Hire Employees in Malaysia

Hiring via Employer of Record (EOR) in Malaysia

MSA’s EOR solution allows foreign companies to legally employ staff in Malaysia without having to register a local company. MSA Asia acts as the legal employer, handling all compliance, while you retain full control over the employee’s day-to-day responsibilities.

Key EOR Services Include:

• Employment contract drafting in line with Malaysian labor law

• Monthly payroll processing and statutory contributions (EPF, SOCSO, EIS)

• Personal income tax withholding and filing

• Administration of paid leave, sick leave, and public holidays

• Benefits setup (health insurance, bonuses, allowances, etc.)

• Employee onboarding and HR support

• Termination and severance compliance

Ideal Use Cases:

• Testing the market before setting up a local entity

• Hiring remote or project-based employees

• Short-term or flexible expansion without long-term commitments

Hiring via Local Subsidiary Setup

For companies planning to establish a long-term presence, setting up a subsidiary in Malaysia allows you to hire employees directly under your own entity. MSA Asia provides full incorporation services (SDN BHD), company secretary services, outsourced payroll and post-setup support so you can operate compliantly from day one.

Once your entity is established, we assist with:

• Local HR policy development

• Drafting and issuing compliant employment contracts

• Registration with statutory bodies (EPF, SOCSO, EIS, LHDN)

• Monthly payroll processing

• Employee handbook creation

• Leave tracking and statutory reporting

We also provide optional HR software tools and employee self-service portals to streamline workforce management.

Malaysian Employment Law Overview

When hiring employees in Malaysia—either directly or through EOR—you must comply with key aspects of Malaysian labor law:

Employment Contracts

• Must be in writing for contracts longer than one month

• Should include job title, salary, working hours, leave entitlements, and termination clauses

• Probationary periods are common (typically 3–6 months)

Working Hours and Overtime

• Standard working hours: 8 hours/day, 48 hours/week

• Overtime is payable for hours exceeding the standard, typically at 1.5x rate

• Maximum 104 overtime hours/month

Statutory Benefits

• EPF (Employees Provident Fund): Mandatory retirement savings (employer contribution: 12%–13%)

• SOCSO (Social Security): Covers workplace injury and disability

• EIS (Employment Insurance): Provides unemployment benefits

• Annual Leave: 8–16 days depending on years of service

• Sick Leave: Up to 22 days/year

• Public Holidays: 11 gazetted holidays per year

Income Tax

• Employers are responsible for monthly tax deduction (MTD) from employee salaries

• MSA Asia handles all calculations, filings, and EA form issuance at year-end.

Termination and Severance

Termination must comply with due process under the Employment Act 1955 and relevant case law. Valid reasons include misconduct, redundancy, or poor performance, and employers must provide notice or payment in lieu.

Severance pay may be required under the Employment (Termination and Lay-Off Benefits) Regulations. The amount depends on the length of service and must be calculated carefully to avoid legal exposure.

MSA Asia helps ensure all terminations are handled in accordance with Malaysian law, whether you’re operating under EOR or your own entity.

Why Choose MSA Asia for Hiring in Malaysia

Whether you’re hiring your first employee or building a regional team, MSA Asia provides a complete hiring infrastructure in Malaysia, including:

• Flexible hiring via EOR, no entity needed

• Full subsidiary setup and ongoing compliance

• HR and payroll administration

• Statutory contributions and tax management

• Local expertise on employment law and HR best practices

Our multilingual team ensures clear communication with both clients and employees, and our solutions scale with your business as it grows in Malaysia.