Malaysia Introduces 1:3 Internship Rule for Companies Hiring Foreign Workers

• Malaysia's Ministry of Human Resources announced a new policy on March 31, 2026, linking expatriate hiring to local student internships
• The 1:3 Internship Policy requires companies with approved Employment Passes to offer paid placements for Malaysian students
• The policy sets different internship ratios depending on the category of Employment Pass a company holds

Malaysia has introduced a new condition for companies seeking to bring in foreign workers, tying expatriate hiring directly to structured internship opportunities for local students.

The Ministry of Human Resources, known as KESUMA, unveiled the policy on March 31, 2026, with implementation handled through the government talent agency TalentCorp.

Dubbed the 1:3 Internship Policy, the framework applies to businesses that hold approved expatriate Employment Passes and obligates them to provide internship placements for Malaysian students in proportion to the number of foreign staff they take on.

How the 1:3 internship policy works

The internship obligations are tied to the category of Employment Pass a company holds.

Firms with a Category I pass must offer three intern placements per foreign hire, those with Category II must provide two, and Category III holders are required to arrange one placement each.

All internships must run for at least 10 weeks, carry a minimum monthly stipend of RM500, and satisfy the quality benchmarks set out under Malaysia's MySIP programme.

Companies manage their commitments through the MyNext platform, where they post placements, select interns, and later claim double tax deductions on internship costs through the same MySIP scheme.

The government says the policy is a direct response to a persistent workforce gap.

Between 250,000 and 280,000 students in Malaysia are required to complete a formal internship or work-based learning placement each year as part of their academic programmes, and officials want to ensure those placements are substantive and industry-relevant rather than informal arrangements.

Exemptions and what changes for employers

Not all companies are immediately subject to the full requirements. Businesses that have operated in Malaysia for fewer than two years, those with Representative Office or Regional Office status, and firms benefiting from government tax exemptions in priority sectors such as digital and energy are eligible to apply for exceptions. Companies may also seek an appeal if the number of placements required exceeds two per cent of their total workforce.

KESUMA was clear that the new policy will not affect or delay the existing Employment Pass approval process for foreign workers.

Source: YEN.com.gh