Malaysia is a growing hub for international businesses, attracting skilled professionals from around the world. However, hiring foreign talent isn’t always straightforward—many employers struggle with strict regulations, work permits, and compliance issues.
If you’re a business looking to hire foreign employees, you may have already faced roadblocks. So, why is it so difficult to hire foreigners directly in Malaysia? And how can an Employer of Record (EOR) solve this problem?
1. The Work Visa Challenge
Hiring a foreigner in Malaysia requires the right work permit, such as the Employment Pass (EP), Temporary Employment Pass (TEP), or Professional Visit Pass (PVP). But only companies registered with Malaysia’s Expatriate Services Division (ESD) or those meeting strict financial and industry-specific criteria can apply for these permits.
If your company doesn’t qualify, you can’t legally employ foreign workers—even if you’ve found the perfect candidate.
How an EOR Helps
An EOR sponsors work visas on behalf of businesses, ensuring your foreign hires can legally work in Malaysia without your company having to go through the complex approval process.
2. Restrictions on Certain Job Categories
Malaysia prioritizes local talent, which means certain job roles are restricted for foreigners. Companies must prove that hiring a foreigner is essential for the position—often requiring extensive documentation and approval from authorities.
Even if you find an international candidate with the right skills, your company might not get the green light to hire them.
How an EOR Helps
An EOR navigates legal restrictions and works within the permitted job categories to help businesses legally employ foreign talent.
3. Payroll, Taxes & Compliance Risks
Hiring foreign employees means dealing with Malaysian tax laws, social security contributions (EPF, SOCSO, and EIS), and labor laws. Employers who mismanage these obligations risk legal penalties and financial fines.
If your company isn’t set up for foreign payroll, handling these requirements can be overwhelming.
How an EOR Helps
An EOR manages payroll, tax deductions, and statutory compliance, ensuring everything is done correctly and legally—so you don’t have to worry about it.
4. Cost & Time of Setting Up a Legal Entity
For businesses without a registered entity in Malaysia, hiring foreign talent means setting up a local company, office, and legal infrastructure—which can be costly and time-consuming.
If you’re testing the market or hiring only a few foreign employees, setting up a legal entity may not be worth the investment.
How an EOR Helps
An EOR acts as the legal employer, so your business can hire international talent quickly—without opening a local office.
Conclusion: An EOR in Malaysia Makes Hiring Foreigners Easy
If you’ve been struggling to hire foreign employees in Malaysia, you’re not alone. Work visa limitations, job category restrictions, compliance risks, and legal costs make direct hiring difficult for many businesses.
An Employer of Record (EOR) simplifies the process by handling:
Work permit sponsorship
Payroll & tax compliance
Legal employment structure
Faster onboarding & local support
Want to hire foreign talent in Malaysia without the hassle? Contact us today to explore your EOR options.
Comments