MALAYSIA – MDEC to update work permit protocols

Employers should work with BAL to strategize about when to submit applications and how to ensure they are in compliance with MDEC’s new requirements.

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IMPACT – MEDIUM

What is the change? The Malaysia Digital Economy Corporation is set to launch a new version of its eXpats system. The change will affect processing times, fees and payment methods.

What does the change mean? Employers should take note not only of the pending changes, but also of the deadlines for filing applications in the current system before the new system is launched. Employers who miss the deadlines (described below) will have to resubmit applications once the new system is implemented.

  • Implementation time frame: Between now and Nov. 15.
  • Visas/permits affected: Employment passes, dependent passes, social visit passes.
  • Who is affected: Companies in the MSC and ICT categories.
  • Impact on processing times: The new system should improve end-to-end processing times, though delays are likely as the system is rolled out. This is especially true for employers who miss the transition-period filing cutoffs.

Key information: The Nov. 15 changes will include the implementation of a new online portal, new processing times, an updated fee structure and a change in acceptable forms of payment.

  • New online portal: MDEC will roll out a new online portal that will be available to both MSC- and ICT-status companies. The goal with the portal is to centralize services and enhance filing and payment processes.
  • Processing times: Processing times will be updated as follows:

 

MSC Category

ICT Category

Approval – Stage 1

Endorsement –Stage 2

Approval – Stage 1

Endorsement –Stage 2

Current Processing Times

3 business days

14-21 business days

5 business days

10-14 business days

Processing Times from Nov. 15

7 business days

2 business days

7 business days

2 business days

 

The processing times will apply to both new applications and renewals. Applications involving a change in employers will probably take longer because they involve additional requirements, including post-dated permit cancellation, no-objection letters and income-tax clearance. Processing will be delayed if applications are not completed properly.

  • Fee structure: MDEC will revise its fee structure as follows:

Permit Category/Service

Fees (inclusive of 6 percent goods and services tax)

MSC Category

ICT Category

Employment pass

RM 2,120

RM 2,968

Dependent pass and social visit pass

RM 530

RM 530

Amendment of approval letter

RM 106

RM 106

  • Payment process: MDEC will only accept online payments. Checks, cashier’s checks and bank drafts will no longer be accepted.

Transition planning: MDEC has set up cutoff dates by which applicants companies must submit applications in order for them to be completed in the current system. Applicants who miss the cutoff dates will be forced to wait and submit applications after the new system is implemented. Cutoff dates will be as follows:

  • Approval – Stage 1. Applications must be submitted on or before Nov. 10 to obtain a decision before Nov. 15, when the new system will be implemented. Applications not submitted by Nov. 10 cannot be submitted until the new system is implemented.
  • Endorsement – Stage 2. In cases where Stage 1 approvals have been issued before Nov. 15, companies will be given until Dec. 29 to continue using the current eXpat system to complete endorsement procedures (Stage 2). If endorsement procedures are not completed by Dec. 29, the Stage 1 approval will automatically be canceled and the applicant will need to start over using the new eXpats system.
  • Accessibility to the current system. Applications will not be accepted between Nov. 10 and Nov. 14, as MDEC will be working on transitioning to the new eXpats system.

BAL Analysis: Employers may wish to submit time-sensitive applications before the Nov. 10 cutoff date; however, there could be advantages to waiting to submit applications once the new system is launched. Employers should work with BAL to strategize about when to submit applications and how to ensure they are in compliance with MDEC’s new requirements.

This alert has been provided by the BAL Global Practice group and our network provider located in Malaysia. For additional information, please contact your BAL attorney.

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