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IMPACT – MEDIUM
What is the change? Malaysia has adopted new rules that will require supporting documents for certain MSC status company applications to be submitted electronically. The changes affect Employment Pass, Dependent Pass and Long-Term Social Pass applications.
What does the change mean? Beginning April 13, applicants will be required to file copies of passports and other supporting documentation via the online e-Xpats system. Those who do not follow the new filing requirements risk having their applications rejected.
Background: Malaysia has taken a number of steps over the past year to move toward electronic filing and processing of immigration-related documents.
The most recent changes affect both Stage 1 (approval) and Stage 2 (endorsement) of applications for Employment Passes, Dependent Passes and Long-Term Social Passes. Employment Pass applicants will be required to submit copies of passports, resumes and educational certificates, among other supporting documentation. Checklists of required supporting documents vary significantly depending on what type of pass an applicant is seeking, the phase of the application, and, in some cases, the applicant’s nationality. Checklists for documents that are required can be found on MSC Malaysia e-Xpats Centre’s website.
In a related change, Malaysia’s Multimedia Development Corporation (MDeC) announced that the submission of original employment contracts will no longer be required for MSC status company Employment Pass applications. MSC Malaysia status companies are required to upload a copy of the contract during Stage 1 of the process. During Stage 2, companies are required to again upload a copy of the contract, this time duly affixed with a 10-ringgit revenue stamp.
BAL Analysis: Affected applicants are urged to comply with the new requirements lest they face the possibility of MDeC rejecting their applications. Contact your local BAL attorney for questions about what documentation is required or how to submit it.
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.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
What is the change? Malaysia will limit the duration of certain Employment Passes based on the foreign employee’s minimum salary.
What does the change mean? Employees working for companies under MSC status and earning less than 5000 Malaysian ringgits (about US$1390) per month will be limited to an initial two-year Employment Pass and two renewals. Also, they may no longer sponsor Dependent Passes and Social Visit Passes for family members.
Background: The new rules cap the maximum Employment Pass duration at six years (the initial two-year pass and two possible renewals of two-year durations each) for foreign workers earning less than RM 5000 per month. Previously, Employment Passes were issued initially for up to three years and could be renewed indefinitely.
Last month, we reported that the Immigration Department restricted Employment Pass holders earning less than RM 5000 from applying for new Dependent Passes for spouses or children under 18. Under the recent announcement, those employees will also be prohibited from applying for Long-Term Social Visit Passes for common-law spouses, parents or children over 18. However, restricted Employment Pass holders whose passes were approved before Dec. 31, 2014 may still apply for new Dependent or Long-Term Social Visit Passes.
Current Employment Pass holders who fall below the new salary minimum and who want to renew their family members’ Dependent or Long-Term Social Visit Passes may do so with an approval letter from the Multimedia Development Corporation (MDeC) confirming that the initial passes were approved before the restriction came into effect, and may obtain a maximum of two renewals. The duration of the renewed Dependent or Long-Term Social Visit Passes will match the duration of the sponsoring foreign worker’s Employment Pass.
BAL Analysis: The new curbs will have a negative impact for MSC status companies trying to attract foreign labor at the stated salary levels, as those workers will have to renew more frequently and will not be able to bring their family members with them.
What is the change? Malaysia has recently begun enforcing an existing rule that foreigners holding new passports take steps to transfer their employment passes and other passes to their new passports.
What does the change mean? Foreign nationals who obtain a new passport should observe “transfer of endorsement” rules to avoid delays while entering or exiting.
Background: Foreigners who obtain a new passport typically travel with both their new passport and their old passport containing their employment pass, dependent pass or other type of pass. However, holders of these passes are required to complete the transfer endorsement of them to the new passport based on immigration guidelines. Malaysian authorities are enforcing these rules because once an old passport is canceled, the pass in the old passport is assumed to be invalid. Authorities are requiring holders of employment passes and dependent passes to process the transfer of endorsement as soon as a new passport is issued.
Foreigners returning to Malaysia with old and new passports can expect immigration authorities at checkpoints to stamp their new passport with a “Report to Immigration” stamp instructing them to complete the transfer of endorsement process by a given deadline. If they fail to complete the process, they are likely to be held up at exit or entry points and stopped from traveling into or out of the country.
BAL Analysis: Foreigners should be aware of the recent enforcement measures of this rule and be sure to transfer their employment passes and dependent passes to a new passport as soon as it is issued.
IMPACT – LOW
What is the change? Employers filing their annual projections of how many foreign workers they plan to hire (FKH projections) are now required to use Malaysia’s Expatriate Services Division online portal.
What does the change mean? Employers who have not filed their FKH projections via the ESD portal will be barred from filing or renewing pass applications of any type until they do so.
Background: Beginning in March 2014, Malaysian authorities began requiring companies hiring foreign nationals to use the ESD portal. Oil, gas and energy companies were the first required to use the portal, and the program was eventually extended to other industries. Employers are now required to use the portal for almost all immigration-related filings in Malaysia.
The mandatory filling of FKH projections is not new, nor are the penalties for failure to file. The new requirement is that employers must file FKH projections using the ESD portal.
BAL Analysis: Employers should be sure to use the portal for submission of their projections in order to avoid delays in processing. Employers will not be able to have pass applications processed or renewed for their employees or their employees’ dependents until they comply with this requirement.
What is the change? Employment Pass holders whose monthly income is less than 5,000 Malaysian Ringgits (about US $1,400) are no longer eligible to sponsor spouses or children on Dependent Passes.
What does the change mean? It will be significantly harder for a number of foreign nationals working in Malaysia to live in Malaysia with their spouses and children.
Background: The change came about as a result of a joint decision between Malaysia’s immigration authorities and its Multimedia Development Corporation (MDeC). The decision initially covered ICT status companies, but was extended to cover MSC status companies, too.
Current Dependent Pass holders whose sponsor’s salary falls below the new minimum can remain until the expiration of their current passes. A renewal request will be denied, however, unless the Employment Pass holder’s salary rises above 5,000 Malaysian Ringgits per month.
BAL Analysis: While the policy change will not affect foreign nationals making more than 5,000 Malaysian Ringgits a month, it has a big impact on those making less than that amount and will make it significantly more challenging for them – if not impossible – to live with their families in Malaysia. The change could hinder employers’ ability to recruit foreign nationals as well, because one factor workers might consider before accepting an assignment in Malaysia is the ability to be with their dependents.
What is the change? Processing times are longer than usual for applications submitted to the immigration office in Putrajaya or to Malaysia’s Multimedia Development Corporation (MDeC) in Cyberjaya. The delays may be due in part to the holiday rush, but are also the result of general staffing limitations.
What does the change mean? Companies submitting applications should prepare for possible delays.
Background: Though the longer processing times appear, in part, due to the holidays, the delays also seem to be caused by general staffing limitations. Longer processing times should be expected until further notice.
In Putrajaya, Employment Passes are taking four to six weeks to process. Professional Visit Passes are taking two to four weeks and Dependent Passes are taking six to eight weeks. Journey Performed Visas are taking seven to 10 business days and Endorsement of Pass applications are taking five to seven business days.
In Cyberjaya, there is no change to Stage 1 of MSC status applications; application processing still takes three to five days. However, Stage 2 of MSC status applications has been delayed, taking between 14 and 21 business days to process. Stage 1 of ICT status applications is taking seven to 10 business days. Stage 2 of ICT status applications is taking 14 business days. Endorsement of Pass applications is taking three to five business days.
BAL Analysis: It is difficult to tell when the longer processing times will subside. For the time being, businesses should figure the delays into their timelines. BAL will continue to monitor processing times and will notify clients of any significant changes.
What is the change? Malaysia’s Multimedia Development Corporation (MDeC) has announced updates to processing that will impact dependents, long-term social visit pass holders and Philippine nationals.
What does the change mean? Dependent passes will only be issued to applicants 18 years and younger; long-term visit pass holders cannot study, work or perform political activities; a requirement has been removed for certain foreign knowledge workers holding Philippine passports.
Background: According to the announcement issued Nov. 3, MDeC will only grant dependent passes to dependents 18 years old and younger. Dependents older than 18 will be granted long-term social visit passes. Long-term social visit pass holders are not allowed to study, work, start a business, or be involved in political speeches, lectures, talks or any political activities. The announcement also confirms a policy we reported last week that MDeC has stopped issuing work authorization (consent to work) to foreign workers’ spouses holding dependent passes. Spouses who wish to work must obtain an independent Employment Pass.
Under another rule change, foreign knowledge workers holding Philippine passports who enter Malaysia without obtaining a reference visa will no longer be required to show a Philippine Overseas Employment Administration certificate when they apply at the Immigration Department.
BAL Analysis: Foreign nationals visiting Malaysia or bringing dependent family members should be aware of these updated changes.
IMPACT – HIGH
What is the change? Malaysia’s Multimedia Development Corporation (MDeC) is no longer issuing work authorization (“consent to work”) to holders of Dependent Passes, i.e. spouses of Employment Pass holders.
What does the change mean? Spouses who want to work must cancel their Dependent Passes and apply for an Employment Pass.
Background: While there has not been an official announcement, the MDeC confirmed via telephone that as of September it has stopped accepting applications for work authorization, known as Consent to Work, for Dependent Pass holders. Consent to Work is an additional endorsement on a Dependent Pass that allows the spouse of an Employment Pass holder to work.
Spouses on Dependent Passes who wish to work must now cancel their Dependent Pass and apply for an Employment Pass. This only affects those applying through MDeC, which covers MSC Malaysia-status companies and information and communication technology (ICT) status companies.
BAL Analysis: This change may have advantages and disadvantages for employers. While it requires companies hiring Dependent Pass holders to take additional steps to cancel a Dependent Pass and apply for an Employment Pass, it also give employers more control because employees who were considered dependent family members are no longer tied to the employment status of the Employment Pass holder.
What is the change? The Diwali (Deepavali) holiday will be celebrated Oct. 22 – 24 in India and Oct. 22 in Singapore and Malaysia.
What does the change mean? Government offices will be closed in observance of the holiday and immigration services will be suspended.
Background: Diwali or Deepavali is the Hindu Festival of Lights signifying emergence from physical and spiritual darkness. Times may vary in different parts of India based on variations of the lunar month. Offices in Singapore and Malaysia will be closed in observance of the holiday on Oct. 22.
BAL Analysis: Employers and employees should submit applications before the holiday break to avoid delays.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
What is the change? As of Oct. 1, companies under Malaysia’s Multimedia Development Corporation (MDeC) must submit applications for Professional Visit Passes (PVP) with the Expatriate Service Division (ESD).
What does the change mean? The e-Xpats Service Centre will no longer accept Professional Visit Pass applications.
Background: The announcement that MDeC companies must file PVP applications through ESD starting Oct. 1 coincides with Malaysia’s announcement last week that all PVP applications must be submitted electronically through ESD’s online portal, also beginning Oct. 1. The Immigration Department discontinued manual submissions of PVP applications on Sept. 25.
The changes mean that MDeC companies must first register with the ESD before they can file PVP applications. This is likely to cause a backlog in registration which will in turn delay all PVP applications.
BAL Analysis: Currently, thousands of companies are waiting to be registered with the ESD’s online portal. The current wait time is six to eight weeks and could be stretched to two to three months as MDeC companies join the queue to register.