Malaysia tightens visa requirements to limit foreign workers by 2035
To boost local employment, the government has announced new steps that include higher salary thresholds for visa applications and limited stays, even for high-income migrants. But without investment in training, Malaysia risks only a shortage of skilled labour and rising costs.
Kuala Lumpur (AsiaNews/Agencies) – Malaysia wants to significantly reduce its dependence on foreign labour. To this end, it has decided to introduce new restrictions that could reshape the country’s entire economic system.
According to the government led by Prime Minister Anwar Ibrahim, starting in June, the minimum salary threshold for obtaining a work visa will be increased.
For some categories, it will rise from 10,000 to 20,000 ringgit per month (approximately US$ 2,500 to US$ 5,000), while other categories will see increases from 5,000 to 10,000 ringgit and from 3,000 to 5,000 ringgit.
At the same time, employers will only be able to sponsor the same foreign worker for a limited period, between five and ten years, depending on the type of permit.
This restriction is part of the government's strategy to reduce the share of foreign workers from 14.1 per cent (2024) to 5 per cent by 2035. The stated goal is to encourage employment for Malaysian citizens and raise average wages, which currently hover around US$ 700 per month.
Malaysia is home to approximately 2.1 million registered foreign workers employed in low-wage jobs, often earning little more than the minimum wage of 1,700 ringgit (about US$ 430 per month).
Alongside these, the country also employs approximately 140,000 highly skilled workers in the financial, technology, semiconductor, and energy sectors.
According to data from the Home Affairs Ministry, this group of high-income expatriates contributes significantly to the national economy, with approximately 75 billion ringgit (US$ 19 billion) inflows annually and approximately 100 million ringgit (US$ 25 million) in taxes.
According to the government, reliance on low-skilled foreign labour has slowed technological innovation and productivity growth, generating "wage distortions" and a labour market dominated by low-value-added jobs.
The new restrictions not only affect lower-skilled workers but also higher-wage expatriates, with the aim – according to the authorities – of ensuring that their employment “genuinely complements" and fosters the development of local skills.
Companies, in addition to risking doubling costs due to rising wages, will also have to plan to replace foreign workers with local staff at the end of their stay, a process that will require further investment in training and skills development.
For Malaysia, the main challenge remains developing an adequate workforce. Economic analysts believe that without strengthening the education and vocational training system, the reduction in expatriates risks resulting in a shortage of skilled workers rather than a real increase in domestic employment.
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09/05/2024 17:38
