New Expatriate Hiring Policy Mandates Local Internship Placements

Santa Fe publication date

15 February 2025

Overview

The Malaysian Human Resources Ministry has introduced a progressive policy aimed at strengthening local talent development while aligning expatriate hiring with local workforce needs. Effective February 15, 2025, companies hiring expatriates must also provide internship opportunities for local students under the 1:3 Practical Training Policy.

Who will be affected?

The policy applies to every company that have been granted approval for expatriate Employment Passes (EP) under the Malaysia Expatriate Services Centre (MYXpats) and the Malaysia Digital Economy Corporation (MDEC). Expatriate EP here refers to all categories – Employment Pass Category 1 (EPI), Employment Pass Category 2 (EPII), and Employment Pass Category 3 (EPIII).

Background

This policy, managed by Talent Corporation Malaysia Berhad (TalentCorp), requires companies to provide up to three structured and paid industrial training placements for local students for each approved Expatriate Employment Pass (EP). The initiative aims to address the shortage of quality internships and prepare local students to meet the challenges of the global workforce.

Impact

• Internship Requirement: Companies must create and manage structured internship programs for local students.
• Financial Incentives: Participating companies will benefit from double tax relief on costs related to monthly allowances, training, materials, and logistics under the National Structured Internship Programme (MySIP).
• Workforce Size Consideration: Adjustments to the 1:3 ratio will account for the organization’s size and workforce capacity.

Date of implementation

The pilot phase starts on 15th February 2025, with full implementation from 1st January 2026. TalentCorp will oversee internship placements and provide resources for matching and placement through its Ilham Kesuma platform.
However, the pilot implementation of the Policy will only focus on MYXpats registered companies in Tier 1 and Tier 2 categories (EPI and EPII), which mainly consist of multinational companies, Government-related companies, and conglomerates.

Santa Fe recommendation

According to the policy, it will only be put into effect after the completion of the employment pass approval process and will not interfere with any current approval processes. However, companies are advised to plan ahead by assessing their organization’s capacity to accommodate internships, leverage the MySIP double tax relief incentives to offset costs, engage with TalentCorp through the Ilham Kesuma platform to streamline internship placements and access a pool of local talent, and update their internal policies and workforce planning to align with the new requirements.

Contact us

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

Samson Poore
Immigration Manager — Malaysia
Santa Fe Relocation
samson.poore@santaferelo.com

Paolo Longo
Regional Immigration Director
Santa Fe Relocation
paolo.longo@santaferelo.com

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