“Malaysia Needs The Expats, Not The Other Way Around,” Warns MEF President As New Mandate Sparks Debate Over Its Impact
Malaysia’s latest policy linking expatriate hires to mandatory internship placements for college and university students is causing waves of unease in the corporate world.
While the government aims to nurture a skilled local workforce and improve employability for 100,000 students, trade groups fear the initiative might backfire.
The Malaysian International Chamber of Commerce and Industry (MICCI) and the Malaysian Employers Federation (MEF) have raised concerns about the policy, which requires businesses to take on three interns for every expatriate they employ.
With a pilot phase kicking off in February and full enforcement set for 2026, companies are bracing themselves for what could be an operational and financial headache.
MICCI President Christina Tee warned that Malaysia risks falling behind regional competitors like Singapore and Vietnam, which offer more business-friendly policies.
“Tying obligations to expatriate hiring may restrict talent mobility, making it difficult for multinational companies to deploy high-level expertise when needed,” Tee said.
Burden or Opportunity? The SME Dilemma
While the policy has its merits, smaller businesses may struggle to keep up.
SMEs, often limited in resources, could find it challenging to integrate interns while managing existing operations.
“We foresee companies facing difficulties due to limited capacity to implement the policy,” Tee added.
The government has sweetened the deal with promises of tax breaks and support through programmes like the paid and structured internship incentives and Ilham.
However, industry leaders argue that these incentives may fall short of covering the real costs of running robust internship programmes.
For SMEs already grappling with slim margins and resource constraints, the policy could feel less like an opportunity and more like an obligation, adding layers of complexity to their operations.
Will Foreign Investors Look Elsewhere?
MEF President Syed Hussain Syed Husman expressed unease over linking expatriate hires to internship requirements, citing it as “short-term thinking that may lead to self-destruction.”
His apprehension stems from the potential impact on Malaysia’s attractiveness to multinational corporations (MNCs).
“The reality is that Malaysia needs the expats…not that the expats need Malaysia,” he said.
According to Hussain, industries heavily reliant on foreign experts for transferring advanced skills may find themselves at a crossroads.
The added responsibility of supervising interns could further strain managerial bandwidth.
The Bigger Picture: Nurturing Tomorrow’s Workforce
Despite the resistance, the government’s intent is clear: bridging the gap between academic learning and real-world experience.
By mandating internships, the policy aims to equip students with workplace skills that enhance their employability.
However, questions remain.
Will companies embrace this challenge and innovate their internship programmes to create a win-win scenario?
Or will they sidestep the policy, leaving Malaysia at risk of losing its competitive edge in the region?
As the pilot phase unfolds, businesses and policymakers must collaborate to find middle ground.
Striking the right balance between nurturing local talent and maintaining Malaysia’s appeal to global investors could define the country’s economic trajectory in the years to come.
