Malaysia's 2026 Expatriation Policy Reform: Minimum Salaries and the Employment Pass

Starting 1 June 2026, Malaysia is significantly tightening access to skilled foreign employment. The most visible change concerns the Employment Pass Category I, whose required minimum salary rises from RM10,000 to RM20,000 per month.

This increase is not a mere accounting adjustment: it reflects a will to reserve the most strategic positions for high-value profiles, while pushing companies to structure succession plans and better prepare the upskilling of local talent. For French expatriates already settled, the reform reshapes renewal decisions, internal mobility and salary negotiation. For those considering a professional relocation, it also changes the way to enter the Malaysian market, especially in sectors where competition between foreign and local profiles is already intense.

The measure is part of a broader rebalancing logic. On one hand, Malaysia remains attractive for multinationals, regional headquarters, tech, finance and engineering. On the other, the government wants to avoid a massive reliance on low-cost foreign labour weighing on local wages. The message is clear: professional expatriation remains possible, but it must now fit within a logic of skills transfer, responsibility and selectivity. In this context, understanding your category, anticipating your duration cap and preparing a solid file becomes essential, especially for French executives already juggling housing, banking, taxation and schooling for their children.

This guide walks through what changed, category by category, what it means in practice for a French professional already on an Employment Pass or about to apply for one, and the concrete steps to take before a renewal deadline turns into a last-minute scramble.

01Malaysia's 2026 expatriation policy reform: what the minimum salary increase reveals

At the heart of the reform lies a strong economic signal: the salary thresholds linked to the Employment Pass are raised across all categories, with a particularly sharp jump for Category I. This change follows a simple logic, often summarised by the Malaysian authorities themselves: if the salary offered to an expatriate is too low, it can drag down market benchmarks and undermine the progression of local employees. The reform does not aim to close the door to foreign professionals, but to raise the entry level so that their presence genuinely reinforces the local economy rather than competing with it on cost alone.

For companies sponsoring an Employment Pass, this means reviewing compensation packages more carefully before filing an application. For candidates, it means that Malaysia is no longer positioning itself as a low-cost destination for foreign talent, but as a market that expects a genuine premium in exchange for the mobility of an expatriate profile.

This shift also mirrors a regional trend: several Southeast Asian economies have been recalibrating their skilled-migration frameworks over the past two years, tightening entry criteria while trying to remain competitive for regional headquarters and specialised functions. Malaysia's approach fits this pattern rather than standing apart from it, which suggests the direction of travel — higher thresholds, clearer succession expectations — is unlikely to reverse in the near term.

Employers themselves are adjusting internal policy in response. Multinationals with a Malaysian entity are reviewing standard expatriate packages to make sure new hires and transfers automatically clear the relevant threshold, rather than discovering a shortfall once the paperwork is already underway. Smaller companies sponsoring their first foreign hire face a steeper learning curve, since they may not have budgeted for the higher salary floor when planning the role.

03Employment Pass Categories II and III: what changes for French managers and specialists

The reform does not only concern Category I. Categories II and III are also more strictly framed, with limited employment durations and more explicit expectations regarding succession. For French mid-career managers, this is often where the practical impact is felt most. Many arrive in Malaysia as specialists, operational managers or senior consultants, without necessarily reaching Category I compensation levels. From now on, the administrative reading becomes stricter: salary must match the category, and the category must match the actual seniority of the role.

In practice, this means some profiles that used to fit comfortably in Category II may need to be reassessed, either through a salary adjustment or a redefinition of the role's scope of responsibility.

For Category III specifically, the shorter employment window makes it more of a transitional status than a long-term one. Employees entering Malaysia through this category should treat it as a stepping stone, using the first assignment to build the local track record and market visibility needed to later qualify for a higher category rather than assuming automatic renewal.

05Malaysia's 2026 expatriation policy reform: minimum salaries and the Employment Pass

{
  "success": true,
  "base": "EUR",
  "date": "2026-01-01",
  "rates": { "MYR": 4.90 }
}

07Salaries, renegotiation and package: adapting your Employment Pass file in Malaysia

The reform pushes French expatriates to rethink salary negotiation from a more global angle. When a Malaysian company agrees to sponsor an Employment Pass, it does not only look at the base salary. It also assesses the coherence between the role, the company's structure, quota availability and its ability to justify hiring a foreigner. This is why the discussion with HR should be prepared with precision. An employee who arrives with a clear case, market references and a defined vision of their contribution will be better positioned to negotiate a package that meets the new thresholds.

It is also worth discussing non-salary elements — housing allowance, relocation support, schooling — as part of the overall package, since some of these can help make a borderline case more solid.

A useful practical step is to request, in writing, the exact category the employer intends to sponsor before signing anything. This protects both parties: it prevents a mismatch being discovered only once the file is already submitted to the authorities, which can otherwise delay the start date by several weeks.

09Checking your current category and preparing the transition with HR

The first step for any French expatriate is to verify their current Employment Pass category. Many employees only have a rough understanding of their visa, without clearly distinguishing the category, the remaining duration or the renewal conditions. This imprecision can become costly once a reform takes effect. It is therefore worth re-reading the documents provided by the employer, checking the category stated on the authorisation, identifying the expiry date and comparing the current salary with the new thresholds.

This basic check avoids unpleasant surprises and gives both employee and employer enough lead time to adjust the file calmly rather than under pressure close to the renewal date.

It is also a good moment to keep a personal folder of every document related to the Employment Pass — offer letter, approval notice, renewal correspondence — rather than relying solely on the employer's HR archive. Should a change of employer or a dispute arise, having an independent, complete record considerably speeds up any new application.