The Year 2010 Malaysian Budget proposed for a special 15% tax rate scheme for qualified knowledge workers (returning Malaysians and new expatriates) in Iskandar Malaysia (IM).

Prior to this, there were no preferential income tax incentive for knowledge workers in IM. This measure is aimed at attracting both Malaysian and foreign knowledge workers to reside, work and value-add in the promoted sectors in IM.

Definition of a Knowledge Worker

  1. Possesses at least:
    • A Bachelor’s or Master’s degree from a recognised university with more than 10 years of professional work experience in a qualifying activity; OR
    • A Ph. D. from a recognised university with at least 5 years of professional work experience in a qualifying activity (Refer to Schedule II).
  2. Must not have derived employment income at least two (2) years prior to date of application.

Qualified Knowledge Worker

Knowledge workers must apply to MOF, via IRDA, to opt for this tax rate.

  1. Employed by a designated company in Iskandar Malaysia between 24 Oct 2009 – 31 Dec 2020
  2. Submits application within a 1 year window period from date of employment commencement.
  3. Add-value (expert) to any of the eight (8) promoted sectors

Designated Company in Iskandar Malaysia

An IDR or MSCor BioNexus status company or any company conducting a qualifying (Refer to Schedule I) as its core business. The company must be located in Iskandar Malaysia.

Facilitation for expatriate’s Employment Pass by Iskandar Service Centre

In anticipation of the influx of foreign investors in Iskandar Malaysia, ISC has been working closely with the Immigration Department to facilitate the issuance of employment passes to the expatriates attached to these investors and local companies who may need to employ expatriates.

IRDA has been empowered by the Ministry of Home Affair to process and approve the expatriate’s Employment Pass for investors within the five promoted service sectors in Iskandar Malaysia. This is done through Iskandar Malaysia Expatriate Committee (IMEC), of which ISC is the Secretariat.

There are two categories of services offered by ISC:

  • DP 10 is theEmployment Pass issued by Malaysian Immigration to expatriates who work and draw salaries in Malaysia. The maximum validity of this pass is 24 months for each period. This Pass will enable the expatriate to live and work in Malaysia legally.
  • The application for DP 10 must be made by the employer.  In general, the main qualifying criteria are based on the “core business” of the company. Employers who fit within one or more of the following criteria are eligible to apply for DP 10 via IMEC:-
    1. IDR-Status Company or
    2. Approved Developer or
    3. Approved Development Manager or
    4. Company with Flagship Incentives Iskandar Malaysia (FIM) or
    5. Development / project / business within the following five key sectors recognized by IRDA as major and strategic in nature:-
      • Creative and its related field
      • Healthcare and its related field
      • Tourism
      • Logistics
      • Education
  • The criteria for the employer to qualify for Expatriate Post are:isc-microsite-16
  • The criteria for expatriates to qualify for DP 10 are:-
    1. The appropriateness of the scope of the job in relation to the company’s activity.
    2. Minimum monthly salary of RM5, 000.00
    3. Minimum education qualification of Diploma in any discipline relevant to the designated job.
    4. The applicant age is suitable for the job and has the relevant working experience.
    5. A recommendation letter from the related monitoring agencies is required if the company’s activity falls under the purview of these agencies.
    6. Release letter from a previous employer when switching to a new employer must be presented during application.
  • ISC also facilitates other types of application related to the expatriate’s Employment Pass
  • DP11 is a process of endorsement by Immigration Department to Expatriates who have successfully obtained DP10 approval via Iskandar Malaysia Expatriate Committee (IMEC)
  • Visitor’s Pass (Professional) can be issued to a foreigner with acceptable professional qualifications or specialized skills to enter Malaysia and take up professional work for short term period not exceeding twelve (12) month.
  • These pass holders are however prohibited from receiving a salary or any mode of payment in Malaysia.

This facility is accorded to the family members of the expatriate employment pass holders (DP 10).  The following are eligible for the Dependant Pass:-

  • Husband/wife.
  • Children under the age of 21.
  • Handicapped/disabled children.
  • Legally adopted children.