Here are Malaysia’s statutory updates for 2025.
Effective Q4 2025
Malaysia to Enforce Mandatory EPF Contributions for Foreign Workers
The Malaysian government will introduce mandatory Employee Provident Fund (EPF) contributions for foreign workers starting in Q4 2025. This policy aims to enhance social security coverage for expatriates and migrant workers in Malaysia.
Key Details:
- Employer Obligations: All employers must enrol foreign employees in the EPF system.
- Contribution Rates: The specific employer and employee contribution percentages will be determined in the implementation guidelines.
- Phased Implementation: The mandate will be rolled out in stages, allowing businesses time to adjust.
Compliance Measures:
- Payroll Adjustments: Employers must update payroll systems to account for EPF deductions.
- Regulatory Guidelines: Authorities will provide detailed compliance requirements before the enforcement date.
- Enforcement & Monitoring: The government will monitor adherence and may impose penalties for non-compliance.
Source: Asia News Network
Effective May 2025
Malaysia Expands Sales and Services Tax Framework
Malaysia’s 2025 Budget introduces significant changes to the Sales and Services Tax (SST), broadening its scope to cover a wider range of goods and services:
- Sales Tax: Premium and non-essential goods, such as luxury items like imported salmon and avocados, will now be subject to sales tax.
- Service Tax: Business-to-business (B2B) services, including fee-based financial services, will be taxed for the first time, aligning with international practices.
These measures aim to enhance revenue collection and reflect Malaysia’s shift toward modernising its tax system.
Source: VAT Calc
Effective April 2025
Malaysia Introduces Investor Pass to Facilitate Foreign Investment
The Malaysian government has announced the implementation of the Investor Pass, effective 1 April 2025, to streamline entry processes and support extended stays for foreign investors engaging in business and investment activities.
Key Details:
- Eligibility: The Investor Pass is available to two categories of applicants:
- New Investors: Potential investors without prior investment records in Malaysia.
- Investors in Pipeline: Investors identified as interested in investing in Malaysia, currently negotiating with the Malaysian government, or those who have applied to the Malaysian Investment Development Authority (MIDA) for project approvals.
- Validity: The pass grants an initial stay of six months, with the possibility of a six-month extension, subject to justification and requirements.
- Application Process: Applications must be submitted through the Xpats Gateway platform. Applicants are required to be outside Malaysia at the time of application.
Processing Time: Once all required documents are submitted, applications will be processed within five working days. - Dependents: The Investor Pass does not permit holders to bring dependents or apply for Dependent Passes.
Source: Expatriate Services Division, Immigration Department of Malaysia
Effective March 2025
Malaysia Implements ePASS for Expatriate Pass Endorsements
The Immigration Department of Malaysia (JIM) will introduce ePASS for digital issuance of expatriate pass endorsements under the Expatriate Services Division (ESD). The ePASS will apply to:
- Employment Pass (Category I, II, III) – New and Renewals
- Professional Visit Pass
- Residence Pass-Talent
- Dependant Pass
- Long Term Social Visit Pass
- Transfer of Endorsement / Take Up Balance
Passes issued under Public Universities and Government Agencies will continue with the current endorsement process. The issuance of i-KAD remains unchanged until further notice.
Source: Expatriate Services Division (ESD), Immigration Department of Malaysia
Effective February 2025
Malaysia Updates Sample Documents for Professional Visit Pass Applications
The Malaysian government has updated sample documents required for Professional Visit Pass (PVP) applications under the Expatriate Services Division (ESD) Online system.
Key Details:
- Mandatory Compliance: All PVP applications must use the updated sample documents.
- Revised Documents Include:
- Sample Application Letter
- Personal Bond Ref. No. (P.L.N. 228/63)
- Memorandum of Understanding
- Objective: To streamline the application process and improve documentation standards for expatriates.
Employers and applicants should refer to the updated documents and ESD Online Guidebook for compliance.
Source: BAL
Effective February 2025 and August 2025
Malaysia’s Minimum Wage Increase
The Malaysian government has announced a minimum wage increase to RM1,700 per month under the Minimum Wage Order 2024. The implementation will be rolled out in phases:
- From 1 February 2025:
Applicable to employers with five or more employees, or those engaged in professional activities as classified under MASCO 2020. - From 1 August 2025:
Applicable to employers with fewer than five employees who are not engaged in professional activities. The minimum wage for these employers remains at RM1,500 per month until 31 July 2025.
Non-compliance may result in legal penalties under the National Wages Consultative Council Act 2011 (Act 732).
Source: NST Malaysia
Effective January 2025
Malaysia Updates Employer Tax Filing Forms for 2024
The Malaysia Tax Authority (LHDN) has updated Forms E, EA, and C.P.8D for the 2024 tax year, with revised formats and explanatory notes.
Key Deadlines:
- Form EA (Employee Tax Statement) – Must be provided to employees by 28 February 2025.
- Forms E and C.P.8D (Employer Tax Filing) – Must be submitted by 31 March 2025.
Employers should ensure compliance with these updated filing requirements to meet tax obligations on time.
Source: Ramco
Malaysia Enacts Finance Act 2024
Malaysia’s Finance Act 2024 has officially received Royal Assent, making government financial proposals legally binding.
Key Update:
- Mandatory EPF Contribution for Non-Malaysian Workers
- Will be introduced gradually in phases.
- Until fully implemented, the current EPF process remains unchanged.
This legislative move reinforces the government’s commitment to financial reforms while ensuring a structured transition for non-Malaysian employees.
Source: Ramco
Malaysia Revises Monthly Tax Deduction (MTD) Reliefs
Malaysia’s Inland Revenue Board has updated Monthly Tax Deduction (MTD) reliefs under the Finance Bill 2024, expanding tax benefits for individuals and families.
Key Changes:
- Higher Medical & Care Relief:
- Child disability treatment relief increased to RM6,000.
- Medical check-ups now cover diagnostic tests & self-testing devices.
- Parental medical relief expanded to include vaccinations.
- Extended Education & Family Support Relief:
- Nursery/kindergarten fee relief (RM3,000) extended until 2027.
- SSPN education savings tax relief (RM8,000) extended until 2027.
- Education & medical insurance relief increased to RM4,000.
- Home, Sports & Sustainability Incentives:
- First-time homebuyer tax relief (up to RM7,000) reinstated for 2025–2027.
- Sports tax relief (RM1,000) now includes parents.
- EV charging tax relief expanded to food waste composting machines.
- Higher Relief for Disabled Individuals:
- Disabled taxpayer relief raised to RM7,000.
- Disabled child relief increased to RM8,000.
While the MTD formula remains unchanged, TP1 & TP3 forms have been updated for these adjustments.
Source: Ramco
