Manish Speaks, Apr 2022 - SIMPLIFYING EXPAT RELOCATION IN MALAYSIA

Every year, hundreds of expat employees move into Malaysia to meet the country’s soaring talent demand across its diverse sectors. In many cases, their employers – global ventures – are also relatively new to processes concerning their hiring, retention as well as exit formalities. Many believe that entering Malaysia is easy as the country’s openness to FDI, but when it’s their turn in the queue, most companies get overwhelmed by all the immigration paperwork governing expat relocation.

For example, let’s consider rule number one: expat employees are not allowed to apply for work visas themselves. Their employers are responsible for that. But to be an employer, you first need to ensure your company is legally registered in Malaysia. You can do that by ensuring your venture is either registered with The Companies Commission of Malaysia (SSM) under Companies Act 1965 or the Registry of Societies Malaysia (ROS) under the Organization Act 1966 or other specific acts or as an organisation supported by ministries or government agencies or those certified by the Ministry of Foreign Affairs.

If you are a global venture entering Malaysia for the very first time and have no resources to carry out such extensive paperwork prior to company registration, then the best option is to onboard a Professional Employer Organisation (PEO) or Employer on Record (EOR) to legally register your business on your behalf. They can also file for work permits for your expat employees. Once you’ve chosen your candidate, then comes the visa application process.

Every year, the?government?expects global ventures in Malaysia to submit a list of expat employees that they plan to hire during the fiscal year. This is called a projection list and includes not just a list of new (expat) entrants but also those expat employees awaiting visa renewals. The wait-time required for the list to get sanctioned is around 2-4 weeks. In case the position that the candidate has applied for is not mentioned in the government’s system, the company needs to submit a position request to the government for approval, which they usually respond to in 10 -14 days’ time.

To apply for work permits for their employees, employers need to be registered with the Expatriate Services Division, which is a body under the Immigration Department of Malaysia. Depending upon the salary slab and employment category, employers need to apply for the right type of visa for expats. While most of these details are familiar with MNC HR managers, there can be fine print that can catch first-timers in Malaysia off-guard – such as the need for all employment contracts to be submitted in colour and stamped by the Inland Revenue Board (IRB), locally known as Lembaga Hasil Dalam Negeri Malaysia (LHDN).

The LHDN handles income tax, and in Malaysia, the expat employee is responsible for filing his/her own taxes depending on their salary slab.??That said, it is the employer’s responsibility to ensure that the employee remains tax-compliant in all ways. Otherwise, they run the risk of paying penalties for it. Employers are also required to pay the Monthly Tax Deductions of its employees by mid-month. Those who do not furnish income tax returns are liable to a penalty up to MYR 20,000 or imprisonment or both upon conviction. Evading?income tax?also invites fines from MYR 1,000 to MYR 20,000 or imprisonment or both, as well as 300% of tax undercharged (upon conviction).

Expats moving to Malaysia are also given Benefits-in-Kind and other incentives in their packages, especially if the employee in concern occupies a high position in office. Some of these are also subject to exemptions, such as rent, childcare, petrol, phone lines etc. Sometimes, getting expats an employment contract is a struggle as employers may also need to get their academic certificates even translated from their native languages into English by Institut Terjemahan & Buku Malaysia (ITBM).

Simplifying the whole expat relocation process can be a huge relief for companies wanting to bypass the hassle and get the expat employee to start work as soon as possible. At Propay Partners, we help global ventures get their expat talents to Malaysia by taking over all the above-mentioned paperwork and immigration hurdles.

From appointment to visa to their stay in Malaysia, we ensure that expat employees have a smooth life for as long as their contract is valid. We also help MNCs establish their presence in Malaysia by registering the company on behalf of them and paying salaries to all their employees at their Malaysian office.

To know more about our services, please visit us at?www.propaypartners.com

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