share on
The extension aims to give employers more time to familiarise themselves with the policy requirements and plan their numbers. Employers are also encouraged to use the time to strengthen structured internship pathways.
Malaysia’s Ministry of Human Resources (KESUMA) has extended the pilot phase of the 1:3 Internship Policy to 31 March 2026, offering employers additional time to understand the framework, plan internship placements, and onboard to the MyNext platform.
The policy, introduced through Talent Corporation Malaysia (TalentCorp), links expatriate hiring with the development of local talent by requiring companies to provide three structured and paid internship placements for every expatriate hired under the National Structured Internship Programme (MySIP).
A quick recap: What is the 1:3 Internship Policy?
Announced in 2025, the 1:3 Internship Policy was introduced to address the growing demand for quality internship and work-based learning opportunities among Malaysia’s students.
According to KESUMA and TalentCorp, between 250,000 and 280,000 students enter the workforce annually, accounting for about 2% of the national workforce. The policy is expected to create more than 100,000 internship and industrial training placements each year, while ensuring that expatriate hiring contributes more directly to local workforce readiness.
The pilot phase initially ran from 15 February 2025 to 31 December 2025, with full implementation scheduled from 1 January 2026.
What the extended phase entails
The pilot phase has now been extended by three months, until 31 March 2026.
The extension aims to give employers more time to:
- Familiarise themselves with the policy requirements
- Plan internship numbers and structures
- Onboard and use the MyNext Internship platform
During this extended period, TalentCorp said it will continue working closely with employers, providing guidance, clarification, and hands-on support to ensure effective internships that benefit both organisations and interns.
Employers are also encouraged to use the additional time to strengthen structured internship pathways, deepen collaboration with education institutions, and contribute to the development of Malaysia’s future workforce.
How the policy works in practice
The 1:3 Internship Policy is expected to benefit 100,000 local students nationwide.
Under the policy, companies employing expatriates in Malaysia will be required to provide practical training placements to students from higher education institutions (HEIs). The move aims to strengthen the contribution of expatriate employment to national development by offering structured training opportunities that help local talent meet industry needs and become workforce ready.
Companies participating in the policy will also be eligible for tax relief incentives under MySIP, while supporting local students as they prepare to enter a competitive job market.
How the policy will be implemented
To support effective and comprehensive implementation, KESUMA outlined several key mechanisms.
For every approved Expatriate Employment Pass (EP) issued through the Malaysian Expatriate Service Centre (MYXpats) and the Malaysia Digital Economy Corporation (MDEC), companies will be required to offer up to three paid and structured industrial training placements to local students, based on a 1:3 expatriate-to-trainee ratio. Adjustments to the ratio will take into account a company’s workforce size and total number of employees.
The policy will only take effect after an expatriate receives EP approval and will not affect existing approval processes. Companies that comply may also be prioritised for future expatriate approvals.
Incentives and facilitation support
The policy does not involve additional costs for employers and will be supported through the KESUMA Practical Training Incentive (ILHAM) ecosystem.
This includes:
- MySIP: Allows employers to claim double tax deductions on monthly allowances paid to trainees, as well as related training, materials, and logistics costs
- HRD Corp Industrial Training Scheme: Enables companies to use up to 50% of their remaining levy to support industrial trainees through allowances and related training needs
- ILHAM platform: TalentCorp will act as a central coordination and facilitation body for industrial training placements, including outreach, advertising, and talent matching
Internship requirements by Employment Pass category
The number of required industrial training placements varies by EP category:
- Employment Pass I (EPI): Three training placements
- Employment Pass II (EPII): Two training placements
- Employment Pass III (EPIII): One training placement
If industrial training placements exceed 2% of a company’s total workforce, the minimum placement requirement will automatically be capped at 2%.
Scope of the pilot phase
During the pilot phase which started on 15 February 2025, the policy will apply only to tier one and tier two companies, to ensure effective monitoring and smoother implementation.
As lead coordinator, TalentCorp will work closely with higher learning institutions, TVET providers, industry players, international chambers of commerce, and relevant associations. The effort aims to strengthen collaboration between industry and academia, while supporting the development of a sustainable national workforce ecosystem.
KESUMA said the policy seeks to align with the MADANI Economic Framework, which focuses on sustainability, prosperity, and innovation to support economic growth, job creation, and the development of a competitive local workforce.
ALSO READ: Indonesia moves to tighten governance of its internship programme with Japan
share on
