Malaysia has introduced the 1:3 Internship Policy as part of its efforts to strengthen local talent development while continuing to attract foreign expertise. The initiative has been brought forward by the Ministry of Human Resources (KESUMA) through Talent Corporation Malaysia Berhad (TalentCorp). The policy links expatriate Employment Pass approvals to the provision of structured, paid internship placements for Malaysian students under the National Structured Internship Program (MySIP) for every foreign national hired by a local company.
The policy was originally scheduled to take effect in January 2026. However, the pilot implementation period has been extended until March 31, 2026, to allow employers additional time to prepare and comply.
The 1:3 Internship Policy requires employers hiring expatriates to contribute to local talent development by offering structured, paid internship placements under MySIP. Internship requirements are determined based on EP category.
- EP Category I (EPI): 1 expatriate : 3 interns
- EP Category II (EPII): 1 expatriate : 2 interns
- EP Category III (EPIII): 1 expatriate : 1 intern
Internship obligations are capped at 2% of total company workforce, regardless of the number of EP approvals.
Companies will be notified of internship quotas after EP approval. All internships will have to be resgistered via MyNext and endorsed under MySIP.
Approved Employment Passes are not cancelled or delayed due to non-compliance. However, it may impact future employment pass applications.
Exemptions apply to companies who have been operating for under two years, are registered as representative or regional offices, companies granted government tax exemptions. Additional exemptions may be released after authorities consider feedback from the pilot phase.
What this means for employers
The extension of the pilot phase gives employers more time to adjust their internship programs to meet MySIP requirements. While current Employment Pass approvals are not affected, the policy will influence how future expatriate hiring is assessed. Employers should use this extended period to review workforce plans, put compliant internship structures in place, and prepare for the policy’s impact once full implementation begins.
This news alert is for informational purposes only and does not constitute legal advice. For case-specific guidance or further information, please contact Newland Chase directly.
