Malaysia's 2026 Employment Pass Changes and Japanese Restaurants

Malaysia's Ministry of Home Affairs and Immigration Department have revised the salary policy for the Employment Pass (EP), and the new criteria apply to all new and renewal applications submitted on or after 1 June 2026. Minimum salaries have roughly doubled in each category, and from 1 January 2027 a succession plan becomes mandatory for Categories II and III.

For a Japanese chef, the EP is in practice the only route to work. Japan is not among the source countries for the scheme for lower-skilled foreign workers (Visit Pass (Temporary Employment)). Following the Immigration Department's official "Revised Expatriate Salary Booklet", this article sets out what the changes mean for salary structures and procedures at Japanese restaurants.

1. What changed on 1 June 2026

• Higher minimum salaries: the minimum basic salary for each category has been raised.
• Assessed on basic salary only: allowances, incentives, bonuses and salary paid outside Malaysia do not count.
• Maximum employment periods: a cap now applies to the cumulative period with the same employer, in the same position and category.
• Dependants now allowed in Category III: previously they were not.
• Succession plan: mandatory for Categories II and III from 1 January 2027.

The policy is applied strictly: every application submitted on or after 1 June 2026 is assessed under the new policy.

2. The new criteria by category

The employment period counts from the date the first EP was approved and is tied to the employing company. If the person moves company, the count restarts from the start of employment at the new company; if their category changes, it restarts from the date the pass in that category was issued. The EP itself allows multiple entry, and each pass runs for 1 to 60 months depending on the employment contract and the approval of the Expatriate Committee.

Family members who can accompany the holder are a spouse and children under 18 on a Dependant Pass, and parents, parents-in-law, children aged 18 to 25 and common-law spouses on a Long-Term Social Visit Pass (LT-SVP).

3. What "basic salary only" means for Japanese restaurants

Pay for Japanese chefs is often structured with a modest basic salary topped up by allowances for housing, meals, attendance and so on. Under the new policy, the only figure that counts is basic salary taxable in Malaysia.

Restructuring pay also affects the base for social security contributions, income tax and overtime. Work out with a local accounting firm how your total employment costs change before deciding. To hire a head chef under Category II, you need a basic salary of at least RM10,000.

4. The five application stages and processing times

EP applications are made through the online system of the Expatriate Services Division (ESD) and processed by MYXpats, a subsidiary of TalentCorp. The process and processing times shown in the official material are as follows.

These are processing times on the authorities' side only. Add the job posting period, document preparation, and the chef resigning from their current job and moving, and it takes a good deal longer before they actually start.

"Regulated sectors" that need a support letter

Support letters were centralised on Xpats Gateway in June 2023 and cover 11 sectors, including tourism (Ministry of Tourism, Arts and Culture, MOTAC), manufacturing and certain services (MIDA), and finance. This list of 11 sectors has no category covering stand-alone restaurants. Check with ESD before applying which category your business falls into, including how a restaurant inside a hotel or otherwise within tourism is treated.

Paid-up capital

The ESD guidebook sets paid-up capital requirements by shareholding for companies employing expatriates: RM500,000 for a 100% foreign-owned company, RM350,000 for a joint venture (at least 30% foreign), and RM250,000 for a 100% locally owned company. However, this guidebook is an old edition prepared in 2015, and we could not confirm the current requirements. We recommend checking with ESD when you set up your local company.

5. The succession plan from January 2027

From 1 January 2027, applications in Categories II and III must include a succession plan. Its stated purpose is to upskill local employees during the EP holder's tenure. The official material does not give the format in detail, but for a Japanese restaurant it might include:

• Names and current stations of local staff who are candidates to take over (for example grill, fryer, prep)
• Staged training goals (dashi, fish preparation, nigiri and so on) and target dates
• Plans for in-house training, external cooking courses and training in Japan
• The coaching role the Japanese chef will play and the time set aside for it

The cumulative cap for Category III is 5 years. From the moment you hire, you need a picture of which position you will hand to local staff after those 5 years. For ways to develop local staff, see also Training local staff in Japanese cuisine and the programme for developing Japanese food culture talent.

6. Chefs already working for you

• Existing EPs remain valid until expiry, and the company does not need to do anything.
• For transfers of the remaining period or transfers of endorsement, the conditions of the existing category continue to apply.
• However, renewal applications submitted on or after 1 June 2026 are assessed under the new criteria. A chef in the old Category III on a basic salary of RM3,500 will need at least RM5,000 at the next renewal.

7. What Japanese restaurants need to decide now

1. List every EP holder's renewal date and basic salary: identify anyone below the new criteria.
2. Restructure pay: move from allowance-heavy packages to basic-salary-based ones, and review anything paid outside Malaysia.
3. Work back from the category's maximum period: 5 years in total for Category III. Draw up a development plan for that period.
4. Revise your budget for new hires: a basic salary of at least RM5,000, plus housing and travel. For the full cost picture, see the cost of hiring Japanese cuisine staff abroad.

Compared with Singapore, Malaysia has no points system and no levy, but the system is now managed through a minimum basic salary and a cap on years. For Singapore in detail, see Singapore EP and S Pass; the separate English-language guide is Hire a Japanese chef in Malaysia.

This article is general information prepared after checking material published by the Immigration Department of Malaysia and MOTAC as of 22 September 2026. It is not legal or immigration advice. Operational details may change. Check with ESD/MYXpats before applying and consult a professional where needed.