MDEC introduces several changes for foreign employees, dependents

  • Malaysia
  • 08/18/2016
  • Berry Appleman & Leiden LLP

What is the change? Beginning Sept.1, the Malaysian Digital Economy Corp. (MDEC) agency will start implementing numerous new policies that will affect employers with MSC or ICT status and foreign national employees and family members.

What does the change mean? Some of the changes are similar to the immigration rules announced by Malaysia’s Expatriate Services Division last month, including the requirement that all employment pass applicants and their dependents obtain an approval letter before traveling to Malaysia.

  • Implementation time frame: Sept. 1.
  • Visas/permits affected: Employment passes (Categories I, II and III), dependent passes, long-term social visit passes.
  • Who is affected: Foreign nationals working in or planning to work in Malaysia.
  • Business impact: Employers must ensure that policies are updated and that their foreign employees are made aware of the changes.

The changes cover a wide range of immigration-related policies, summarized as follows:

  • Passport validity. Passports must be valid at least 12 months beyond the date when they are endorsed with a visa. BAL recommends that passports be valid for 13 or more months.
  • Approval letters. All employment pass applicants and their dependents must obtain an approval letter issued by MDEC before entering Malaysia. Visa-required nationals must additionally obtain a visa or visa with reference (VWR) endorsement from a Malaysian mission before traveling. This change will affect the timing of travel, as currently applicants may enter Malaysia and await the approval letter in-country.
  • Required exit. Individuals currently holding Category III employment passes (local contracts of less than one year and earning less than 5,000 ringgits, or about US$1,250, per month) applying for the same category must cancel their pass and exit Malaysia and apply for a VWR in their home country before re-entering Malaysia. This rule also applies to current dependent pass, student pass and professional visit pass holders applying for Category III employment passes.
  • Cooling off period. Category III employment pass holders seeking to switch employers and apply for a new Category III employment pass must exit Malaysia and remain outside the country for at least 90 days (from the date of cancelation of the previous employment pass).

Other changes:

  • Permission to Study. Employment pass holders seeking permission to study must submit their application through the e-Xpats Service Centre.
  • Newborns. Parents of a child born in Malaysia who fail to apply for a dependent pass within six months of the date of birth must go through a longer three-step process and obtain a Special Pass through immigration authorities in Putrajaya before obtaining the child’s dependent pass.
  • Social Visit Passes. Each time an applicant seeks to renew a social visit pass for children over 18 years old or for common-law partners, the applicant must obtain a new original confirmation letter from the applicant’s respective embassy in Malaysia.

BAL Analysis: Employers should be aware of the changes and how they affect business and travel schedules. MDEC authorities are expected to release a circular with further details before the Sept. 1 implementation date.

This alert has been provided by the BAL Global Practice group and our network provider located in Malaysia. For additional information, please contact your BAL attorney.

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