One Nation, Three Jurisdictions: Navigating Malaysia's complex and fragmented immigration framework

When I get asked by a West Malaysian, "Why do I need a visa in Sarawak? Am I not a Malaysian in Malaysia?" It is indeed puzzling. Our post-colonial independence era holds the answers. By analogy to China's 一国两制 (Yīguóliǎngzhì) "one country, two systems", our one nation, three jurisdictions (four then, including Singapore) set up was a necessary compromise to unite under a federal system for independence and security. These situations are not unique. Similar analogies exist between Scotland and England, Taiwan & Hong Kong with Mainland China, Kalimantan and Java. The list goes on. 

There is a lot of history behind these autonomous region set ups. Frequent negotiations on devolved powers continue to this day, shaping key immigration policies under our one nation, three jurisdiction setup. Put in simple terms, these are marriages with prenups. For Malaysia, it was a 20 point agreement. Over time, central dominance also shapes the extent of separation and independence. Autonomy only persist if autonomous regions push for it. And in the case of Malaysia, Sarawak's insistence on autonomy is here to stay. 

Three jurisdictions, creating a fragmented talent mobility framework

West Malaysia has a separate expatriate talent policy from Sarawak and Sabah. Border security remains under federal control, while border entry autonomy is maintained by Sarawak and Sabah respectively. More recently, Sarawak is taking talent mobility and differentiation more seriously with a newly launched digital platform called ALLIANCE, that overhauled a dated manual visa application process into a modern centralised digital process controlled by the State. The Immigration, Labour and Management Unit (ILMU), newly set up 2021, is currently responsible for crafting Sarawak's distinct immigration policies and reports directly to the Premier's department. 

Different policies, different requirements, different decision makers 

One of the most jarring differences now between jurisdictions is the policy change for salary thresholds of expatriates. As of 1 June 2026, West Malaysia doubled expatriate salary thresholds after a short notice announcement in January 2026, sending many employers and expatriate into a panic of what this means for their future in Malaysia. For companies, this means a significant relook at their hiring budget, headcount relocations, and employment pass sponsorships in just under 5 months; and for expatriates, their career and family's future in Malaysia. In Sarawak, however, expatriate salary thresholds remain the same, at RM3,000 monthly for Employment Pass 2 (no dependents allowed) and RM5,000 monthly for Employment Pass 1 holders (dependents allowed). However, for Klang Valley based operations to shift to Sarawak overnight is a challenging task, especially when West Malaysian personnels are also subject to stringent immigration requirements on par with foreigners. 

MDEC (West Malaysia) or SDEC (Sarawak) for the Tech Industry 

If West Malaysia gets to build their own tech ecosystem led by MDEC, then Sarawak can also build a competing or complimentary tech ecosystem led by SDEC. Hence, why we have two separate DE Rantau Digital Nomad programs in Malaysia at the moment. One under MDEC, which allows nomads to stay in West Malaysia only, while the program under SDEC allows nomads to stay in West Malaysia and Sarawak (a complimentary approach). And while Sarawakian-based companies can apply for MD Status and benefit from the tax incentive framework, they can't hire foreign knowledge workers (tech expatriates) like West Malaysian-based companies can. The Malaysian Tech Entreprenuership Visa that attracts high performing founders or large portfolio investors is also only available in West Malaysia and not Sarawak or Sabah. 

Manufacturing with MIDA, Invest Sarawak, Invest Penang, Invest Selangor, Invest Johor 

If you're a foreign direct investor exploring manufacturing setups in Malaysia, there are many facilitating bodies and agencies depending on which supply chain you're in and where the best land and energy deals are. Data centers are in Johor, E&E is in Penang, Selangor is everything from F&B to logistics, and Sarawak is where the cheap and accessible renewable energy is, but key infrastructure is currently lacking. To a prospective investor, this can be very confusing. It's just our way of doing business. Viewed positively, we can argue that this creates healthy competition between states to constantly improve and become more business friendly. But it is chaotic. 

Siloed application processes for different industries, is this a good thing?

In March 2026, MIDA (for manufacturers) launched its own MIDA Expatriate System (MES) segregating manufacturing applications from the purview of the Expatriate Services Division. MDEC (for technology companies) also has its own application portal and a one stop center called the Expats Services Centre in Cyberjaya. The Resident Pass Talent (RP-T) is managed by Talentcorp via a separate process. Everything else falls under the Expatriate Services Division in Putrajaya serviced by MYXpats centre. 

While creation of dedicated immigration approval processes for specific industries can address immediate bottlenecks and inefficiency issues in those pipelines, it creates new problems, whereby companies can struggle to figure out where they fit. And as MDEC or MIDA requirements shape shift, it becomes increasingly unclear who qualifies for what. This creates a "kicking the ball" situation where you're passed on from one agency to the other, especially if your business sits at the parameters of these definitions. 

In my opinion, these setups only benefits larger companies that fall squarely within the purview of the facilitating agencies. SMEs are left behind. And collectively, SMEs form a big segment of the whole economy. Professional services like Relocation Management Companies (RMCs), Business Process Outsourcing (BPO) or Global Business Services (GBS), International law firms, Foreign Venture Capitalists, or niche consultancies are inadvertently left out, creating a gap in the market for key facilitation aspects for scalability and growth. 

Conclusion  

There is no "one size fits all" playbook for talent mobility in Malaysia. Companies really need to know where they want their talent to be based, the requirements to be based there, what access they'll have, and which ecosystem will benefit their footprint the most. The great thing about a setup like Malaysia is that ecosystems are mature because of deep localisation and customisation to attract defined FDI. Every region has their strengths and weaknesses. You'll have many options, which gets you better deals. Even in a small country like Malaysia, there is no dominant monopoly in one economic zone - and this is can be a real draw, albeit frustrating to navigate.  Our website and its contents are provided for general information purposes only and nothing on this website or in its contents is intended to provide professional advice. Please contact us at info@migratesafe.org or +6082-295175 for more information.