KUALA LUMPUR, 19 NOVEMBER 2025 — National President of the SME Association of Malaysia Dr. Chin Chee Seong said businesses continue to face severe delays, opacity and systemic obstacles when applying for foreign worker quotas, causing significant disruptions to their operations.
In a statement today, Dr. Chin noted that many companies reported waiting for long periods without receiving any clear outcome, leaving them unable to plan production, manpower or orders, and forcing them to operate under prolonged uncertainty.
“At present, foreign worker applications are only open to a limited number of sectors, resulting in many businesses not even having the opportunity to apply. Even for eligible sectors, the approval criteria are deemed excessively strict and disconnected from actual market needs, making it difficult for companies to obtain the required quotas, ” he said.
“The labour market structure further worsens the situation, as many positions, especially 3D(dirty, difficult and dangerous) jobs, still rely heavily on foreign workers and cannot be replaced by automation in the short term,” he said.
He added that the administrative process itself is equally problematic. Businesses are required to queue from as early as 3am just to obtain a slot for onsite interviews, yet departments remain understaffed, causing extremely slow processing.
“Moreover, interview results are often conveyed verbally without clear justification, while official emails are frequently delayed by several days. Businesses have no way to check on their application status or submit complaints, which severely disrupts production planning and financial arrangements,” he said.
Dr. Chin noted that Malaysia’s unemployment rate is already at a “full employment” level, meaning there is insufficient local labour to support industry expansion. In such a situation, prolonged delays in foreign worker approvals not only weaken business competitiveness but also diminish the country’s attractiveness to investors.
He urged the government to expand the range of sectors allowed to apply for foreign workers and enhance the transparency of the entire approval process, including setting clear processing timelines, publishing a transparent cost structure and improving online tracking systems.
“If an application is rejected, clear reasons must be provided. For approved applications, official documentation should be issued promptly to restore business confidence. At the same time, any proposal to reduce the foreign worker ratio to 10% must be implemented cautiously. Without alternative manpower or transitional measures, such a move will cause severe labour shortages, reduced capacity and higher costs, ultimately undermining business competitiveness,” he said.
“Additionally, the government must strengthen foreign worker governance, ensure worker welfare, curb illegal entry and simplify legal procedures to enhance the country’s image and investor confidence. Transitional support measures such as skills training subsidies, automation incentives and more flexible quota policies are also essential to help businesses upgrade while maintaining productivity and competitiveness,” he added.
Dr. Chin stressed that SMEs can no longer withstand prolonged uncertainty. Urgent reforms are needed to stabilise business operations and sustain Malaysia’s economic growth.
