Malaysia doubles minimum salary requirement for expats in 2026

From 1 June 2026, hiring an expat will become more expensive. Malaysia's government is raising the minimum monthly salary thresholds for foreign talent, as well as for lower-skilled expats. Additional measures also redefine the maximum length of stay and how companies manage the balance between foreign and local payrolls.

Changes to minimum salary requirements

Category I work permit (management and senior leadership roles): the minimum salary will increase from 10,000 to 20,000 Malaysian ringgit (RM) (from US$2,465 to US$5,086).

Category II work permit (mid-skilled workers): the threshold will rise from roughly RM 5,000–9,999 to RM 10,000–19,999.

Category III work permit (low-skilled workers): the minimum will increase from RM 3,000–4,999 to RM 5,000–9,999 per month. For expatriates working in the industrial sector, the monthly minimum will be raised to at least RM 7,000.

Length of stay for foreign workers

Expats holding Category I and II permits will be allowed to work in Malaysia for a maximum of 10 years. For Category III, the maximum length of stay will be limited to 5 years.

Job localization, or the “succession system”

Category II and III work permits were designed to encourage positions to eventually be taken over by Malaysian employees. In practical terms, a job held by a Category II or III expatriate should be able to be transferred to a local worker. Training programmes will be put in place to support this transition.

Dependents

All three visa categories will allow sponsorship of dependents, meaning expatriates will be able to bring their families to Malaysia.

A reform that is sparking debate

For the government, this is about updating a system that has not been reformed since 2017. It is also part of a broader effort to reduce the country's reliance on foreign labor. In October 2025, Malaysia had around 2.13 million foreign workers. However, critics argue that the reform moves Malaysia closer to Singapore, which is known for its strict rules. They also fear that higher salary thresholds could make it harder for companies to recruit foreign talent.

Concerns are also being voiced by local workers, who do not expect to truly “benefit” from the succession system described by the government. Some experts believe that, due to labor shortages, companies that can afford it may increasingly turn to artificial intelligence instead. They also argue that transferring skills from foreign talent to local workers will take time. In their view, the reform is being implemented too soon.