Employer of Record Services Malaysia
Malaysia is chiefly described as one of the most prosperous countries in Southeast Asia. In the past few years, its economy has shown vigorous growth and the businesses are proceeding towards innovation and technology. Malaysia is known to be the most rapidly developing country in Asia. The country offers a sound financial and governmental structure as compared to other markets. The ethnic diversities, English proficiency, and the fact that it is home to many big companies make Malaysia an attractive business space. Moreover, the regulatory and budgetary background promises fewer taxes globally.
Table of Contents
• Malaysia Employer of Record Services
• Spotlight on Malaysia
• Public Holidays In Malaysia
• Types of Employment in Malaysia
• Hiring Considerations in Malaysia
• Challenges when expanding into Malaysia
• Employment Contracts in Malaysia
• Employer of Record solution in Malaysia
• Why Infotree Global Solutions?
Malaysia Employer of Record Services
Malaysia, a middle-income country with a large population is the perfect market for new businesses. However, setting up businesses and expanding in a foreign nation comes with a lot of challenges. Infotree Global can make this process smooth and efficient for you. Our hiring and payroll services are cost-effective and will aid you in all employment processes. From the hiring, running payroll, to health benefits and the legal formalities, all issues will be dealt with by us. This way, you can focus on the business and take it to great heights. The Malaysia employer of record services will be of assistance in taking advantage of the rich business opportunities that the country offers. It makes sure that the process of your company’s expansion is fast and productive, all in conformity to the laws of the nation.
Spotlight on Malaysia
Before thinking of expanding businesses in Malaysia one should be aware of some basic facts about the country.
Malaysia is spread over 330,803 square km and has a population of 32.73 million comprising of various ethnic groups- Malay, Chinese, Indigenous, Indian, and others. The capital is Kuala Lumpur. The official language is Malaysian whereas the English Language is also acknowledged. As of 2020, the economy amounts to $336 billion. The country’s business landscape favors industries especially in services, electrical equipment, and agriculture sectors.
Public Holidays in Malaysia
• Chinese New Year
• Labor Day
• Wesak Day
• Prophet Muhammad’s Birthday
• Eid al Fitr or Hari Raya Puasa
• Eid al Adha or Hari Raya Haji
• Christmas Day
• Hari Malaysia Day
• Hari Merdeka or Independence Day
• Awal Muharram
• Seri Paduka Baginda’s Birthday
Malaysia is a federation of 13 states working as a representative democratic constitutional monarch. Here, Yang di-Pertuan Agong is head of the state and Prime Minister is head of the government. The economy is run by the government and recently it has proposed an aspiring economic plan towards modernization. The accepted currency in Malaysia is Ringgit (MYR, RM). All employment contracts should have the amounts in that currency only. With a labor force of 15.7 million, this nation attracts businesses from everywhere.
Types of Employment in Malaysia
The terms of employment in the contracts could be either fixed or undetermined. If the fixed-term contract is extended, again and again, the court could perhaps identify that employee as permanent. The employees under the fixed-term contracts are eligible for statutory benefits.
If foreigners wish to work in Malaysia, they have to obtain a work permit from the Immigration Department. The permit depends upon the employee and the kind of work they want to do. Skilled foreign employees must acquire an Employment Pass for the paid work. There are three types of Employment Passes determined by the employee’s salary and period of their contracts.
Employment passes in Malaysia
Category 1 Pass: This includes individuals holding key positions in a company, such as directors, CEO, project managers, etc.
Category 2 pass: This includes individuals holding managerial positions in a company.
Category 3 Pass: This included non-executive positions in a company, individuals having significant work experience, and specific technical skills.
Infotree global via their PEO services will take care of all such employee responsibilities in compliance with the employment laws for you and your company.
Hiring Considerations in Malaysia
Before hiring an employee in the country, you need to understand the process well. It depends on employers to present specific criteria about the qualifications and attributes for the job relevancy. However, employers should avoid unfair discrimination.
Unlike other jurisdictions, Malaysia has no particular restrictions for conducting background checks on employees by accessing the information available on social media platforms. Employers should explain the scope of the job role to the applicants during the interview and all the basic information should be communicated. This information will establish a clear understanding right from the start.
Once an employer has decided to hire an individual, a letter of employment should be ready. An employee should accept this letter. This simple letter should have all the basic information like job position, remuneration, leave, and termination.
Another way is to have a full commercial contract for senior roles. It usually includes additional details like employee benefits, bonus terms, and confidentiality clauses.
Larger corporations prefer an employee handbook with all-inclusive terms and conditions. It can be comprehensive and talk about corporate work culture. However, it is not recommended for employers who have different employment terms and conditions for their staff members.
Employers must document the employment terms and conditions in detail to avoid legal hassles. The terms of employment may vary for different employees depending on varied factors like job role, scope, and industry. But most common details should be there in the contracts for employees like a job description, basic salary, deductions, leave entitlements, performance reviews, and employee benefits.
As an employer, if you wish to enforce any element of the employment relationship in the future, it should be documented right from the start to avoid a messy dispute.
Challenges when expanding into Malaysia
The diverse population of Malaysia means cultural nuances in the country. Employees can expect encounters with Malaysian, Chinese, Indian, and others. Since the dominant religion is Islam here, so the workplace is expected to be quite conservative. The physical touch between men and women in the workplace is inappropriate. Men can expect a handshake only when a Malay or Chinese women initiate it. Men often wear long sleeve shirts and women wear traditional clothes. Clothes should not be revealing. Fridays are for praying. So when scheduling a meeting, avoid that day.
You should understand the Malaysian business regulations and stick to them else it may invite legal troubles for you. It is also important to conduct research before entering the foreign market and especially, the industry you are going to operate. There are few trade permits and certificates needed to operate a business there and you have to submit all the right types of documents. As a businessman, you should determine the amount and time you are going to invest and have an idea of the return on investment as well. Pick the best locations so that your venture can be benefitted.
Employment Contracts in Malaysia
The employment contract should be in the local language and should state all employment-related details. These include- job description, work compensation, benefits, working hours, severance pay, and preconditions of termination. The salary and compensation have to be in the Malaysian Ringgit. The minimum wage for a month is RM 1,200. There is no probation period as specified in the law but 3 to 6 weeks is considered customary among all. There is a 13-month pay bonus which can be spread over the 12 months while receiving. Employers are mandated to give a termination notice in advance. However, in a case of misconduct, this is not obligatory.
Paid maternity leave of 60 days is granted to women working for at least 90 days. Paternal leave of a few days is granted in some companies. The vacation paid leave is determined by the work duration of employees. Less than 2 years will grant 14 days, 2 to 5 years will grant 12 days, and more than 5 years will grant 16 days (annually). Paid sick leave is granted to all in case of no hospitalization. Less than 2 years will grant 14 days, 2 to 5 years will grant 18 days, and more than 5 years will grant 22 days. In the case of hospitalization, 60 days are granted when a medical officer certifies it. Making sure all this is done methodically, is a tough task.
The employee is required to work 40 hours per week (8 hours per day) and is entitled to a rest day after 6 days of work. Malaysia’s Employment Act of 1955 limits the hours of overtime to 104 hours in a month. Any overtime more than this necessitates a permit from the Department of Labor. The overtime of more than 48 hours is paid at the rate of 1.5 times the base rate. Infotree global makes the task of running payroll a cakewalk for companies they connect with.
Employer Of Record Solution In Malaysia
The hiring and payroll services in Malaysia have a team of professionals to guide and help companies in global expansion. These professionals take care of all the employment duties. Their duties like taxation, legislation, hiring employees, running global payroll, and sponsoring work permits make the company’s work quick and efficient. All of this is done in compliance with Malaysian laws. This way the companies don’t have to worry about employment risks, legal hassles, and labor issues. They can just sit back and run their businesses.
Why Infotree Global Solutions?
Global expansion is the ultimate step for every company. It is important and quite complex. We specialize in providing hiring services worldwide. If you are setting up a business in Malaysia we are your go-to solution. Our experts are dealing with employment hassles since forever. By letting them handle your employment tasks, companies can save a lot of money and effort. You can put all that effort into your business operations to progress further. Also, we help you incur profits from the rich opportunities of the Malaysian market. This way, you can save 60% of the time and energy that you would have otherwise invested in setting up a branch entity. We are ready to manage your company’s hiring responsibilities while ensuring employment compliance.
Hire and onboard your workforce in Malaysia with Infotree Global Solutions!