Recruitment in Malaysia

Recruitment in Malaysia: Frequently Asked Questions

What is the monthly cost of using an Umbrella Company in Malaysia? 

5% with a minimum of $500 USD.


What is the cost of a Work Permit in Malaysia?

$2400 USD with $284 USD cancellation at the end of the assignment.

How long does it take to get a work permit in Malaysia?

Nationality dependent. From 3 weeks to 2 months.

What is the estimated net retention in Malaysia for a contractor earning USD 500 per day?

Depends how it is structured. From 70-85%.

What is the estimated net retention in Malaysia for a contractor earning USD 1000 per day?

Depends how it is structured. From 70-85%.

Read more about the work permit process.

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Recruitment in Malaysia can be a challenge, but you don’t have to drown in time-consuming admin just to place a candidate. You can simplify complications by using an Umbrella Company (or “contractor management company”), as long as you pick the right one.

Skip ahead to find out how we can help you place candidates faster, or simply read on to find out more about the specific issues you’ll face.

Placing a new contractor in Malaysia: what are the challenges?


Recruiting in Malaysia generally requires a lot of complex admin duties, and contractors might end up paying too much in taxes or failing to comply with Malaysia tax law. It’s important to know what kind of concerns you’ll be facing.

  • Double taxation: Contractors can incur a tax liability in both their home country and in Malaysia. Many countries have agreements that mitigate this type of issue, but whether or not you can take advantage of them will depend on factors like the length of the contractor’s stay, or the laws of the contractor’s home country. You can learn more about double taxation here (note: this info was written with respect to the UK, but the general concepts will still apply).
  • Withholding tax: If a foreign company is used to provide services overseas, the payments made to that company by the Malaysia client could be liable for withholding tax under Malaysia tax law. Find out more about withholding tax.
  • Individual taxation and tax residency: A contractor’s tax liability will often be determined by his or her residency status in their home country and in Malaysia. Figuring out their tax residency can be difficult and is often tied to the length of their stay in Malaysia (or out of their home country). Read more about tax residency and individual tax liability here.
  • Permanent establishment: Most double taxation agreements limit the scope of taxation in the host country by providing that a business is only taxable in another state if it has a permanent establishment in that state. A permanent establishment is a fixed base such as a branch, office, factory, workshop, mine or oil well. To find out how to avoid permanent establishment and unnecessary tax liability, read more about the issue.

Work permits

Contractors will need to find a sponsored work permit, which can be difficult and may seriously slow the placement process. Additionally, they’ll need a new permit for each new contract, spawning even more paperwork.

See our FAQ to find out more about the cost and processing time of Malaysia work permits.

Why use a contractor management company?

An efficient way to manage these problems is to outsource them to a contractor management company. They’ll act as the contractor’s “employer,” handling all of their invoicing, fees, and social security. As Malaysia tax experts, they also help contractors comply with local tax law while maximising the amount they get to keep.

A quicker, better recruitment process: Working with an Umbrella Company means saving time, effort, and resources. Higher earnings and a smoother transition also make contracting a more attractive opportunity, helping you place candidates more quickly and successfully.

Still, you’ll need to find the right company for you and your candidate.

How to find the right Umbrella Company?

Making sense of the optionsFor free, we match contractors with Umbrella Companies and can help dramatically reduce waiting times. There are numerous Umbrella Companies in Malaysia and each has its own specialties, services, and payment structures. Choosing the right one is crucial, but it can be difficult when you’re facing a bunch of unfamiliar options.

We’ve developed an extensive database of these companies. We can guide you through your options and help connect you with the best company for you and the contractor.

Get in touch: If you want straightforward, honest advice on recruitment in Malaysia, we’re easy to contact. Call, e-mail, or chat with us online - for free.

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Work Permits & Payroll - Frequently Asked Questions


What documentation is required for a Malaysia work permit?

Collation of documents can take some time as the following have to be certified as a true copy by Malaysian embassy/consulate in the home country/country of residence of the candidate: Photocopy of entire passport, detailed CV, academic/professional certificates, marriage certificate if applicable, birth certificates for children if applicable.

What is the work permit process in Malaysia?

To work legally in Malaysia an Employment Pass (EP) must be applied for. The local company needs to submit the application to the immigration authorities once all documents have been received.  The EP will be sponsored by the local Malaysian employer. Validity is normally 2 years however the immigration authorities have the final decision on the duration. While the application for EP can be done in Malaysia, there may be the requirement for the contractor to return to his country of residence to finalise the EP. This requirement depends on each situation. 
The employment pass (EP) process takes approximately 14 working days plus 2 days to endorse the visa in the passport once all the information/ documents have been collated and the application has been filed with the immigration authorities. 


Can you transfer from a Business Visa to a Work Permit in Malaysia?

Yes in some instances.

Can we organise Business Visas in Malaysia?


How long does it take to process a Business Visa in Malaysia?

5 to 12 days.

How much does a Work Permit cost in Malaysia?

$450 USD.

Can nationals of certain countries enter Malaysia without a Business Visa (ex. on an entry visa or visa waiver)?

Not to work.

$3500 USD.

What is the monthly cost to run a local payroll in Malaysia?

$350 USD.

How does payroll work in Malaysia?

Tax and social security are deducted at source, payroll paid monthly.



Client comment

"Great advice and excellent service on contracting and immigration solutions in the UK. I would highly recommend Tim and the team to assist you with accurate, clear and concise contracting advice in the UK or any other country for that matter."

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Shell International Trading & Shipping