KL dangles 5-year visa to woo expat finance talent

Analysts say move is helpful but will not give Malaysia a critical advantage

By Lester Kong, The Straits Times, 14 Jun 2013

IN A move to boost the financial services sector, Malaysia has introduced a five-year multiple entry visa for qualified foreign business investors and fund managers.

"Over the coming years, we will work to open up our markets to a wider spectrum of individuals, communities and businesses," said Prime Minister Najib Razak, who made the announcement yesterday at an international investment seminar.

"We would like new investors into the region to seriously consider using Malaysia as their springboard into Asean."

The move adds to various government initiatives in recent times to ease the way for skilled foreign workers to work long-term in Malaysia. Currently, most foreigners need to have a two-year employment pass applied for by their employer.

In December last year, the government gave 10-year residence passes to at least 1,600 top corporate leaders in various fields from overseas.

In April this year, the immigration department launched an expatriate services division specifically to serve expatriates hired to work locally.

The new multiple entry visa is another move to help skilled foreign workers avoid the tedious application process for regular two-year employment passes.

Datuk Seri Najib's long-term goal is to raise the gross national income to US$530 billion (S$656 billion) by 2020, so Malaysia can qualify as a high-income economy under World Bank standards.

The government has been steadily liberalising the finance sector. In 2009, it began allowing foreigners to own up to 70 per cent equity in financial institutions, excluding commercial banks. Previously, the figure was capped at 49 per cent.

A government agency, TalentCorp, was formed in January 2011 to lure back skilled Malaysians working overseas. The step was taken to reverse a brain drain that has seen more than 300,000 Malaysians with tertiary education leave for greener pastures abroad.

Some analysts say introducing a new multiple entry visa will not make a noticeable splash unless it comes with higher pay and fringe benefits such as housing and tax breaks.

"Visas play a minor role in spurring the internationalisation of business," said Dr Shankar Chelliah, an international business analyst at Universiti Sains Malaysia in Penang. "These administrative measures might be helpful, but won't have a big impact. We need to look into many other factors to seriously get investors to come."

He pointed out that Vietnam, the region's fastest-growing economy, offered incentives such as rent-free factory land for foreign businesses, but only if they employed locals.

Recruiters of top-tier financial executives note that senior foreign hires are rarely employed for as long as five years, so a five-year visa, though helpful, would not give Malaysia a critical advantage.

They believe employers will still have to prove why they need to hire a foreign financial expert before the visa is approved.

"Some have reported a lack of experienced local fund managers in Malaysia. This move could help to alleviate the shortage," said Mr E.K. Cheah, who runs Aspac Executive Search in Kuala Lumpur.