Can a foreign-owned Sdn Bhd hire expatriates and what company capital is expected?
Foreign staff need immigration approval, mainly an Employment Pass, through the Expatriate Services Division (ESD) and MYXpats. From 1 June 2026 the minimum basic monthly salary is RM20,000 for Category I, RM10,000 to RM19,999 for Category II and RM5,000 to RM9,999 for Category III. ESD also lists paid-up capital of RM250,000 to RM500,000, depending on foreign ownership.
Bringing in foreign staff is controlled by immigration policy, not the Companies Act.
How it works
- A company registers once with the Expatriate Services Division (ESD) at esd.imi.gov.my, then applies for each expatriate through ESD Online. Some posts need a supporting letter from an approving agency through Xpats Gateway, and the process includes Department of Labour approval under s.60K of the Employment Act 1955. MYXpats processes the passes.
- ESD's registration table lists paid-up capital of RM250,000 for a 100% locally owned company, RM350,000 for a joint venture with at least 30% foreign equity, RM500,000 for a 100% foreign-owned company and RM1,000,000 for a foreign-owned company running a wholesale, retail and trade licence. A footnote says the table does not apply to incorporated and limited companies, so ask ESD how it applies to your Sdn Bhd. These are immigration criteria, not Companies Act minimums.
Employment Pass salary tiers from 1 June 2026
Minimum basic monthly salary applies to all new and renewal applications submitted on or after that date. It excludes allowances, bonuses and salary paid outside Malaysia.
| Category | Minimum basic salary | Maximum EP duration |
|---|---|---|
| I | RM20,000 and above | Up to 10 years |
| II | RM10,000 to RM19,999 | Up to 10 years, with a succession plan |
| III | RM5,000 to RM9,999 | Up to 5 years, with a succession plan |
A succession plan becomes mandatory for Category II and III applications from 1 January 2027. Category III holders may now apply for dependants. ESD's FAQ also has a separate rule for Category III at RM7,000 to RM9,999 in manufacturing and manufacturing-related services.
Do not bring staff in on a visit pass for work, and confirm the current rules on the ESD portal before you incorporate.
Legal basis
- Revised Expatriate Salary Policy (effective 1 June 2026), Expatriate Services Division, Immigration Department of Malaysia
Sources
Applies to From 1 June 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Does a Malaysian Sdn Bhd need a resident director?Yes. A private company needs at least one director who ordinarily resides in Malaysia, meaning their principal place of residence is in Malaysia. Citizenship is not required for directors, but residence is. Alternate or substitute directors do not count towards that minimum.
- Can foreigners own 100% of a Sdn Bhd in Malaysia?Yes, in most sectors. Malaysia generally allows 100% foreign shareholding in a Sdn Bhd, with no minimum local shareholder under the Companies Act 2016. Some sectors have foreign equity limits or licence conditions, and the company still needs a resident director and a licensed Malaysian company secretary.
- Which business sectors restrict foreign ownership in Malaysia?There is no single list in the Companies Act. Restrictions come from sector regulators: for example financial services, telecommunications, energy, media, some retail formats, and certain licensed professions. Limits can be a foreign equity cap, a local partner or a licence condition. Check the regulator for your activity before incorporating.
- What is the WRT licence and do foreign-owned companies need it?WRT means wholesale and retail trade. A foreign-owned company doing distributive trade generally needs approval from the Ministry of Domestic Trade and Cost of Living (KPDN) under its foreign participation guidelines. Reported capital requirements, such as RM1 million, are described inconsistently, so confirm the current rule with KPDN.
- Does a foreign owner need a Malaysian resident director for a Sdn Bhd?Yes. At least one director must ordinarily live in Malaysia. A foreign owner living abroad therefore needs a resident director, who may be a Malaysian, permanent resident or foreigner holding a long-term pass such as an Employment Pass. A nominee takes on real legal duties, so choose carefully.