Corporate Immigration update — Malaysia – 1:3 Internship Policy & MySIP

Malaysia – 1:3 Internship Policy & MySIP

08 December 2025

Overview

The Malaysian Government, through the Ministry of Human Resources (KESUMA) and TalentCorp, has introduced the 1:3 Internship Policy to increase structured, paid internship opportunities for Malaysian students. Companies hiring expatriates will be required to offer internships according to a defined ratio, and these internships must be registered under MySIP (National Structured Internship Programme).

MySIP is Malaysia’s national structured internship scheme endorsed by TalentCorp, designed to provide meaningful, paid internships for students while helping companies comply with the 1:3 Internship Policy.

Key Requirements for Employers:

• Internships must be at least 10 weeks long
• Monthly allowance: RM600 (Bachelor’s & above), RM500 (Diploma/ SKM Levels 1–3)
• Structured programme with defined learning outcomes
• Interns must be registered and endorsed via MyNext
• Internships can be posted on MyNext or hired directly and later declared

Benefits for Employers:

• Double tax deduction on eligible internship expenses
• Early access to potential future talent
• Streamlined and cost-effective compliance with the 1:3 policy

Who will be affected?

The policy applies to companies employing expatriates under:

• EP Category I → 1 expatriate : 3 interns
• EP Category II → 1 expatriate : 2 interns
• EP Category III → 1 expatriate : 1 intern

Important:
If the number of interns required exceeds 2% of the company’s total Malaysian workforce, the internship requirement will be capped at 2%.
Whichever number is lower (EP ratio or 2% cap) will be the official obligation.

Example:
If a company has 500 employees → 2% = 10 interns
Even if EP ratios require 20 interns, the maximum required is still 10.

Exemptions may apply to newly established companies (<2 years), representative/regional offices, and certain tax-exempt entities as outlined by TalentCorp.

Background

Malaysia produces over 250,000–280,000 students annually who require internships or work-based learning.
The 1:3 Internship Policy — together with MySIP — aims to:

• Increase meaningful, structured internship opportunities
• Align student skills with industry needs
• Encourage companies hiring expatriates to help build Malaysia’s local talent pipeline
• Strengthen future workforce sustainability and reduce over-reliance on foreign expertise

Impact

Operational Impact

• Companies must plan internship recruitment to meet the ratio or 2% cap.
• Internships must meet MySIP criteria and be registered in MyNext.

Cost Impact

• Allowance must be paid to interns.
• Double tax deduction helps reduce overall cost.

Compliance Impact

• Internship placements become a required component of expatriate hiring.
• Proper tracking and reporting through MyNext is essential.

Date of implementation

1 January 2026

Santa Fe recommendation

Santa Fe advises all clients to:

1. Evaluate current expatriate headcount and calculate required internship quota using both EP ratios and the 2% workforce cap.
2. Register or confirm registration on MyNext/MySIP early to avoid delays.
3. Develop a simple, structured internship framework (job scope, supervision, learning plan).
4. Budget for intern allowances while leveraging double tax deductions.
5. Begin internship recruitment during the pilot phase to ensure compliance before full enforcement.
6. Monitor ongoing TalentCorp updates as refinements may occur in 2025.

For further details:

• Click here to access the Company User Guide
• Click here to access the User Guide for 1:3 Policy
• Visit MyNext website for more information: https://www.mynext.my/

Contact us

Please get in touch with us for further information or clarification:

Samson Poore
Immigration Manager — Malaysia
Santa Fe Relocation
+60 19 601 6900
samson.poore@santaferelo.com

Hema Jesani
Senior Manager Global Immigration
Santa Fe Relocation
Hema.Jesani@SantaFeRelo.com

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