#lauban

Malaysia comprises many states and federal territories and is broadly divided into West (aka Peninsular Malaysia) and East Malaysia (aka Malaysian Borneo.) The Eastern part of Malaysia is made up of states like Sarawak and Sabah, and the federal territory of Labuan. These states had joined Malaysia in 1963 and have retained administrative autonomy as far as immigration goes. In other words, there are four jurisdictions in Malaysia that adjudicate immigration matters based on the work location – West Malaysia, Sabah and Sarawak , and the federal territory of Labuan.

All four immigration processes are distinct and separate from each other. For example, most applications for immigration in West Malaysia are submitted electronically while the ones in East Malaysia are submitted manually.

Interestingly, the citizens of Malaysia who are not born in East Malaysia have to present their passports upon arrival at the East Malaysian state. However, in the federal territory of Labuan, Malaysian citizens can work freely without the requirement of any Labuan work permit.

It may be possible that the varied immigration processes in four jurisdictions are difficult to navigate, especially for people who would seek work permits or authorizations in more than one jurisdiction. It is advisable for any person or group looking to obtain a work permit in Malaysia to ascertain whether the move is to East Malaysia, West Malaysia, or all the four jurisdictions. And if there be any doubt it is always better to discuss with any immigration consultant.

Changes to work authorization rules in the federal territory of Labuan

In the past few years, there have been some changes in rules pertaining to the Labuan work permit. Effective April 2019, the changes have been made to the 2 years’ work permits for any Labuan company.  

Changes with regards to renewing a 2-year visa

Every work permit holder in the federal territory of Labuan needs to submit the application at least six months before the expiry of the present work permit. The application should be accompanied by the following documents: Current EA income tax form for the expatriate

Copy of the personal tax payment receipt

Current payslips of 3 months and their payment proof in bank statements of a minimum of RM10,000 per month

Financial reports of the current year pertaining to the company registered in Labuan

Current business plans showing projections for the coming 3 years

Current business contracts or invoices

Renewal of tenancy contract for offices in Labuan

Changes with regard to the Labuan work permit

There are four major changes as mentioned below:

Need to declare a minimum monthly income of RM10, 000. The income is taxable with the tax rate ranging from 0 – 28% depending on the residency status

Business plan showing the objectives of the business, target market, services and products offered, 3 years’ financial projection, and organization chart

The company should have an operational office in Labuan prior to applying for a Labuan work permit

Each person seeking renewal of his or her work permit is needed to submit letters from two individuals who are known in their respective domains.

Conclusion