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Malaysia targets 10% foreign worker dependency by 2030
🇲🇾 Malaysia /Economy & Trade

Malaysia targets 10% foreign worker dependency by 2030

From Utusan Malaysia · () Malay

Translated from Malay, summarized and contextualized by DistantNews.

At a glance

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  • Malaysia aims to reduce its foreign worker dependency to 10% by 2030, down from 13% currently.
  • The government encourages businesses to invest in automation and improve efficiency instead of relying on cheaper foreign labor.
  • This policy supports Malaysia's goal of becoming a high-income nation.

Malaysia is committed to reducing its reliance on foreign labor, maintaining the current cap at 13% of the total workforce and aiming to lower it to 10% by 2030. The government views this as a strategic move to push businesses toward greater automation and efficiency.

Deputy Minister of Investment, Trade, and Industry, Sim Tze Tzin, emphasized that Malaysia will not increase its dependence on foreign workers, even with business demand. "This is a set policy. We want businesses to understand the importance of automation, the importance of developing value chains, and improving their processes; they need to boost their company's efficiency," he stated.

This is a set policy. We want businesses to understand the importance of automation, the importance of developing value chains, and improving their processes; they need to boost their company's efficiency.

— Sim Tze TzinExplaining the government's policy on foreign worker dependency.

The underlying principle is that businesses overly reliant on cheaper foreign labor are less likely to invest in technology and process improvements. Malaysia's labor productivity reached RM104,556 per worker in 2025, with hourly productivity around RM45.50. The nation is striving to transition from a middle-income to a high-income economy, a goal Sim believes is achievable with the right policies and sustainable economic growth.

To support this transition, the government is actively assisting businesses in upgrading their value chains. This includes providing incentives for automation, process improvements, grants, and soft loans, alongside support from various agencies to boost productivity. The Malaysian economy showed robust growth in the second quarter of 2026, expanding by 6.0% year-on-year, with the electrical and electronics sector benefiting from strong exports driven by AI and technology.

We are continuing on the trajectory and we continue to do the right policies; we will achieve high-income nation status in the next few years. This is what we (the government) are working on in terms of policy.

— Sim Tze TzinExpressing confidence in Malaysia's economic goals.
DistantNews Editorial

Originally published by Utusan Malaysia in Malay. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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