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MALAYSIA – Higher Salary Threshold for Sponsoring Dependents, and Possible Delays due to 2015 Employment Pass Projection Processing

A higher salary threshold has been set for Employment Pass (EP) holders employed by Multimedia Super Corridor (MSC) status companies and Information and Communication Technology (ICT) companies who wish to sponsor Dependant Passes (DP) for their spouses or children.

Also, delays are expected in Expatriate Services Division (ESD) Employment Pass processing. Employers are required to submit a new Employment Pass projection for 2015 before any applications can be submitted, but were not previously warned about this.

New Salary Threshold for Dependent Sponsorship

For Employment Pass (EP) holders employed by MSC status companies and ICT companies, who wish to sponsor Dependant Passes for their spouses or children, the minimum monthly salary is now RM5,000.

Who is Affected?

  • Employment Pass holders at MSC status companies and ICT companies who earn less than RM5,000 per month will not be able to sponsor Dependant Passes or long term Social Visit Passes for dependent family members.
  • An existing Employment Pass holder at an ICT company or MSC status company earning less than RM5,000 per month will face difficulties with the renewal of any Dependant Passes for their spouse or children unless his salary has been increased to at least RM5,000 by the time of renewal of his EP. Otherwise, any dependents would have to leave the country at the expiry of their current Dependant Pass.
  • Employment Pass holders without dependents at MSC status companies and those who carry out “shared services” at ICT companies are only required to be paid at least RM2,500 per month.EP holders who are not sponsored by MSC status companies or ICT companies are not affected by this rule change.

2015 Projection Delays

The Expatriate Services Division (ESD) did not notify employers in 2014 that they would be required to file a new Employment Permit (EP) projection for 2015 before any EP applications could be filed; however, this is a requirement.

The processing time for the projection is approximately three weeks, and any company submitting applications via the ESD, and which has not yet submitted its projection for 2015, should therefore allow at least this amount of lead time before submitting any Employment Pass applications for 2015.

For MSC status companies and ICT companies administered by the Multimedia Development Corporation (MDeC), the MDeC normally sends out reminders of the projection requirement in December. As such these companies are more likely to have completed their projection before the New Year started and to have avoided the delays.

Background

The Multimedia Super Corridor (MSC) is a Special Economic Zone in Malaysia designed to promote development of the Malaysian ICT industry. The Multimedia Development Corporation (MDeC) administers Employment Passes for MSC status Companies and other ICT companies. Other Employment Passes and expatriate services are managed by the Expatriate Services Division (ESD), which launched its online application services in 2014.

Action Items

  • Any employer intending to submit Employment Pass applications for foreign nationals in Malaysia in 2015, which has not yet submitted its 2015 projection, should do so as soon as possible to minimise delays.
  • ICT companies and MSC status companies will have to consider the salaries of Employment Pass holders with dependent family members if they want them to extend their EPs, bearing in mind that the new minimum salary requirement may force their family to leave Malaysia.

This news alert was prepared using information provided by Rabin & Associates.

DISCLAIMER: The information contained in this immigration alert has been abridged from laws, court decisions, and administrative rulings and should not be construed or relied upon as legal advice. If you have specific questions regarding the applicability of this information, please contact Peregrine © 2017 Peregrine Immigration Management Ltd.