Prime Minister Of Malaysia Announces Revised Returning Expert Programme

"Equally importantly, to promote the return of Malaysian professionals working abroad, TalentCorp will now take the lead on our Returning Experts Programme, the programme parameters and qualifying criteria of which have been revised to better meet the needs of the Economic Transformation Programme.(ETP)," said the Prime Minister in a speech at the Invest Malaysia 2011 conference today.

The REP was originally introduced in 2001 and over the 10 years, a total of approximately 750 Malaysians were approved and returned under the programme. Applicants are approved based on qualifications held and overseas work experience.

The REP has been revised to better meet the needs of the economic transformation and the main revisions involve:

• The qualifying criteria now places a greater emphasis on relevant work experience as opposed to qualifications. Diploma holders with at least 10 years of overseas work experience can now qualify for the REP if they have the relevant industry experience in a National Key Economic Area (NKEA). (Previously the minimum qualification required to be eligible was a degree in a relevant field)
• The incentive of up to two tax-free vehicles is now strictly limited to locally assembled vehicles. Previously, this incentive applied to imported vehicles as well.
• Returning Malaysian professionals who qualify under the REP will now be eligible for a transitional income tax incentive, which accords a flat income tax rate of 15% for five years (as opposed to prevailing progressive scale rates of income tax).

The announced revised incentive package takes immediate effect, in that REP applications submitted from today onwards will be eligible for the incentive on locally assembled cars and the new transitional income tax incentive. Other previous incentives of the REP still remain, such as the tax exemption for all personal effects brought into Malaysia, enabling the applicant?s spouse and children to receive Permanent Resident status within six months of application and allowing the children to study in International Schools.

The rationale for the transitional income tax incentive is to better target higher value talent and to assist with the adjustment to income on returning to Malaysia. The incentive only applies to employment income and for the first five consecutive years following return to Malaysia. The new incentive can be claimed commencing the year of assessment 2012. Further implementation guidelines and details will be issued in due course.

The announced enhancements to the REP come on the back of the recent launch of the Residence Pass on 1 April. The REP is targeted at attracting back highly-skilled Malaysians currently working abroad, while the Residence Pass aims at attracting and retaining top foreign talent. The Residence Pass is an enhancement of the employment pass, providing expatriates with a longer tenure of up to 10 years and greater flexibility in changing employment. The Residence Pass has been introduced in conjunction to efforts by the Ministry of Home Affairs to enhance terms of the employment pass, including allowing for a tenure of up to 5 years.

"Malaysian professionals from abroad and top foreign talent complement local Malaysian talent by providing a diversity of expertise and experience. In an increasingly knowledge-intensive economy, the diversity of our talent pool fuels the exchange of ideas, which raises the productivity of all talent, including Malaysian talent," TalentCorp said in a statement issued today.

For more information on the Returning Expert Programme and the Residence Pass can visit https://www.talentcorp.com.my, email rep@talentcorp.com.my or telephone 03-2119 0160 to learn more.