Following the conclusion of its pilot phase, TalentCorp has recently sent a reminder regarding the MyNext Onboarding and Internship Fulfilment under the 1:3 Internship Policy. The Ministry of Human Resources (KESUMA) has fully implemented the 1:3 Internship Policy (officially known as the Progressive Policy on Expatriate Contribution to Local Talent Development) across Malaysia.
Managed and overseen by Talent Corporation Malaysia Berhad (TalentCorp), this mandatory framework directly links corporate expatriate hiring approvals with the development of domestic talent. Impacted employers are required to provide structured, paid, and quality local internship placements under the National Structured Internship Programme (MySIP) framework based on their approved corporate expatriate headcount.
The policy is positioned as a strategic driver to strengthen Malaysia’s local talent pipeline, balancing cross-border business continuity with robust local capability building.
Who will be affected?
This policy affects:
- All employers endorsing expatriate Employment Passes (EP) in Malaysia across all three categories (EP Category I, II, and III), covering both new applications and renewals.
- Companies processing visas through major regulatory channels, including:
- Malaysia Expatriate Services Centre (MYXpats / ESD) [3, 15]
- Malaysia Digital Economy Corporation (MDEC) [3, 15]
- Malaysian Investment Development Authority (MIDA) [3, 15]
- Iskandar Regional Development Authority (IRDA) [3, 15]
- HR and Talent Acquisition teams who must now manage compliance timelines, university recruitment mapping, and centralized portal monitoring.
Background
The 1:3 Internship Policy was initially approved by the Malaysian Cabinet on 5 June 2024 to address the national demand for structured, work-based learning opportunities for local higher education and TVET students. Following an extended pilot phase that concluded on 31 May 2026, full nationwide implementation officially commenced on 1 June 2026.
Key policy drivers include:
- Bridging the industrial skill set gap between academic graduate outputs and evolving industry needs.
- Maximizing corporate sector contribution to national talent development by generating up to 100,000 quality local internship placements annually.
- Ensuring the strategic deployment of foreign expertise acts as a direct catalyst for localized knowledge transfer and graduate employability.
Impact
Key Impacts:
- Ratio-Based Internship Placement Quotas: Internship obligations are explicitly calculated based on the specific tier of the company’s endorsed Employment Pass (EP):
- EP Category I: 1 Expatriate = 3 local intern placements (1:3 ratio) [3, 8, 21]
- EP Category II: 1 Expatriate = 2 local intern placements (1:2 ratio) [3, 8, 21]
- EP Category III: 1 Expatriate = 1 local intern placement (1:1 ratio) [3, 8, 21]
- Elimination of the Automatic 2% Cap: The 2% total workforce arrangement is no longer a default or automatic alternative. Companies whose raw EP ratios demand an excessive volume of placements must proactively submit a formal merit-based appeal through the MyNext platform, subject to the full discretion of the TalentCorp secretariat.
- Mandatory Digital Onboarding & Tracking: Employers must register and activate their profile on the official MyNext Company Portal within 30 days of receiving their official TalentCorp inclusion notification.
- Expatriate-Intern De-coupling: Interns do not need to work in the same department or report directly to the expatriate whose visa triggered the quota. They can be allocated across any suitable commercial or operational function within the Malaysian entity.
Potential Risks if Not Prepared:
- Future EP Stalls or Refusals: While outstanding quotas do not invalidate or cancel an already endorsed active visa, a company’s historical fulfillment and compliance record will be given significant weight during the assessment of subsequent new or renewal EP applications.
- Operational Disruption: Failure to coordinate early student recruitment pipelines can lead to severe bottlenecks when multiple EPs are processed simultaneously.
- Loss of Financial Benefits: Failing to structure the placements according to MySIP quality guidelines forfeits a company’s eligibility to claim the double tax deduction incentive on internship operational costs.
Date of implementation
1 June 2026
Santa Fe recommendation
Santa Fe strongly recommends that employers implement the following measures to ensure full immigration and operational compliance with the 1:3 Internship Policy:
- Proactively Recruit Early: Do not wait for the formal TalentCorp notification email to land before setting up your talent pipelines. Employers can actively recruit local interns in advance; however, ensure you maintain internal tracking to accurately match these placements against your quota once the dashboard goes live.
- Audit Your Expatriate Headcount Math: Review your current volume of active and upcoming EP renewals across Tiers I, II, and III to calculate your raw internship liability. If the numbers disproportionately impact your local headcount, begin compiling your organizational data to file a 2% workforce allocation appeal via MyNext immediately upon onboarding.
- Adhere to the Onboarding Timeline: Ensure that your HR team accesses the company portal (MyNext portal) using your established ESD credentials and formally appoints your Internship HR Person-in-Charge (PIC) within the mandatory 30-day window from notification.
- Align Placements with MySIP Standards: To successfully clear your quota and unlock tax incentives, ensure all contracts mandate a minimum of 10 weeks duration and pay the national baseline allowance floors (RM500 or RM600, depending on the student’s level of study).
- Declare External Hires Properly: If you bypass the MyNext portal to hire directly from career fairs or university partnerships, remember that you must manually declare these students through the MySIP Direct Hiring module to have them legally recognized against your immigration quota.
Contact us
Please get in touch with us for further information or clarification:
Samson Poore
Immigration Manager — Malaysia
Santa Fe Relocation
+60 19 601 6900
samson.poore@santaferelo.com
Hema Jesani
Senior Manager Global Immigration
Santa Fe Relocation
hema.jesani@santaferelo.com
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