Malaysia’s Expatriate Services Division (ESD), in coordination with multiple Malaysian government agencies, has issued an updated Revised Expatriate Salary Policy and corresponding FAQ, outlining significant changes to Employment Pass (EP) categories, salary thresholds, maximum employment durations, and dependent eligibility. The revised framework forms part of the New Expatriate Employment Policy (NEEP) and will apply to all EP applications submitted on or after 1 June 2026.
The updated guidance (follows an earlier FAQ issued on January 26, 2026) was jointly developed by the Ministry of Home Affairs (MOHA), Immigration Department of Malaysia, MIDA, MDEC, IRDA, ECERDC, BNM, SC, and the Malaysia Expatriate Services Centre (MYXpats).
Key Implementation Dates
- Applications submitted on or after 1 June 2026 will be assessed under the revised salary policy.
- Applications submitted before 1 June 2026 will follow the previous policy, provided they are complete. Returned applications must be resubmitted within 90 days to remain under the earlier framework.
- Appeals for applications rejected before 1 June 2026 must be submitted within 14 days and no later than 15 June 2026 to be evaluated under the previous policy.
Updated Minimum Salary Thresholds (Effective 1 June 2026)
| EP Category | Current Salary | Revised Salary (1 June 2026) | Current Max Duration | Revised Max Duration | Dependent Eligibility |
|---|---|---|---|---|---|
| EP I | RM10,000+ | RM20,000+ | Indefinite | 10 years | Yes → Yes |
| EP II | RM5,000–RM9,999 | RM10,000–RM19,999 | Indefinite | 10 years (succession plan required) | Yes → Yes |
| EP III | RM3,999–RM4,999 | RM5,000–RM9,999 (RM7,000–RM9,999 for manufacturing-related services) | 3 years | 5 years (succession plan required) | No → Yes (for applications filed from 1 June 2026) |
Note: Salary assessments are based on basic salary only, not total compensation.
Maximum Employment Duration and “10-Year Rule”
The revised policy introduces a structured limit on expatriate tenure:
- The 10-year maximum duration is tied to the employer, not the individual expatriate.
- The calculation begins from 1 June 2026 onward, or from the issuance date of subsequent passes with the same employer.
- The 10-year clock resets when:
- The expatriate changes employer
- The EP category changes (new pass issuance date applies)
- The job position changes (new pass issuance date applies)
Promotions or role changes may trigger a reset of the employment duration.
Succession Plan Requirements
A succession plan is now a formal requirement for EP II and EP III categories and is defined as a structured approach for transitioning roles to Malaysian employees. It must include:
- Identification of roles to be localized
- Training and mentorship plans
- Timelines for skills readiness
- Measures to ensure operational continuity
Authorities have not yet specified when succession plans must be submitted.
Key Policy Changes
1. Removal of MOHA Approval for EP III
MOHA pre‑approval for EP III is no longer required under the revised policy.
2. Dependents Allowed for EP III Starting 1 June 2026
- EP III pass holders with applications submitted on or after 1 June 2026 may bring dependents.
- EP III holders whose passes were issued before this date remain under the old restrictions.
3. Cooling-Off Period (COP) Removed
The cooling-off period for EP III applications is eliminated under the new policy.
4. No Change to:
- i-KAD issuance requirements
- Number of domestic helpers
- Xpats Gateway support letter duration
- Renewal documentation requirements
Renewal and Existing Pass Holders
Existing EP holders do not need to reapply solely because the policy has changed.
However:
- Renewal applications submitted after 1 June 2026 must comply with the new salary thresholds.
- Renewals may be filed up to three months before pass expiry.
Sector‑Specific Guidance for EP III
Manufacturing and Manufacturing‑Related Services (MRS) follow sector‑specific salary requirements, and companies must hold:
- A Manufacturing License or Exemption, or
- Approved incentive/status/grant documentation under MIDA
Erickson Insights & Analysis
Erickson Immigration Group will continue to monitor developments and share updates as more news is available. Please contact your employer or EIG attorney if you have questions about anything we’re reporting above or case-specific questions.