Testimonial
Manuel Ramos
TERAO ASIA
Managing Director
We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.
5/5
Through our PEO (Professional Employer Organization) services in Malaysia, INS Global can help you set up, hire employees, and quickly start working. We are your local partner in Human Resources services, helping you to cut through the red tape and limit the costs connected to global expansion.
For companies wishing to hire and manage crucial HR functions in overseas target markets in as little as 48 hours, a PEO in Malaysia (Professional Employer Organization) offers a simple and secure path to total global mobility.
As a third-party organization that takes on the responsibilities of an employer, an Employer of Record (EOR) in Malaysia provides companies with a cost-effective and simple solution for the complications of overseas hiring and employee management. INS Global offers EOR services for companies looking to streamline the complexities of global mobility.
Want to have a Team in Malaysia TODAY?
PEOs can provide several services to help you build a successful company in Malaysia. Our PEO in Malaysia can legally employ your staff, manage employee services (payroll outsourcing and benefits), and handle local regulations, saving you time and money.
The PEO’s local knowledge of legal and administrative best practices will ensure that your company maintains compliance with each area of local laws.
Common issues with HR can lead to an increasingly high incidence of fees and fines when entering Malaysia. A PEO provides local expertise that will help reduce these costly errors
By providing payroll outsourcing services in Malaysia, alongside recruitment and contractor management, a PEO takes care of the HR processes required for your entry into Malaysia while your company increases its speed of growth
Estimated time for Company Incorporation in Malaysia: 4-12 months
Estimated time to establish a PEO relationship in Malaysia: 5 days
*Estimate
Incorporating a company in Malaysia can be a difficult, time-consuming process that requires you to establish a legal and physical presence. Our PEO allows your company to operate without having to go through the traditionally required steps to form a separate entity.
Manuel Ramos
TERAO ASIA
Managing Director
We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.
INS Global’s PEO professionals manage your employee recruitment and management needs in Malaysia in 4 simple steps:
Once your team has decided that expanding into Malaysia is the right decision, the next step is understanding the difference between an EOR and a PEO to take full advantage of these two solutions.
The Employment Act of 1955 is the main source of legislation related to labor matters in Malaysia. The Employment Act provides the minimum terms and conditions for applicable employees. Any contract that attempts to offer less favorable benefits than those stipulated in the Employment Act shall be void and the benefits replaced with those in the Employment Act.
The Employment Act does not apply to all employees. The protection offered under it is only applicable to these categories of workers:
The minimum wage is RM1,000 per month, as stipulated by the Minimum Wages Order of 2016. In general, an employer is required to deduct from their employee’s salary every month their contribution to the Employees Provident Fund (EPF), their contribution to social security organization (SOCSO), and their monthly income tax deduction.
Based on section 60A(1) of the Employment Act, no qualified employee shall be allowed to work for: more than 5 consecutive hours without a period of rest for 30 minutes or more than 8 hours a day.
For employees that are qualified, there are a minimum of 11 public holidays that the employer must recognize. Of these 11, the following 5 are mandatory:
The other 6 days are holidays that must be chosen by the employer. Once these 6 holidays have been chosen, the employer should communicate which days they have chosen to employees in an obvious way. In cases where the holiday falls on a typical rest day, the holiday will be moved to the following Monday.
Under the Employment Act, the minimum required annual leave that an employee is entitled to is 8 days for less than two years, 12 days for less than 5 years, and 16 days for more than 5 years.
Under the Employment Act, the minimum required sick leave days are 14 days for less than 2 years, 18 days for less than 5 years, and 22 days for more than 5 years. In cases where the employee will need to be hospitalized, the employee will be entitled to 60 days per year.
There are certain conditions that must be met for a female employee to be entitled to paid maternity leave.
To meet the requirements, the employee must have worked for at least 90 days at the company and have been at the company consistently in the last 4 months. Once these conditions are met, a female employee will be entitled to no less that 60 days of maternity leave.
If an employee remains absent from her work after the end of maternity leave, she is protected from termination for 90 days following the end of her maternity leave.
For both resident and non-resident companies operating in Malaysia, corporate income tax will be imposed on income that accrued from within Malaysia. The current corporate tax rates are as follows:
| Type of Company | Chargeable Income (MYR) |
CIT Rate for Year of Assessment (%) 2020-2021 |
|---|---|---|
|
Resident Company (other than company described below) |
|
24 |
|
Resident Company:
|
On the first 600,000 |
17 |
|
In excess of 600,000 |
24 |
|
|
Non-resident company |
24 |
|
Malaysian EOR services are priced as a percentage of the wage of a co-employed worker. This fee is paid as part of the payroll process and covers all HR operations on behalf of the employee.
Yes, you can hire individuals in Malaysia safely and legally if you use a local EOR. EOR services provide a secure way to hire or transfer people to Malaysia without the need for a local company structure.
Employers in Malaysia are expected to guarantee comprehensive safety for their employees. EOR services provide companies with everything they need to properly manage their obligations in Malaysia properly while also ensuring that employment contracts and administration are compliant.
With the right support, you can enter a new market without needing a local organization in Malaysia. EOR services give your staff all the local rights and benefits they require for a single affordable monthly fee.
An EOR agreement allows an independent contractor in Malaysia to obtain employee benefits while maintaining complete control over their work and work processes. You can connect with multiple local contractors in this manner, and the EOR will handle contractor classification and payment compliance assurance.
Because of our diverse local resources and wide recruitment networks, our Malaysian recruiting agency can provide excellent hiring services while adhering strictly to hiring best practices. Because they are intimately familiar with all local criteria and laws, our recruiting professionals can discover the best local or foreign talent for you.
With INS Global’s Malaysian recruiting agency solution and compliance assurance, you can locate the best global recruiters in Malaysia and abroad. EOR services in the country have a unique hiring approach that takes into account any and all regional or local variations in employment norms.
INS Global provides the scalability you require to hire staff and expand in more than 100 countries without having to meet any minimum or maximum service standards.
Your global expansion may necessitate the ability to respond quickly to dynamically changing marketplaces around the world. As a result, the number of staff available through INS Global’s local structures is completely adjustable to your needs.
Payroll taxes, recruiting fees, and signing bonuses are just a few examples of the direct and indirect costs of working in Malaysia. An EOR or PEO service, on the other hand, may manage all of this for a single fee.
Working in Malaysia may also entail less evident expenditures such as incentive schemes, relocating international staff, and any costs involved with building local institutions. With these costs, a thorough understanding of local benchmarks aids in the reduction of wasteful spending.
By leveraging global EOR services, you can avoid the need for a local physical site, which may be necessary as part of the company incorporation process.
You can then decide whether or not to provide your staff with a physical place in Malaysia to carry out their tasks conveniently and efficiently.
Under national labor regulations, certain employee benefits or obligations may differ between Malaysians and foreign citizens. In these cases, INS Global can provide complete compliance assurance to both groups of workers and respond quickly to changes in local or international requirements.
Firms of all sizes, from tiny to large multinationals, can benefit from EOR and PEO solutions to accelerate their success in a new market. It is now possible to employ local or foreign workers effectively and securely thanks to novel solutions for employment outsourcing.
Our services can even replace internal HR responsibilities while providing simple means to scale up to meet the need for additional employees.
Businesses in various industries that lack structures in a target country (or desire to avoid cost-scaling concerns) may benefit the most from the legal expertise provided by PEO and EOR services.
In addition to using local Malaysian PEO services or an EOR in Malaysia, you can recruit contractors through a certified local organization, an umbrella firm, or staffing agency services. Another advantage of outsourcing the requirement to engage and pay contractors in Malaysia is the ability to use contractors securely and effectively without fear of misclassification.
Although you are not required to provide employee benefits or protections, you must ensure that Malaysian contractors are properly compensated. You may be confident in the caliber of the contractors you select if you use an EOR, and they will be able to work more productively due to the incentives given by a local EOR group.
Pay periods in Malaysia typically last a month, with employers being responsible for guaranteeing employees‘ salary, benefits, tax, and EPF (Employee Provident Fund) social security payments. However, employers are not required to provide 13th–month bonuses or manage yearly tax filing procedures on their employees‘ behalf.
In 2023, the minimum wage in Malaysia is RM1,500 per month as of July 1st.
The most commonly required document for foreigners to live and work in Malaysia is the Employment Pass (EP). These are generally given to skilled individuals or professionals and require the hiring company to get government approval before being able to offer them. They are valid for 1-5 years, depending on the circumstances.
Additionally, less skilled workers can apply for a temporary work permit available for up to 2 years at a time, or a Professional Visit Pass, which is a temporary work permit allowing foreign companies to hire in Malaysia for up to 12 months.
In addition to being required to guarantee employees access to all national benefits and protections, employers in Malaysia need to make contributions to their workers’ social security funds.
Employer contributions amount to the equivalent of typically around 12-13% of an employee’s monthly salary. These contributions are not necessary for foreign workers except those with permanent residency.
Employees in Malaysia must be guaranteed, at a minimum, paid leave (for sickness, annual vacation, public holidays, and parental care), registration with the EPF and SOSCO, an employment contract that meets all national standards, including minimum wage and overtime requirements, plus workplace insurance.
Additionally, employers in Malaysia will typically offer benefits such as health and well-being plans as perks.
In theory, employers in Malaysia may have considerable power to amend the terms of an employee‘s contract, including transferring employees to other roles within the company. However, in practice, labor courts are unlikely to judge a situation in an employer‘s favor if said changes are in any way detrimental to an employee due to similar past legal disputes generally supporting the employee.
Social security contributions grant employees access to the public healthcare system in Malaysia. When receiving care, patients pay a minimal charge for most services. This system has been overhauled in recent years in order to improve the quality of care available, although many employers still offer privatized healthcare options.
Notice periods in Malaysia are 4-8 weeks long, depending on the time served in the company. However, employers can offer payment in lieu of notice.
Severance pay is required for all employees who have worked for more than 12 months while earning less than RM4,000 per month. This payment amounts to 10-20 days’ salary, depending on the amount of time served with the company.
The Ministry of Human Resources oversees the country‘s regulations surrounding labor and employment conditions, while workers may file complaints with labor or industrial courts in the event of a dispute.
Determined on a yearly basis, employees in Malaysia are eligible for paid leave on any of the 10-11 public holidays. Public holidays falling on a typical rest day must be replaced by a day off on the next available working day in lieu.
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