Employment Pass (EP) Malaysia: Application, Renewal, and Employer Duties

Malaysia’s business landscape is becoming more global each year.

Companies across industries are tapping into international talent to fill skill gaps and grow their businesses.

If your company plans to bring in foreign professionals, you need to know how the Employment Pass (EP) works.

This article breaks down everything you need to know about the Employment Pass, from its eligibility, requirements, steps, fees, and how to stay compliant from the employer’s perspective.

What is the Employment Pass (EP)?

The Employment Pass, commonly referred to as EP, is a work permit issued to qualified foreign professionals to work in Malaysia.

The EP is tied to a specific company and job role. Foreign employees cannot switch employers without reapplying.

The pass is granted based on the employment contract, which can be valid for up to 60 months.

Employers must first apply for approval from the Expatriate Committee (EC) or other relevant authorities, depending on the industry.

The EP is only valid in Peninsular Malaysia.

Categories of Employment Pass

Malaysia has three EP categories, based on the salary range and job level:

EP Category	Salary Range	Contract Duration	Renewal	Can Bring Dependents?	Typical Roles
Category I	RM10,000 and above	Up to 5 years	Yes (renewable every 5 years)	Yes (can also hire a domestic helper)	CEOs, COOs, Managing Directors, Senior Partners
Category II	RM5,000 to RM9,999	Up to 2 years	Yes (renewable every 2 years)	Yes (can also hire a domestic helper)	Managers, Lecturers, Directors, Architects
Category III	RM3,000 to RM4,999	Up to 12 months	Yes (renewable up to 2 times only)	No (cannot bring dependents or hire a domestic helper)	Technicians, Designers, Skilled Craftsmen

Who is Eligible for the EP?

To qualify for the Employment Pass, the foreign employee must meet these basic criteria:

Degree holders must have at least 3 years of relevant working experience.
Diploma holders need at least 5 years of related experience.
Technical certificate holders must show 7 years of hands-on experience in their field.
The job offered must also be at a managerial, executive, or technical level. In simple words, the position should require specific knowledge or skills, not general work that can easily be filled locally.

In addition to qualifications, the salary and contract period are important because they decide which EP Category the worker fits into:

Category I: Minimum salary RM10,000/month, contract up to 5 years.
Category II: Salary between RM5,000 to RM9,999/month, contract up to 2 years.
Category III: Salary between RM3,000 to RM4,999/month, contract up to 12 months.

Employers must also remember that foreign workers cannot be hired for jobs in restricted sectors.

These restricted sectors include jobs like mini market operations, small retail shops, 24-hour convenience stores, fuel stations without convenience stores, and non-exclusive restaurants.

How is the Employment Pass Different from Other Passes?

Some employers confuse the Employment Pass (EP) with other types of work permits. Here’s a simple way to see the difference:

Type of Pass	Purpose	Main Features
Employment Pass (EP)	For long-term professional or managerial roles	Can be valid for up to 5 years (depending on salary and job). Workers are employed by a Malaysian company.
Professional Visit Pass (PVP)	For short-term assignments or training	Valid for up to 12 months. The worker is paid by the foreign company, not by a Malaysian company. No dependents allowed.
Temporary Employment Pass (TEP)	For low to semi-skilled workers	Typically for jobs in manufacturing, construction, plantation, agriculture, or services sectors. Lower salary brackets.

In short, the Employment Pass is for professional-level full employment, not short training or low-skilled jobs.

Employer Eligibility and Requirements

Not all companies can apply for an EP. Your business must meet these key requirements:

Paid-up capital:
- RM250,000 (100% local ownership)
- RM350,000 (joint venture, with minimum 30% foreign shareholding)
- RM500,000 (100% foreign ownership)
- RM1 million (foreign equity 51% and above in the Wholesale, Retail, and Trade sector)
Your business must be registered with the Companies Commission of Malaysia (SSM).
Depending on your industry, you may also need a license from agencies like MIDA, MDEC, or BNM.
You must apply through the Expatriate Services Division (ESD).

Steps to Apply for an Employment Pass in Malaysia

When your company wants to hire a foreign professional, the Employment Pass application process follows several important steps.

Each step must be handled properly to avoid delays or rejection.

1. Company Registration with Expatriate Services Division (ESD)

Before hiring any foreign worker, your company must first register with the Expatriate Services Division (ESD) under the Immigration Department.

This step is to verify that your business meets all the basic requirements, such as the paid-up capital amount and a valid SSM registration.

You will need to submit your company profile and related documents through the ESD online portal.

Once approved, your company will be given access to submit EP applications.

2. Submit Supporting Documents

When applying for an EP for your foreign employee, you must submit a full set of documents.

These usually include the employee’s passport, CV, academic certificates, employment contract, offer letter, and your company's SSM documents.

Some industries may also require an approval letter from a sector-specific authority such as MIDA, MDEC, or BNM.

3. Approval from Relevant Authorities (if required)

Certain industries need additional approval before proceeding.

For example, companies in manufacturing may need MIDA’s support, while financial sector companies will go through BNM.

This step helps the government control which sectors bring in foreign talent and protects local job opportunities.

4. Submit Employment Pass Application via ESD or MYXpats

After obtaining all necessary approvals, you can formally submit the EP application through the ESD system or through the MYXpats Centre (for specific industries like digital technology).

The system will require you to upload the employee’s personal documents, job offer details, and company information.

5. Issuance and Collection of Employment Pass

Once the EP application is approved, a Visa With Reference (VDR) is issued for the foreign employee to enter Malaysia.

After arrival, the employee must go for medical screening (if required) and submit their passport to the Immigration Department within 30 days.

The EP sticker will then be stamped inside the passport, officially allowing them to work in Malaysia.

Required Documents for EP Application

For a smooth application, the following documents are typically needed:

A copy of the foreign employee’s full passport (all pages).
A recent passport-sized photo with a blue background.
Latest resume showing relevant working experience.
Academic certificates (translated into English and certified).
Signed employment contract and offer letter.
The company’s SSM registration documents and business profile.
Any required license or approval letter from authorities (depending on your sector).
Proof of insurance coverage for the foreign employee.

Having these documents properly prepared will reduce the risk of delays.

When will Imigration approve EP?

On average, a complete Employment Pass application takes about 5 to 10 working days for the Immigration Department to process, after all documents are submitted.

However, if supporting approvals from sector agencies are needed, the full process, from ESD registration to visa endorsement, can take 2 to 3 months.

Employers can track the status of the application through the ESD online system.

Duration and Renewal of Employment Pass

The validity period of an EP depends on the category:

Category I: Up to 5 years, renewable every 5 years.
Category II: Up to 2 years, renewable every 2 years.
Category III: Up to 12 months, renewable only twice.

To extend the EP, you must submit a renewal application at least 3 months before the current pass expires. Renewals require updated documents such as:

A copy of the applicant's passport (all pages)
A recent passport photo with a blue background
A copy of the applicant's latest employment contract (signed and duty-stamped by the Inland Revenue Board)
3 months' latest payslips
Latest income tax filing documents
The latest version of their resume

But if the EP expires without renewal, the employee will have to leave Malaysia and restart the application process from their home country.

Cost of Employment Pass Application

Employers need to prepare for these costs when hiring foreign talent under an EP:

Government Immigration Fee (depending on EP category): RM300–RM500
Visa Fee: RM200–RM300 (depending on nationality)
Security Bond: RM1,500–RM7,500 (varies by country of the employee)
Medical Check (FOMEMA): around RM200
Service Fees (if using a consultant or agency): RM5,000–RM8,000

In total, the full process may cost somewhere between RM9,000 to RM10,500, depending on your company’s needs and whether you are managing the application yourself or through an agency.

These numbers are only an estimation. Please confirm again with the respective element to avoid miscalculations.

EP Rejection and Appeal Process

Not every Employment Pass (EP) application is approved on the first try. Sometimes, even small mistakes can cause a rejection.

Here are the most common reasons why an EP application gets rejected:

The documents submitted are incomplete, outdated, or wrong.
The foreign employee’s job title, role, or salary does not match the EP requirements set by the government.
The employer does not meet the necessary conditions, such as minimum paid-up capital, licensing, or company registration requirements under the Expatriate Services Division (ESD).

If your EP application is rejected, you can file an appeal.

Appealing gives you a second chance to correct the mistakes or provide stronger support for why the foreign employee is important to your business.

Appeals must be submitted through the ESD portal.

It is important to act quickly because appeal cases do not have a fixed processing timeline, and the sooner you send in a complete and strong appeal, the better your chances.

What Documents are Needed for an EP Appeal?

When appealing, you need to submit additional documents to strengthen your case. These usually include:

A formal appeal letter explaining clearly why the EP should be approved. The letter should point out the business need, the employee’s importance, and any mistakes in the original application.
Any missing documents that caused the first rejection (such as an updated company license, WRT license, or corrected employment contract).
Stronger justification documents showing why the position cannot be filled by a local employee (such as recruitment ads, rejection letters from Malaysian candidates, or proof of the skill shortage).
Updated or corrected copies of the employee’s qualifications, resume, job description, or employment contract if needed.
Any support letters from approving bodies (such as MIDA, MDEC, BNM, etc.) if required.

It is best to double-check all information before resubmitting the appeal.

Mistakes or incomplete details during the appeal may result in another rejection, and it becomes harder to get another chance after that.

Legal Obligations for Employers

Once your company successfully hires a foreign worker under an EP, there are important legal responsibilities you must follow to stay compliant:

Reporting Changes

If there are any changes to the employee’s job title, department, or if they resign, you must immediately report the change to the Immigration Department.

Any movement without reporting could cause future problems for both your company and the employee.

Foreign Worker Insurance and Tax Contributions

Employers must register foreign employees under the correct insurance programs and make PCB (Potongan Cukai Berjadual) monthly tax deductions to LHDN (Inland Revenue Board). This is the employer’s duty and is not optional.

EP Cancellation

If the employee’s contract ends early, if they resign, or if the company closes down, you must cancel their EP properly.

Cancelling the pass will help avoid future legal issues and clean up immigration records.

Fulfilling these obligations is crucial. If your company does not manage this properly, it may impact your future ability to hire foreign employees.

Frequently Asked Questions (FAQ)

Can EP holders bring dependents?

Yes, but only if the EP holder is under Category I or Category II.

If your foreign employee earns more than RM5,000 per month and holds a valid EP, they can apply to bring their legal spouse, children under 21 years old, or dependent parents to Malaysia. The dependents will either get a Dependent Pass or a Long-Term Social Visit Pass, depending on their relationship with the EP holder.

However, EP Category III holders are not eligible to bring dependents. They must live and work in Malaysia without family members joining them.

What is the minimum salary requirement?

The salary requirement depends on the EP category:

EP Category I: RM10,000 per month and above.
EP Category II: RM5,000 to RM9,999 per month.
EP Category III: RM3,000 to RM4,999 per month.

Employers need to offer the correct salary according to the EP category, because the Immigration Department is very strict about this rule. Salary is also a reflection of the skill and seniority level of the foreign talent you are hiring.

What’s the difference between Category I, II, and III?

The main differences are in salary, contract period, and privileges:

Category I is for top executives like CEOs or Managing Directors. Their EP can last up to 5 years, renewable. They can bring dependents and hire a domestic helper.
Category II is for professional and managerial roles such as lecturers, architects, or senior managers. The EP is valid for up to 2 years, renewable. They can also bring dependents and hire a domestic helper.
Category III is for technical or skilled workers like designers, technicians, or craftsmen. The EP is valid for up to 12 months and can only be renewed twice. They cannot bring dependents or hire a domestic helper.

Each category fits a different type of role, so employers must categorize the application correctly.

Can EP holders work part-time or freelance?

No, Employment Pass holders are only allowed to work for the company listed in their EP. They cannot freelance, take side jobs, or work for other companies without first cancelling their existing EP and applying for a new one through the correct channel.

If the EP holder moves to a new employer without following the procedure, it can cause serious immigration issues, not just for the employee, but also for your company.

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