Construction industry employers must register with development board

IMPACT – MEDIUM

What is the change? Malaysian authorities have changed employment pass application processes for foreign hires in Malaysia’s construction industry.

What does the change mean? Effective immediately, employers looking to bring foreign employees into Malaysia to work in the construction industry must register an online account with the Construction Industry Development Board of Malaysia. Companies are required to obtain a support letter from CIDB before proceeding with employment pass applications through the MYXpats Centre. Manual submissions for CIDB support letters will no longer be accepted. Employment pass applications that do not include a CIDB letter of support will not be considered for processing.

• Implementation time frame: Immediate and ongoing.
• Visas/permits affected: Employment passes for foreign hires in Malaysia’s construction industry.
• Who is affected: Employers operating in Malaysia’s construction industry.
• Business impact: The change increases the administrative steps that construction industry employers must take in order to sponsor foreign hires on employment passes.

Background: Malaysian authorities require a letter of support from CIDB before employers can lodge an employment pass application for foreign hires in the construction sector. CIDB has launched an online portal to accept applications for support letters, and manual submissions will no longer be accepted. Companies must register and obtain an account with CIDB before they can obtain a support letter. In order to be eligible for registration, companies must have (1) ongoing projects in Malaysia, (2) at least 700,000 ringgits (about US$167,000) worth of paid-up capital, and (3) at least two Malaysia employees with at least five years of experience in engineering positions. Additional information about the registration procedures is available on this CIDB website.

BAL Analysis: Companies operating in Malaysia’s construction sector should take note of the change and complete the CIDB registration process if they have not already done so. Failure to do so may unnecessarily delay employment pass processes. BAL is able to assist in the registration process and in completing applications for CIDB support letters and employment passes.

This alert has been provided by the BAL Global Practice group and our network provider located in Malaysia. For additional information, please contact your BAL attorney.

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