Malaysia Softens Blow on Employment Pass Salary Hikes: MDEC Grants Extension for GBS Sector Until 2027

Malaysia Employment Pass salary hikes: MDEC grants GBS sector extension until 2027. Category III language roles exempt from June 2026 increases. Employer guidance inside.

Kuala Lumpur, May 29, 2026 — In a welcome relief for multinational companies and foreign talent in Malaysia’s Global Business Services (GBS) sector, the Malaysia Digital Economy Corporation (MDEC) has confirmed that eligible Employment Pass Category III applications requiring native or near-native language proficiency will continue to be assessed under the current salary thresholds until June 1, 2027.

This extension comes after the Ministry of Home Affairs announced significant increases to Employment Pass (EP) salary requirements earlier this year, which were scheduled to take effect on June 1, 2026.

Original Salary Threshold Changes (Effective June 1, 2026)

The January 15, 2026 announcement raised the minimum salaries as follows:

• EP Category I: Ranging from MYR 10,000 to MYR 20,000 and higher

• EP Category II: From MYR 5,000 – 9,999 to MYR 10,000 – 19,999

• EP Category III: From MYR 3,000 – 4,999 to MYR 5,000 – 9,999

These revisions apply to all new and renewal applications filed on or after June 1, 2026, unless exempted under the new MDEC clarification.

MDEC’s Important Extension for GBS Sector

MDEC has now clarified that for roles in the Global Business Services sector that require native or near-native language proficiency, Category III applications will be assessed using the pre-June 2026 salary thresholds until June 1, 2027. This provides a full year of transitional relief for affected companies.

MDEC also stated that companies expecting significant operational impact from the revised policy can engage directly with the agency for further discussions. Any flexibility or exemptions will be assessed on a case-by-case basis and remain subject to final approval by the relevant authorities.

Why This Matters for Malaysia

Malaysia has been actively positioning itself as a regional hub for Global Business Services, shared services, and multilingual operations. Many multinational companies rely on Category III Employment Passes to hire foreign talent for roles involving customer support, content moderation, translation, and specialized communication in languages such as English, Mandarin, Tamil, Japanese, Korean, and Arabic.

The one-year extension gives companies critical breathing room to:

• Adjust compensation structures

• Review workforce planning

• Transition roles to local talent where possible

• Maintain operational continuity

Advice for Employers and Foreign Workers

Employers:

• Review all upcoming EP renewals and new hires scheduled after June 1, 2026

• Engage early with MDEC if your operations rely heavily on language-proficient Category III roles

• Update internal policies and budget forecasts to prepare for full implementation in 2027

Foreign Professionals:

• Confirm your eligibility under the transitional provisions if applying for Category III

• Work closely with your employer’s HR or mobility team

• Prepare for potential salary adjustments after June 2027

Broader Context of Malaysia’s Immigration Strategy

This adjustment reflects Malaysia’s balancing act: raising standards to protect local employment while remaining competitive in attracting skilled foreign talent. The country continues to promote itself as a business-friendly destination in Southeast Asia, particularly for companies looking to establish or expand regional headquarters and shared service centers.

The move also aligns with Malaysia’s digital economy ambitions under the Malaysia Digital Economy Blueprint, where multilingual and culturally attuned talent plays a vital role.

For the latest updates, detailed guides, application requirements, and 2026 policy analysis on Malaysia Employment Passes, Global Business Services visas, and foreign talent attraction programs, visit: visasupdate.com/news