If you are working from an Employment Pass guide written before the middle of 2026, some of it is now wrong.
The Expatriate Services Division revised its expatriate salary policy with effect from 1 June 2026. The changes are not cosmetic. They alter who can bring their family, remove a route that employers had been using to get borderline applications approved, and change what happens at renewal for people already holding a pass.
Here is what an employer needs to know, and where applications actually fail.
First, a threshold question most companies skip
Before any discussion of the candidate, the question is whether your company is eligible to employ an expatriate at all.
The Expatriate Services Division sets minimum paid-up capital by ownership structure:
| Ownership | Minimum paid-up capital |
|---|---|
| 100 percent locally owned | RM250,000 |
| Joint venture, minimum 30 percent foreign equity | RM350,000 |
| 100 percent foreign owned | RM500,000 |
| Foreign owned at 51 percent or more, in wholesale, retail or trade | RM1,000,000 |
That last row also requires a valid WRT licence. Foreign-owned companies at 51 percent or more operating in unregulated services need separate approval from the Ministry of Domestic Trade, Co-operatives and Consumerism.
The registering entity must be formally established, through the Companies Commission of Malaysia, the Registry of Societies, or as a cooperative or association registered under Malaysian law.
This is where a surprising number of hiring plans stop. A newly incorporated company with nominal paid-up capital cannot sponsor a pass, however strong the candidate is. If your capital sits below the threshold for your ownership structure, that is the first thing to fix, and it is not a fast fix.
What actually changed on 1 June 2026
Four changes matter.
Basic salary only. The salary requirement is assessed on basic salary. Allowances and other payments do not count toward it. If your offer structure leans on allowances to reach a number, it will be assessed on the smaller figure.
The Category III minimum salary exemption is gone. Applications for exemption from the minimum salary under Category III no longer apply from 1 June 2026. Employers who had been using that route to get a borderline salary approved no longer have it.
Renewals are assessed under the new rules. Renewal applications submitted after 1 June 2026 must comply with the revised requirements. This is the change most likely to catch employers out, because it means an existing employee whose pass was fine two years ago may not renew on the same terms.
The cooling-off period no longer applies. That restriction has been removed.
One point of continuity for existing holders: Category III pass holders whose passes were issued before 1 June 2026 remain subject to the previous policy, which does not permit them to bring dependants.
Employers may apply for employment periods of up to 60 months.
On the salary thresholds themselves
The category thresholds are the figures everyone wants, and they are also the figures most likely to be quoted out of date on third-party sites.
The revised policy documentation confirms a RM7,000 to RM9,999 band applying to Category III in manufacturing and manufacturing-related services. We are not publishing a full category table here, because the complete current table is maintained by the Expatriate Services Division and is the only version worth relying on for a live application. Check it directly at the point of applying rather than trusting any guide, including this one, on the specific number.
That is not evasion. Salary policy has now changed twice in recent years, and a number in a blog post has a short shelf life. What does not change is the shape of the assessment: basic salary only, assessed against your sector and category, with your company’s eligibility checked first.
Where applications actually fail
In practice, rejections and delays cluster around a few things, and almost none of them are about the candidate being unqualified.
The salary structure. An offer built as a modest basic plus substantial allowances reads as a lower salary to the assessor than it does to the candidate. Structure the basic to carry the threshold.
Company eligibility, discovered late. Paid-up capital, WRT licence, or the ministry approval for foreign-owned unregulated services. All three are fixable, and none are fixable in the two weeks before a start date.
Role justification that does not hold up. The submission has to explain why this role needs an expatriate. A generic job description that any local candidate could fill invites the question.
Qualification and experience mismatch. The candidate’s qualifications and experience have to line up with the role as described. Small inconsistencies between the CV, the contract and the application create queries, and queries create weeks.
Documentation that arrives incomplete. Every query from the authority resets the clock. The single largest controllable factor in how long a pass takes is whether the first submission was complete.
What this means for your timeline
Two practical consequences.
If you are hiring an expatriate into Malaysia for the first time, the company eligibility check should happen before you make an offer, not after. Paid-up capital cannot be raised overnight and a WRT licence is not a same-week item.
If you have expatriates whose passes come up for renewal, look at them now rather than at renewal. Renewals filed after June 2026 are assessed under the revised requirements, and a salary structure that was compliant when the pass was first issued may not be compliant on renewal. Finding that out three weeks before expiry is considerably worse than finding it out now.
Where this sits in our work
People Profilers Malaysia handles work pass and immigration filings for employers hiring here, through Agensi Pekerjaan People Profilers Malaysia, our JTKSM-licensed employment agency (C No. 1432).
What we commit to is filing quality: an honest eligibility check before anything is submitted, complete documentation, and substantive responses to authority queries. Approval decisions themselves always rest with the authorities.
If you want the eligibility position checked before you make an offer, that is what our work pass and immigration service in Malaysia is for. If the conclusion is that your entity cannot sponsor the pass yet, employer of record is sometimes the bridge, though it does not by itself solve a work pass requirement for a foreign national. Our article on what it really costs to employ someone in Malaysia covers the statutory side.
Sources
Verified September 2026. Immigration policy changes, so confirm against the Expatriate Services Division before relying on any of it for a live application.
- Revised Employment Pass salary policy effective 1 June 2026, including basic-salary-only assessment, removal of the Category III minimum salary exemption, renewal treatment, dependant position for pre-June 2026 Category III holders, removal of the cooling-off period, and the 60-month maximum employment period: ESD, Revised Employment Pass Salary Policy effective 1 June 2026 and the linked Revised Expatriate Salary Policy FAQ
- Minimum paid-up capital by ownership structure, WRT licence requirement, ministry approval for foreign-owned unregulated services, and eligible registering entity types: ESD Online Guidebook
