What you should know about the upcoming 1:3 Internship Policy in Malaysia

Through the implementation of the policy, more than 100,000 internship or work-based learning placements can be created annually, which in turn would strike a balance between expatriate needs and the development of the industry-ready local talent.

Malaysia's Ministry of Human Resources (KESUMA) has introduced the 1:3 Internship Policy through TalentCorp, with the aim to align expatriate hiring with local talent development. Starting 15 February 2025, it will be mandatory that companies offer structured, paid, and quality internship placements under the National Structured Internship Programme (MySIP) for every expatriate hired.

Set to take place from 15 February 2025 to 31 December 2025 for the pilot stage, the policy enables local talent to gain industry-relevant experience, enhance workforce readiness while companies get to benefit double tax deductions for incurred costs in internship programmes. The official implementation will take place from 1 January 2026.

In a series of frequently asked questions, the Ministry and TalentCorp highlighted that the need to implement the policy lies in the growing need for quality internships or work-based learning opportunities for 250,000 to 280,000 students who make up 2% of the workforce. Through the implementation of the policy, more than 100,000 internship or work-based learning placements can be created annually, which in turn would strike a balance between expatriate needs and the development of the industry-ready local talent.

The following groups will benefit from the 1:3 Internship Policy:

1. Students of technical and vocational education and training (TVET) and higher education institutions undergoing industrial training during their studies at the Bachelor's, Diploma, or Certificate Level.
2. Employers and companies that have approval for expatriate employment passes.
3. Industry and international chambers of commerce
4. Relevant ministries and government agencies

With the pilot phase taking place in less than a month, HRO has compiled a list of important notes to understand more about the 1:3 internship policy.

Compliance eligibility and requirements

Companies that have been granted approval for expatriate employment passes under the Malaysia Expatriate Service Centre (MYXpats) and Malaysia Digital Economy Corporation (MDEC) have to offer three internship or work-based learning placements for local talent (1:3 ratio). Adjustments to the ratio may be based on the company’s workforce size.

The policy applies to every expatriate Employment Pass (EP) approved, namely Employment Pass I (EPI), Employment Pass II (EPII), and Employment Pass III (EPIII).

The pilot phase, effective 15 February 2025, applies to companies under category tier 1 and tier 2, which hire expatriates in their operations.

Special conditions and exemptions

The following companies or organisations that meet the following requirements are excluded from the policy:

1. New companies that have been operating in Malaysia for less than two years
2. Companies with Representative or Regional Offices (RERO)
3. Companies that receive tax exemptions from the government, especially in key sectors like digital and energy
4. Other exemption requests may also be considered by the relevant committee based on feedback from the trial phase of the policy

Types of interships that qualify for the policy

Any internship placements that qualify under the MySIP will automatically be under the 1:3 internship policy. The company must offer a minimum structured internship placement of 10 weeks with a minimum monthly pay or RM500 or RM600 based on the level of study.

The internship programme has to be endorsed by TalentCorp and all interns and programme must follow those specified under the MySIP.

Application and approval process

The policy will be implemented through TalentCorp’s online platform, MyNext Internship. This platform will be tied to the Immigration Department of Malaysia’s Expatriate Services Division (ESD) platform for expatriate-related passes. With this collaboration, the government will be able to identify job demand trends through the application data and 360-degree evaluation of industrial training.

Companies have to provide a quota of internship placements for local students from public and higher education institutions and TVET based on the ratio as follows:

Source: TalentCorp 1:3 Internship Policy FAQ

Effects on expatriate employment approval process

Overall, the duration and approval requirements of the requirements of the expatriate employment passes will not be affected as the policy will only be in effect after the completion of the pass approval.

Additionally, companies do not need to provide proof of internship placements to apply or renew passes as information will already be captured with the issuance of the Letter of Endorsement under MySIP. After which, the details of the internship will be updated to the ESD system for future reference.

Resources or support for companies and students

An invitation will be offered to companies to list internship placements under the MYSIP which provides a double tax deduction on expenses incurred on interns. Industrial trainees are to be paid a monthly wage allowance of at least RM500 or RM600 according to their level of study during the period of their training which should last at least 10 weeks.

For further enquiries, companies may contact the secretariat at mysip@talentcorp.com.my or visit the TalentCorp and MyNext websites for more information.

Upon the completion of the pilot phase, any further information or updates will be shared accordingly by TalentCorp and KESUMA.

---

HR and business leaders across Malaysia welcome the 1:3 Internship Policy

Since the introduction of the policy, HR and business leaders in Malaysia have shared their views on what the policy could mean for companies, and how they plan to integrate the policy into their existing initiatives.

Highlighting the policy's alignment with his company's talent-building objectives, Lim Chee Gay, Managing Director, The Access Group, said:

"This policy strikes the right balance between attracting global expertise and nurturing the next generation of Malaysian professionals. At Access, we have an Early Careers Programme that provides internships to undergraduates, enabling us to build a sustainable talent pipeline for our current positions and future expansion.

"We are proud to integrate the principles of this policy into our initiatives."

On his end, Farid Basir, Group Chief People Officer, MBSB, emphasised the policy's strategic fit:

"As we recruit expatriates to address critical skill gaps, this policy is perfectly aligned with our objectives. We are launching our own structured internship programme, and the 1:3 Internship Policy ensures we play a pivotal role in empowering local talent while meeting global business needs."

Meanwhile, Rina Chanco, People Vice President, Coca-Cola Singapore, Malaysia, & Brunei, shared that she personally loves the idea, noting that it "emphasises borderless talent opportunities and reflects a clear intent for synergistic partnerships between academia and businesses."

"We are actually refining our Student Internship Programme and will definitely integrate the principles of this policy with TalentCorp to further enhance its impact,", she added.

Finally, respected HR veteran Datuk Nora Manaf, former Group Chief Human Capital Officer of Maybank, commended the initiative's focus on building and nurturing future-ready talent in the country, calling it a "bold and forward-thinking step toward addressing Malaysia’s evolving workforce needs."

She shared: "By linking expatriate hiring to structured internships, it not only creates opportunities for local students but also strengthens the overall talent ecosystem."