But economist Geoffrey Williams, director of Williams Business Consultancy, said the claim that expatriates are taking jobs from locals is not true.
“Firstly, there are too few expatriates to make that claim meaningful. Secondly, it is already costly to pay for visas, so they are not competitive in a cost sense,” he wrote in a post on LinkedIn.
“Thirdly, expatriates are employed for very specific reasons based on experience and expertise. This will not change.”
The Malaysian Immigration Department issued 180,812 EPs – including new applications and renewals – in 2025, up from 160,380 passes in 2024. Malaysia had 17.06 million employed people in October 2025.
Williams told CNA it is not so much the comparison to regional countries that counts, but the way it has been communicated – “that Malaysia does not want expats somehow”.
These changes have sparked fears among the expatriate community of being forced to leave once their contracts end, despite past contributions to local jobs and the economy.
In its clarification document, the Home Affairs Ministry said contract extensions will be evaluated on a case-by-case basis based on “national interest”.
“Stability is also important. If it changes too much you cannot plan long-term and if the visas are short then you don’t invest or commit here,” Williams said.
“NO CHOICE BUT TO FOLLOW”
Sasha Reddy, Malaysia partner at Vialto Partners, a global mobility firm, told CNA that its clients operating in Malaysia have responded to the proposed change with a mix of immediate workforce adjustments and longer-term strategic planning.
“Some have raised concerns about increased operating costs, potential losses in productivity and innovation, and risks to business continuity,” she said.
“These concerns are particularly pronounced in niche and highly specialised areas such as advanced engineering, high-end manufacturing, digital transformation, and energy transition, where the local talent pipeline remains limited and businesses have traditionally relied on expatriate expertise.”
Vialto’s clients in Malaysia include multinational companies (MNC) and small- and medium-sized enterprises (SMEs) in industries like financial services, oil and gas, digital transformation, manufacturing, electrical and electronics, and global professional services.
To minimise disruption to business operations, companies are reassessing recruitment strategies to strengthen local talent hiring, and, where necessary, the relocation of certain roles or employees to other countries, Reddy said.
Companies are also evaluating a “thorough review of salary structure” for both current and future expatriate populations compared to local talent availability, and the implementation of training programmes to support local succession planning.
“At the same time, companies have expressed cautious optimism about the policy’s long-term objectives,” she added.
“Over time, this approach is expected to help build a sustainable pipeline of local professionals capable of filling senior and specialised roles, ultimately enhancing local earning potential and supporting Malaysia’s long-term economic competitiveness.”
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