Business travel: Risky business?

29 July 2019
By Lim Phing Phing (Director) & Cynthia Wong (Senior Manager), Global Mobility Services, PwC Malaysia

International business travellers continue to top the list as one of the most risky groups in the world of global mobility.

Recognising that inbound business travellers and tourism could pour millions of dollars into the Malaysian economy, Malaysia allows visitors with valid passports from 160 countries to enter Malaysia freely without a visa up to 90 days. Visitors receive a short-term Social Visit Pass stamped with the duration of the visa-free period upon arrival. 

A Social Visit Pass entry allows them to remain in Malaysia for various reasons, from tourism to attending business meetings, surveying business opportunities and auditing a company’s accounts.

Could such relaxed visa rules for travellers and visitors to Malaysia encourage businesses and employers to adopt an indifferent attitude towards repeated business travels undertaken by their employees to Malaysia?   Should such hassle-free travel be seen as a safety net or a “trap door” for immigration authorities to increase scrutiny and crack down on visiting professionals and digital nomads? The growing trend of digital nomads and 'anywhere workers' in particular indicates that there is a wider pool of people that could come under the scrutiny of immigration authorities.

When should you be getting a work permit?

In the current digital age and borderless environment, it’s not always easy to make out the lines between attending business meetings and actually doing business in Malaysia. This puts the onus on businesses and employers to thoroughly evaluate the activities carried out by employees and professionals during their business visits. 

Where the activities carried out in Malaysia are considered part of their overall employment role and profession, such as implementing a software system, or data gathering and investigating client processes, the business visit then becomes a work visit - requiring a work permit application to facilitate the performance of these activities in Malaysia. 

While visiting professionals do not receive their salary in Malaysia, this is in fact one of the main criteria for obtaining a short-term work permit. It’s also important to remember that the length of stay in Malaysia is not the main factor in the application of a work permit. The purpose and nature of the visit is the main determinant. So even if the job requires one to fly in and out of the city frequently for short visits, this does not free the individual from his/her immigration obligations.   

To err on the side of caution, foreign experts or employees who are invited to Malaysia for specific work purposes should obtain at least a Professional Visit Pass to facilitate their frequent visits and short-term travel.  

A Professional Visit Pass allows foreigners to enter and remain in Malaysia to perform specific services for a short period in Malaysia with a Malaysian organisation on behalf of an overseas entity. This has to be sponsored by an organisation incorporated or registered in Malaysia. The application needs to be approved by the immigration authorities before arrival.  

While it may be more convenient to evade immigration rules using the visa-free route in the short-term, businesses establishing or expanding their presence in Malaysia may be taking on a financial and reputational hit that they cannot afford. This includes, amongst other things, fines as high as RM50,000, tax risks, detainment and deportation of employees or professionals from Malaysia.  

Hence, every “classic” business trip should be examined to determine whether a short-term work permit is necessary to curtail the inherent immigration risks. While one might argue that this is open to the immigration authorities’ interpretation of whether the nature of the activity constitutes work or not, immigration policies and practices change over time; what has been allowed in the past may not necessarily be acceptable under the current stricter immigration environment. 

For any further queries, speak to us today. 

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Lim Phing Phing

Lim Phing Phing

Director, Global Mobility Services, PwC Malaysia

Tel: +60 (3) 2173 1651

Cynthia Wong

Cynthia Wong

Senior Manager, Global Mobility Services, PwC Malaysia

Tel: +60 (3) 2173 3180

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