia (CCAM) membership
If these documents are not available, MDEC will assess whether other supporting documents are acceptable.
For GBS roles that require native or near-native language proficiency, companies must clearly justify the language requirement, regardless of whether they are MD or Non-MD companies. This applies to all Employment Pass categories.
Employment Pass Category III applications in the GBS sector that require native or near-native language proficiency may continue to be assessed under the previous salary policy until 1 June 2027. Under that policy, the applicable salary range is MYR 3,000 to MYR 4,999.
Foreign Knowledge Worker Projection under MDEC
Under the new Foreign Knowledge Worker (FKW) projection process for companies under MDEC’s purview, MDEC will assess applications against the revised salary policy requirements and the supporting documents submitted. Assessment and approval are expected to take approximately 14 working days and will no longer be immediate.
Once the FKW projection is approved, companies may submit their Employment Pass applications. Given the longer processing timeframe, organisations should plan recruitment needs well in advance and take a forward-looking approach to workforce planning to avoid disruption to business needs.
Our team can review and advise on FKW projection submissions and assess compliance with the latest MDEC and ESD guidelines. We can also support the preparation of succession plans ahead of the 1 January 2027 implementation date to help ensure a smooth process and compliance with the new requirement.
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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