Quick answer: To hire a foreign employee in Malaysia, your company first registers with Immigration's Expatriate Services Division (ESD), or the MIDA Expatriate System if it falls under MIDA. It must meet the paid-up capital requirement, from RM250,000 for a locally owned company to RM500,000 for a 100% foreign-owned one. It then applies for an Employment Pass, and the candidate may enter Malaysia only after the Approval Letter.
- Your company must be registered and activated before it can apply for an Employment Pass.
- Paid-up capital depends on ownership: RM250,000, RM350,000, RM500,000 or RM1,000,000.
- ESD Online serves most companies. The MIDA Expatriate System serves companies under MIDA's purview.
- The candidate cannot enter Malaysia to work before the Approval Letter.
- Check the salary category first: Category I is RM20,000 and above.
Which System Do You Use?
ESD Online or the MIDA Expatriate System.
| ESD Online | MIDA Expatriate System | |
|---|---|---|
| Who uses it | Companies not under MIDA's purview | Manufacturing (all sub-sectors) and selected services such as Global Services Hubs, regional offices, R&D, and hotel and tourism |
| Where to apply | Immigration's ESD Online | MIDA Expatriate System, using your InvestMalaysia ID |
| Processing time | Five working days, subject to complete documents | 15 working days including Immigration work process |
| Company approval first | Register and activate the company with ESD | Hold the MIDA approval, such as a manufacturing licence, incentive, status or grant |
| Key point | Paid-up capital by ownership | Key Post or Term Post, each with its own conditions |
From 1 June 2026, new applications from companies under MIDA’s purview must go through the MIDA Expatriate System. ESD Online is closed to new submissions for those companies.
Company Capital Requirement
| Company ownership | Minimum paid-up capital |
|---|---|
| 100% locally owned | RM250,000 |
| Joint venture (at least 30% foreign shareholding) | RM350,000 |
| 100% foreign-owned | RM500,000 |
| Foreign-owned (51% and above) wholesale, retail and trade or unregulated services | RM1,000,000 |
From Immigration’s ESD Online Guidebook V5 (September 2024). Public limited companies, companies limited by guarantee and certain associations are exempt. Confirm the current figures before you apply.
Step-by-Step Process
From company registration to endorsement.
Check which system your company uses
Manufacturing companies and selected services under MIDA's purview use the MIDA Expatriate System. Other companies use ESD Online.
Meet the company requirements
Check your paid-up capital against the table above. MIDA's guidelines also list conditions such as not being on Immigration's suspect or blacklist and having a proper tax status with LHDN.
Register and activate the company
In ESD Online, create an account and activate it by email, purchase the e-Info SSM, and submit the company information and your projection of planned hires. Immigration verifies and notifies the status, with a five working day service charter.
Then complete the Letter of Undertaking, have the selected director sign it and upload it on letterhead with the director's IC or passport.
Prepare the candidate's documents
Collect the passport, certificates, resume, employment contract and job description. See our documents checklist.
Submit the Employment Pass application
Create the application in ESD Online or the MIDA Expatriate System, upload the documents and pay online. Incomplete applications are returned or not considered, so check before you submit.
Receive the Approval Letter
The company is notified by the system and by email. The candidate must have the Approval Letter before entering Malaysia.
Endorse the pass and bring the family
The Employment Pass must be endorsed within 30 days. Dependants can be submitted together with the principal application or later.
Want us to handle the application? We prepare and submit it for you by video consultation.
Fees
| Item | Amount | Note |
|---|---|---|
| MIDA fee per Employment Pass application | RM2,000 | Excludes 8% SST. MIDA route only. |
| Immigration processing fee | RM125 | Per MIDA's guidelines |
| Immigration pass issuance | RM200 Term Post, RM300 Key Post | Per MIDA's guidelines |
| Visa fee | RM6 to RM50 | Per MIDA's guidelines |
| MDEC fee per Employment Pass applicant | RM2,160 | For Malaysia Digital companies, per MDEC's FAQ |
Immigration’s ESD guidebook does not list fee amounts. Fees change, so confirm the current amounts before you apply.
Common Mistakes
Applying before the company is activated
The company must be registered and activated with the Letter of Undertaking first.
Underestimating the capital requirement
A 100% foreign-owned company needs RM500,000 in paid-up capital. Foreign-owned wholesale and retail needs RM1,000,000.
Letting the candidate start work early
The Approval Letter is required before entering Malaysia. Illegal employment carries penalties.
Using the wrong salary category
Check the minimum basic salary for the category before you submit.
Frequently Asked Questions
Quick answers on hiring foreign staff.
How do I hire a foreign employee in Malaysia?
The company first registers with Immigration's Expatriate Services Division (ESD), or with the MIDA Expatriate System if it falls under MIDA's purview. It then applies for an Employment Pass for the candidate. The pass is approved before the candidate enters Malaysia.
Can any Malaysian company hire a foreign employee?
Only if it meets the company requirements. These include paid-up capital of RM250,000 for a 100% locally owned company, RM350,000 for a joint venture and RM500,000 for a 100% foreign-owned company. Foreign-owned (51% and above) wholesale, retail and trade or unregulated service companies need RM1,000,000.
What is the difference between ESD and MIDA for expatriate applications?
Companies under MIDA's purview, such as manufacturing and selected services, submit new applications through the MIDA Expatriate System. Other companies use Immigration's ESD Online.
How long does an Employment Pass application take?
Immigration's guidebook lists a service charter of five working days for expatriate applications, subject to complete documents. MIDA states 15 working days including Immigration's work process.
How much does it cost to apply?
For MIDA applications, MIDA charges RM2,000 per Employment Pass application, excluding 8% SST. Immigration charges RM125 as a processing fee, plus RM200 for a Term Post or RM300 for a Key Post for pass issuance, plus a visa fee of RM6 to RM50.
Can the employee enter Malaysia before approval?
No. The Approval Letter is required before the employee enters Malaysia. The Employment Pass must be endorsed within 30 days.
What qualifications does the expatriate need?
Immigration's guidebook sets a degree with 3 years of experience, a diploma with 5 years, or a technical certificate with 7 years.
How many foreign employees can my company hire?
Immigration's guidebook does not state a fixed number. A company submits a projection of its planned hires, and can request more with justification if the approved number is used up.
Do I need to advertise the job locally first?
For MIDA applications, new Term Post applications need a MyFutureJobs advertisement, with listed exemptions. For MDEC applications, MDEC lists SOCSO approval after advertising on MyFutureJobs and JTKSM approval under Section 60K of the Employment Act 1955.
Can the company be penalised for hiring illegally?
Yes. Immigration's guidebook warns of liability under Section 56 of the Immigration Act 1959/63, with fines up to RM10,000, imprisonment up to five years, or both.
Can a foreign employee bring family?
A Category I, II or III Employment Pass holder can apply for a Dependent Pass for a spouse and children under 18. A Long-Term Social Visit Pass covers parents, parents-in-law, children aged 18 to 25 and a common law spouse.
About This Guide
This guide was prepared by Neutral Consulting PLT, a Kuala Lumpur firm of chartered accounting and advisory professionals with 10 years in practice. We help foreign and local companies set up, stay compliant and hire talent in Malaysia. Every figure and rule here was checked against the official sources listed below in November 2026.
Sources
Official sources
- Immigration Department (ESD), ESD Online Guidebook V5 (September 2024)
- Immigration Department (ESD), Transition to MIDA Expatriate System (MES) FAQ
- MIDA, Employment Pass guidelines (1 June 2026)
- MDEC, Expatriate Services FAQ
- Immigration Department (ESD), Revised Expatriate Salary Policy FAQ
This page is general information, not legal advice. Agencies change their requirements, so confirm the current rules with the Immigration Department (ESD), MIDA and MDEC, or with us, before you act. Checked November 2026.
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