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MALAYSIA – Mandatory Approval for MDEC Registered Companies
February 10, 2023
The Labor Department in Malaysia has made it mandatory for companies intending to hire foreign nationals to obtain approval from their department before the submission of the initial work permit. This requirement is in line with the amendments made in Malaysia’s Labor Act that has taken effect from 1 January 2023.
Malaysia Digital Economy Corporation (MDEC) New Requirements
From 1 February 2023, MDEC registered companies will be required to submit the approval from the Labor Department for the submission of the Foreign Knowledge Worker (FKW) projections. MDEC announced that this requirement is mandatory, and companies may be able to submit their applications to the Labor Department via this link.
FKW projections are submitted on an annual basis or as and when the company needs additional quota for hiring foreign nationals. It is still unclear whether or not this Labor Department Approval has to be done annually or if it will be required for each work permit application.
Newland Chase Insights
MDEC registered companies must ensure to complete this requirement before it takes effect to ensure there are no unfavorable impacts on any new work permit applications. There is very limited information released by MDEC with regard to this change and Newland Chase will continue to monitor any relevant updates in relation to this new requirement.
Expatriate Services Division (ESD) has not made any announcements yet in relation to any process changes as a result of the Labor Act amendment. However, it may be prudent for ESD registered companies to start preparing for the labor application approval similar to the MDEC requirement.
As always, don’t hesitate to reach out to your Newland Chase dedicated contact or submit an inquiry here should you have any specific questions regarding this announcement.
