New costs to hire Foreign Workers in Sarawak (2025)

As of January 2025, the Sarawak government announced the adoption of the Foreign Worker Transformation Approach (FWTA), which outlines a series of digitisation and regulatory changes to modernise the Sarawak's immigration processes. The goal is to improve efficiency, and promote transparency. But, it also comes with increased costs for employers in Sarawak.

As of 10 August 2025, the previous Monitoring System on the Employment of non-Sarawakians (MSEN) system will cease all functions, and Sarawak employers are expected to fully transition to the new Sarawakian and Non-Sarawakian Online Labour System (SANSOLS). SANSOLS is not new. It has been piloted by the Sarawak government since Q1 2025. However, the transition has been met with resistance by employers due to the uncertainty surrounding transferability of approved permits from the MSEN system.

In addition to this, employers should also take note of the new costs under SANSOLS. In particular, the approved permit charges of RM950 per pax. This is a new cost for every headcount approved to your company and it cannot be reduced once approved. Therefore, employers are advised to only apply for the real number of pax required for their business instead of overinflating the headcount request. Under the SANSOLS system, the Sarawak government has changed its approach and have been more open to meet the headcount request of companies. Unlike before, whereby the government will only approve 25% or 30% of the company's ask, the new approach will lead to more certainty on both sides. There are other additional costs being floated for consideration under the FWTA. In particular, the compulsory foreign worker ID requirement of RM315 per pax. Other costs include medical registration of RM30 per pax under the Sarawak Foreigners Health Information System (SAFTHIS), which mimics the FOMEMA system in West Malaysia. There is lack of clarity on the Visa with Reference (VDR) fees. Rumoured to be priced at RM215 per pax, it is unclear whether this is in addition to the current immigration levies or replaces it. VDR is a process typically managed by the Immigration Department and the fees are also set for each industry.

Overall, there has been deep concern expressed by various industry groups, including but not limited to the Sarawak Timber Association and the Sarawak Housing and Real Estate Developers over the increased cost of hiring foreign workers. Nevertheless, Sarawak's immigration challenges are unique to the State and these appear to be the costs involved in running an autonomous immigration system separate from the ecosystem in West Malaysia. Despite the increase in costs, there are also many hidden costs to an inefficient system, which can cost companies a lot more in the long run. The true cost of hiring workers without documents, or delays in compliance remains a burden on our economic growth.

That said, the current cost should be benchmarked to West Malaysia and neighbouring countries eventually to ease the burden of hiring for Sarawakian employers. Malaysian employers are paying the highest recruitment fees in the region to entice source country workers to choose this market and employers rarely get to retain workers due to more attractive salary elsewhere. Regional salaries are also highly sensitive to currency fluctuations. Malaysia's increase in minimum wage which extends to foreign workers has helped improve competitiveness, but it is never quite enough to keep up with our regional competitors, namely Singapore. Therefore, Malaysia and Sarawak included is used by the regional labour force as a first entry or first contract market, creating a highly disadvantaged situation of employers paying the most to secure the least qualified or experienced workers in the region.

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