New Internship Rule May Be Bad For Business Say Trade Groups

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A pilot phase of the internship programme will run from February to December, before it is enforced next year. (Envanto Elements pic)
PETALING JAYA: A new rule requiring companies to provide internships for college and university students may result in added costs for businesses and scare off foreign investors, say interest groups.
The Malaysian International Chamber of Commerce and Industry (MICCI) and the Malaysian Employers Federation (MEF) said the rule could make Malaysia less attractive to multinational companies and hurt industries that rely on skilled foreign workers.
The rule requires companies to place up to three students in internships for every expatriate employed. A pilot phase will run from Feb 15 to Dec 31 before the policy is fully enforced from 2026,
MICCI president Christina Tee said the policy could place Malaysia at a disadvantage compared to Singapore and Vietnam, which have more business-friendly expatriate policies.
“Tying obligations to expatriate hiring may restrict talent mobility, making it difficult for MNCs to deploy high-level expertise when needed,” she told FMT. “We foresee companies, especially SMEs, facing challenges due to limited capacity and resources to implement the policy.”
The government has promised tax breaks and support through programmes like the paid and structured internship incentives programme and Ilham.
However, Tee said this might not be enough to cover the costs of running proper internship programmes.
MEF president Syed Hussain Syed Husman said the organisation did not agree that expatriate hires should be linked to internships, especially as companies would have to spend money and time training interns.
He said that supervising interns while managing expatriates would increase the workload of managers. “To link the employment of expats with placement of interns is very short-term thinking that may lead to self-destruction,” he said in a statement.
Hussain said many industries need foreign experts to help local companies learn advanced skills, and the policy could prevent companies from employing expatriates.
“The reality is that Malaysia needs the expats…not that the expats need Malaysia,” he said.
The human resources ministry said the new internship policy is aimed at helping 100,000 college and university students. The ministry said the policy will help students gain skills that will prepare themselves for the workplace. - FMT

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