Companies hiring expatriates in Malaysia will soon be required to create more opportunities for local talent. Under the latest policy introduced by the Human Resources Ministry, businesses must provide structured internships for three local students for every expatriate they employ. In partnership with Talent Corporation Malaysia Bhd (TalentCorp), the ministry has introduced the 1:3 Internship Policy to revolutionize workforce development.
The initiative is expected to transform Malaysia’s talent landscape, fostering practical skills among students and supporting businesses in building a sustainable workforce. Here’s what you need to know about the policy and its implications.
What Is the 1:3 Internship Policy?
At its core, the policy requires companies employing expatriates to offer structured internships to Malaysian students from higher education institutions. For every Employment Pass (EP) approved for an expatriate, businesses must provide up to three paid internship placements for local students.
With an ambitious goal to benefit 100,000 students nationwide, the program aims to bridge the gap between academic learning and real-world industry needs. Students will gain hands-on experience, making them more competitive in the job market and better equipped to meet industry expectations.
How the Policy Works
The policy will be introduced in stages to ensure a smooth transition for businesses and students:
- Pilot Phase (February 15 – December 31, 2025): The initial implementation will focus on companies under Tier I and Tier II categories.
- Full Implementation (January 1, 2026): The policy will be enforced across all applicable sectors.
Internship requirements depend on the type of Employment Pass approved:
- EP I: Three internships per expatriate.
- EP II: Two internships per expatriate.
- EP III: One internship per expatriate.
A cap is in place to ensure the policy remains practical—if the required number of internships exceeds 2% of a company’s total workforce, the obligation is automatically limited to this threshold.
What’s in It for Companies?
While the policy introduces new responsibilities, it also offers significant incentives to encourage participation:
Tax Relief Benefits
Businesses can claim double tax deductions on expenses related to hosting interns, including:
- Monthly allowances for students.
- Costs for training, development programs, and logistics.
HRD Corp Levy Utilization
Companies can utilize up to 50% of their HRD Corp levy balance to fund internship-related expenses. This minimizes financial impact while meeting policy requirements.
Streamlined Talent Matching
The Ilham Kesuma platform by TalentCorp simplifies the process of advertising internships, matching businesses with suitable candidates, and managing placements efficiently.
Priority for Future Expat Approvals
Companies that comply with the policy will be prioritized for future Employment Pass applications, making it easier to hire expatriates when needed.
Who Does the Policy Apply To?
During the pilot phase, the policy will apply to Tier I and Tier II companies applying for Employment Passes in the EP I and EP II categories. The full rollout will extend to all businesses employing expatriates by 2026.
Importantly, the policy will not disrupt ongoing Employment Pass approvals, ensuring businesses can adapt without operational delays.
Why This Policy Matters
The 1:3 Internship Policy is a strategic initiative that addresses key challenges in Malaysia’s workforce development. Here’s why it’s important:
Real-World Experience for Students
The policy provides students with practical training that goes beyond classroom learning. By working in professional environments, they gain valuable skills and confidence to excel in their chosen careers.
Boosting Employment Readiness
With structured internships, students become more aligned with industry demands. This ensures they are job-ready upon graduation, reducing the mismatch between skills and market needs.
Knowledge Transfer from Expatriates
Expatriates bring expertise and global perspectives that local students can learn from. The internship experience allows for a meaningful exchange of knowledge, fostering a culture of mentorship.
Developing a Homegrown Talent Pool
By nurturing local talent, the policy helps create a sustainable workforce that reduces dependency on expatriates over time. This ensures that Malaysia’s industries are equipped with skilled professionals to drive long-term growth.
What Does It Mean for Students?
The 1:3 Internship Policy is a golden opportunity for local students to gain valuable industry experience. Here’s how it benefits them:
- Paid Internships: Students receive financial support while gaining hands-on experience.
- Structured Learning: Internships are designed to provide meaningful, skill-building opportunities.
- Industry Exposure: Students work in professional environments alongside industry leaders, including expatriates.
- Career Preparation: The experience gained prepares students to transition seamlessly into the workforce.
Get Ready to Participate
Whether you’re a company preparing to comply with the 1:3 Internship Policy or a student seeking valuable internship opportunities, here’s how you can get started:
For Companies
- Once your Employment Pass (EP) is approved, you will receive an email notification from TalentCorp to onboard your company on the MyNext platform at www.mynext.my.
- After your company account is activated on MyNext, you can begin creating internship postings under the MySIP program to advertise placements for students.
- Recruit interns and ensure compliance with the internship ratio requirements.
- Claim your double tax deduction incentives through the MySIP implementation via the MyNext platform.
For Students
- Register on the MyNext platform at www.mynext.my.
- Explore a variety of internship opportunities listed under MyNext Talent that match your academic and career goals.
- Apply for quality internships that provide structured training and real-world industry exposure.
Companies and students interested in this initiative can find more details on the official TalentCorp website: 1:3 Practical Training Policy.
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