Employment Pass (EP)

Before any Employment Pass application can be submitted, the sponsoring company in Malaysia must be registered with the Expatriate Services Division (ESD) through the Xpats Gateway portal. This involves creating a corporate account on the Xpats Gateway at https://xpatsgateway.imi.gov.my, submitting company registration documents including the Certificate of Incorporation (SSM), business license, latest audited financial statements, and a valid tax clearance letter from the Inland Revenue Board (LHDN). The company must also nominate a designated Expatriate Representative (usually a director or senior HR officer) who will be the point of contact for all EP-related matters. ESD will review the company's financial standing, compliance history with immigration and labour laws, and the genuine need for foreign expertise. Companies that meet the criteria are granted Approved Company status, which streamlines future EP applications. Companies with a paid-up capital of at least RM500,000 for foreign-owned entities or RM250,000 for locally-owned entities are typically eligible. This registration step takes approximately 5 to 10 working days and must be completed before any expatriate posts can be created.

For Category II and Category III EP applications, the employer must demonstrate that the position could not be filled by a suitably qualified Malaysian citizen. This is achieved through a mandatory labour market testing (LMT) process. The employer must advertise the vacant position on at least two national platforms — typically MyFutureJobs (the official government job portal managed by SOCSO) and one mainstream newspaper or reputable online job board — for a minimum period of 30 days. The advertisement must include the job title, responsibilities, required qualifications and experience, and the proposed salary range in RM. For Category I positions (salary exceeding RM10,000 per month), the labour market testing requirement is generally waived as these roles are considered for senior strategic or specialist positions that require highly specialised expertise not readily available in the local market. However, even for Category I, the ESD may request justification for hiring a foreign national. All advertisement records, including screenshots, publication receipts, and a summary of local applicants (with reasons for rejection), must be uploaded to the Xpats Gateway as supporting evidence.

The formal EP application is submitted through the Xpats Gateway portal by the company's Expatriate Representative. The application requires completion of the online EP application form (Form IM.38) along with uploading of all supporting documents. Required documents typically include: the applicant's passport copy (valid for at least 18 months), recent passport-sized photographs, educational certificates (degree or professional qualifications attested or notarised), professional CV or resume, employment contract signed by both parties stating the monthly salary in RM, company support letter, and proof of academic credentials. The salary declared must match the proposed EP category — Category I (>RM10,000), Category II (RM5,000 to RM10,000), or Category III (<RM5,000). A processing fee of RM500 to RM1,500 applies depending on the category and duration. The Xpats Gateway system will assign a unique reference number upon successful submission. Incomplete applications are rejected at this stage, and all deficiencies must be rectified before resubmission. Any false declarations can result in a 5-year ban on future applications.

Once the application is lodged, the Expatriate Services Division reviews the submission for completeness, compliance, and merit. For Category I and II applications, the review involves the Expatriate Committee (Jawatankuasa Ekspatriat), which evaluates the strategic need for the foreign hire, the company's compliance with localisation (Malaysianisation) targets, and the overall contribution to Malaysia's economy. Category III applications undergo a stricter review, often requiring additional justification from the employer regarding why a local candidate was not suitable. The standard processing time is 5 to 10 working days for Category I, 10 to 15 working days for Category II, and up to 30 working days for Category III. The ESD may issue queries or requests for additional information during this period. If approved, the ESD issues an Approval Letter (Surat Kelulusan) which is valid for 6 months from the date of issuance. This letter confirms the approved EP category, duration (typically 12 to 60 months), and the approved monthly salary. If rejected, the employer receives a rejection notice with reasons and may appeal within 30 days.

Upon receiving the ESD Approval Letter, the next step is to obtain the single-entry visa (Visa Dengan Rujukan / VDR) for the foreign employee. For applicants from countries that require a visa to enter Malaysia, this is arranged through the nearest Malaysian Embassy or Consulate. Applicants from visa-exempt countries may proceed directly to travel. The VDR must be used within 6 months of issuance. The employer must also arrange for the foreign employee's entry into Malaysia. Upon arrival at a Malaysian international entry point (KLIA, Johor Bahru, Penang, etc.), the Immigration officer will endorse the VDR and stamp the passport with a Social Visit Pass (SVP) placeholder valid for up to 30 days, during which the actual Employment Pass sticker must be affixed. For dependent passes (for Category I and II holders), dependents must apply separately via the Xpats Gateway for a Dependent Pass (DP) — for spouses and children under 18 — or a Long-Term Social Visit Pass (LTSVP) for parents or in-laws. The DP processing is done concurrently with the EP application and typically takes 5 working days.

The final stage involves the physical issuance of the Employment Pass. The foreign employee, accompanied by the company's Expatriate Representative, must attend an in-person appointment at the nearest ESD office or designated Immigration Department office to have the EP sticker affixed to their passport within the 30-day validity of the entry pass. The employee must present their original passport, the ESD Approval Letter, and two passport-sized photographs. The EP sticker will indicate the pass category (I, II, or III), the duration of validity, and the employing company name. Once the EP is issued, the foreign employee must register for a Malaysian tax identification number (Tax ID / No. Cukai) with the Inland Revenue Board (LHDN) within 30 days. Tax residency status is determined by physical presence — if the EP holder resides in Malaysia for 182 days or more in a calendar year, they are classified as a tax resident and are subject to progressive income tax rates ranging from 0% to 30%. Non-residents (fewer than 182 days) are taxed at a flat rate of 30% on Malaysian-sourced income. EP holders should also open a local bank account, register for SOCSO (social security) if applicable, and arrange for medical insurance as required by the EP conditions.