With a relatively lower cost of living and availability of modern infrastructures, Malaysia has become a viable location for some expatriates to relocate to. In fact, Malaysia was even ranked eighth in the InterNations’ Expat City Ranking in 2023, with many expatriates having expressed satisfaction with the general cost of living and fulfilling social lives here.
There are various opportunities for expatriates to tap into in Malaysia as well. While the government is working on increasing more skilled workers in the country, some sectors still require the expertise of expatriates, especially in high growth sectors such as data science, information technology and renewable energy.
Expatriates with such expertise can get employed with rewarding remunerations and benefits and are able to afford living in Malaysia. For example, popular expat enclaves in Kuala Lumpur such as Mont Kiara and Jalan Ampang are some of the most affluent neighbourhoods in the city with international communities, facilities and schools.
Getting An Employment Pass
To work in Malaysia legally, your employer will need to apply for an employment pass for you with the Malaysia Expatriate Services Centre Sdn Bhd (MYXpats Centre).
You will need to fulfil certain requirements such as meeting the minimum salary threshold to qualify for the pass.
There are two tiers to the employment pass for expatriates as shown below.
- Employment Pass (Category 1) – You must have a minimum basic salary of RM10,000 per month
- Employment Pass (Category 2) – You must have a minimum basic salary of RM5,000 to RM9,999 per month
For Employment Pass (Category 1), expatriates can sign a longer work contract for up to five years. Holders of Employment Pass (Category 2) can be in contract for employment for up to two years only. Both passes are renewable and eligible for dependent passes.
It may be useful to note that preference will be given to foreign talent employed in industries highlighted as National Key Economic Areas (NKEAs) in the Economic Transformation Programme of Malaysia which are oil, gas and energy, financial services, business services, healthcare, education, tourism, communication, agriculture, palm oil, wholesale and retail and electronics and electrical.
You can check the Expatriate Service Division (ESD)’s website for the list of documents required for the pass application.
The application for employment passes is expected to take around five working days. Should your pass be approved, an approval letter which is available for download online will need to be printed out and be endorsed at the Kuala Lumpur International Airport (KLIA) within 30 days you’re in Malaysia.
If your family is coming along, you will also need to apply for dependent passes and provide required documents. Dependent passes will take a longer processing time of 14 working days.
Finding A Place To Stay
As an expatriate living in Malaysia for the first time, you would probably need time to get acclimated to the country and are more inclined to start by renting a property. There are various properties that you can rent from landed residences to studios, condominiums and serviced residences.
You can check popular property sites such as PropertyGuru and iProperty for houses that are available for rent and their rental rates. Depending on your budget and needs, you can choose a property to rent.
For example, you may want to choose a property that is nearer to your workplace. Typically, the nearer the property is to Kuala Lumpur city centre, the more expensive the rental costs are. If you’re planning to get a car and drive around, you can stay further from the city center. There are several neighbourhoods in Kuala Lumpur such as Mont Kiara and Bangsar that are known for its international communities where you and your families can fit in easier.
Read Also: Ampang, Batu, Cheras, Setapak: How Much Does It Cost To Rent In Different Districts In KL
Accessing Healthcare Services
There are various public and private hospitals that you can access for healthcare treatments in Malaysia. Public hospitals are heavily subsidised by the government, so the fees and costs are significantly cheaper compared to private hospitals. Expatriates can get healthcare treatments at public hospitals, but you will need to pay a higher fee than locals.
As a working expatriate, you’re also eligible to Social Security Organisation (SOCSO) contributions and receive protection from employment injuries or occupational diseases.
You may also be given a medical card from your company as part of your employment benefits. You can check the coverage and if you require more comprehensive protection, you can consider getting health protection from insurance companies. You can also look into international health insurance, especially if you travel between different countries more often.
Opening A Bank Account
One of the first things you need to do after arriving in Malaysia is setting up a bank account so you can perform basic transactions, money transfers and receive your salary.
Each bank may have their own requirements but generally as an expatriate, you will probably need to furnish documents such as your passport, work permit, employment letter and such.
Most banks offer overseas transfer services and you can also rely on Wise to send money overseas.
Paying Taxes On Your Income
In Malaysia, liability to pay tax on your income hinges on your residency status. Residency status is determined by the duration of your being physically present in the country and not your citizenship or nationality.
This means that you are considered as a resident if the following situations apply to you.
- Stayed in Malaysia for 182 days or more of a tax year
- Stayed in Malaysia for less than 182 days of a tax year but linked by a period of more than 182 consecutive days from year immediately preceding or following the tax year
- Stayed in Malaysia for at least 90 days of the current tax year and was a resident in Malaysia for at least 90 days in three of the four preceding years
- Will be a resident in Malaysia in the year following and has been a resident in Malaysia in the three years preceding the one being taxed
If you’re in any of the mentioned situation above, you’re considered a resident and will have to pay progressive tax rates of up to 30% on your employment income. This is the same tax rate that locals residing in Malaysia pay.
On the other hand, non-residents pay a flat rate of 30% on their income and are not allowed to make claims. However, non-residents who are only employed in Malaysia for less than 60 days are not taxable.
To attract more skilled expatriates to Malaysia, the government does offer special tax incentives for those who are eligible. For example, foreign knowledge workers residing in the Iskandar Development Region who fulfil all conditions are eligible to enjoy a reduced tax rate of 15%.
Schooling For Your Children
Malaysia offers students of different ages various international schooling options that are based on the British curriculum, American, curriculum, Australian curriculum and the Swiss International Baccalaureate (IB).
Holders of dependent passes below the age of 18 do not need to separately apply for a student pass to study in Malaysia. For dependents aged above 18 years ole, they will need to convert their dependent pass to student pass.
Expats can send their children to public schools. Most public schools use the Malay language to teach but there are some vernacular schools that teach in the Chinese and Tamil languages. Public schools are heavily subsidised by the government so the fees are significantly cheaper than private institutions.
Getting Around Within The Country
There are several ways to get around in Malaysia but the most common way is still by driving. As public transportation is not accessible in all areas in Malaysia, many people still rely on cars to get around. Car ownership is high in Malaysia, with total vehicles outnumbering the population. This may be due to the lack of public transportation and cheap petrol and vehicle prices in Malaysia. Alternatively, you can also subscribe to ride hailing services such as Grab, which is prevalent in popular cities in the country to get around.
If you want to drive in Malaysia, you will need to get a Malaysian driving license. You can do so by registering with a valid driving institute in Malaysia and take a driving test.
Read Also: Fuel Prices In Malaysia: What’s The Difference Between RON95, RON97 And RON100
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