M'sia to double expats' salary threshold from June 2026, competing with S'pore & Hong Kong

Malaysia will double the salary threshold of its expatriates from June 2026 to S$6,353.

According to The Star, the Malaysia Home Ministry announced on Jan. 14 that the move aims to prioritise local talent for job vacancies and reduce reliance on foreign labour.

The revised threshold, which covers three foreign employee salary categories, also aligns with Singapore's benchmark and is expected to boost skill transfer and more, an economist told Nikkei Asia.

Minimum salary increased, fixed employment duration introduced

The framework, which consists of Category I, II and III, will also come with fixed employment durations.

Expatriates currently do not have a limit to their employment duration.

The ministry said the new fixed duration aims to "recognise expatriates with high-level expertise and provide guidance for employers in developing more structured succession plans involving the local workforce."

For Category I, the ministry said that the minimum salary will be raised from RM10,000 (S$3,176) to RM20,000 (S$6,353), with a maximum employment duration of 10 years.

For Category II, the salary range will be revised from the current maximum of RM9,999 (S$3,176) to up to RM19,999 (S$6,352), also with a maximum employment duration of 10 years.

In addition, this category will require a succession plan.

The salary range for Category III will increase from the current maximum of RM4,999 (S$1,587) to up to RM9,999 (S$3,176).

Employment under Category III will be limited to five years and will also be subject to succession planning requirements.

Expatriates in the manufacturing sector and manufacturing-related services will see a salary range of RM7,000 (S$2,223) to RM9,999 (S$3,176).

New threshold aligns with Singapore benchmark, but uncertain if sustainable

The updated policy "aligns with benchmarks in Singapore and Hong Kong", as economist Anthony Dass highlighted in an interview with Nikkei Asia.

However, he also questioned whether Malaysia has an ecosystem "mature enough" to attract talent earning at least RM20,000 per month.

Dass noted that could affect multinationals' investment decisions, especially in research and development, strategy, and digital transformation.

"The new policy could promote a transfer of skills, accelerate localisation of mid-senior talent and raise wage benchmarks," he said.

Despite this, it might not be sustainable without complementary measures such as talent pipeline development and sector-specific exemptions.

As of November 2025, Malaysia has issued 166,980 new Employment Passes after the country drew investment in areas such as manufacturing, finance, IT and customer support centres, driven partly by its cost competitiveness as an alternative to Singapore.

Top photos via Unsplash