Malaysia reopens its labor market for Vietnamese

After a halt from February 2016, the Malaysian government has welcomed a new workforce from foreign countries including Vietnam, which has a track record of sending large numbers of laborers to ASEAN’s third largest economy.

The green light issued by Malaysia's Ministry of Foreign Affairs on August 24 applies to workers in three sectors- manufacturing, construction and cultivation.

In February 2016, Malaysia's government temporarily stopped granting work permits to foreigners, including Vietnamese, to review the status of foreign workforce employed in that country and re-evaluate tax policy for foreign employees.

The move has disruped Vietnamese labor export to Malaysia in recent months. The total number of Vietnamese going to Malaysia for work in the first eight months of this year reached only 1,762 while the annual average figure is about 7,000.

The Vietnamese government started labor exports to Malaysia in April 2002. After nearly 15 years, there are approximately 60,000 Vietnamese laborers in this ASEAN’s economic pillar.

With relatively low fee (from US$1,000 to US$1,200 for a Vietnamese laborer) and low requirements for skills, qualification and language, Malaysia has been considered as a suitable labor market for Vietnamese rural workers, especially low skilled ones in mountainous areas and ethnic minorities. 

Vietnam's annual average income was US$2,100 last year, according to the World Bank (WB).

Vietnamese laborers participate in all sectors of Malaysian economy excluding security. Manufacturing attracts the highest number of Vietnamese workers, with seafood processing, electronics, mechanics being the most popular.

Women laborers from Vietnam are often recruited in textile sectors alongside the service sector as house maids, hotel maids to waiting staff or even gold artisans. Vietnamese workers also contribute largely to Malaysian farming and agriculture sectors.