How Expats in Malaysia Should Handle Money: Banking, Tax, and Sending Money Home

Managing money as an expat in Malaysia requires getting three things right from day one: opening the correct bank account, knowing your tax status, and understanding how to move money out of the country. Malaysia has clear rules on all three, and getting them wrong costs real money.

This guide covers what LHDN, BNM, and EPF actually require of foreign workers and expatriates, with specific figures for 2025 and 2026.

Setting up your Malaysian bank account

Most major Malaysian banks, including Maybank, CIMB, Public Bank, and RHB, open current and savings accounts for foreigners who hold a valid Employment Pass, Professional Visit Pass, or long-term social visit pass. You typically need:

A valid passport
Your Employment Pass or relevant immigration document
Proof of address in Malaysia (tenancy agreement or utility bill)
An employer letter in some cases

Foreign Currency Accounts (FCA): Bank Negara Malaysia permits non-residents to open both ringgit accounts and foreign currency accounts with any licensed onshore bank. Funds in an FCA can be remitted freely into and out of Malaysia, subject to the bank’s own due diligence process (BNM Foreign Exchange Policy). This is particularly useful if you receive salary or income partly in a foreign currency.

Digital banks such as GXBank, Aeon Bank, and KAF Digital Bank have simplified onboarding. However, some still require physical verification for non-citizens, so check the specific bank’s requirements before applying.

Once your account is active, set up a monthly budget system so your ringgit income is properly allocated from the first pay cycle.

Understanding your tax residency status

Your tax treatment in Malaysia depends almost entirely on whether you qualify as a tax resident. The threshold is 182 days in a calendar year.

Status	Days in Malaysia per year	Income tax rate
Tax resident	182 or more	Progressive 0% to 30% (same as Malaysians)
Non-resident	Fewer than 182	Flat 30% on all Malaysian-source income
Non-resident (short-term employment, 60 days or fewer)	Any	Exempt from Malaysian tax

Source: LHDN Tax Treatment of Residents and Non-Residents, updated 2024.

How the 182-day rule works

Days are counted as physical presence in Malaysia, not necessarily consecutive. If you arrive mid-year and accumulate 182 days by 31 December, you are a resident for that year. Your employer will usually determine your withholding tax category, but you are ultimately responsible for filing correctly.

Practical tip: If you are here for the first time, your residency status for year one is often unclear until the year closes. Ask your HR or tax agent whether your employer is deducting at the resident or non-resident rate.

Foreign-sourced income

From 1 January 2022, income from overseas remitted into Malaysia by a tax resident is subject to Malaysian income tax. Non-residents are taxed only on Malaysian-source income. If you receive rental income or investment returns from your home country and remit them to your Malaysian account, and you are a resident, that income is taxable in Malaysia (LHDN Guidelines on Foreign-Sourced Income, 2022).

Filing your taxes

Tax residents file Form BE (salaried individuals) or Form B (with business income). Non-residents file Form M. The tax year follows the calendar year, and filing deadlines are 30 April (no business income) or 30 June (with business income) the following year.

EPF contributions: mandatory from October 2025

Until September 2025, EPF contributions for non-Malaysian employees were entirely optional. That changed with a significant policy update.

Effective 1 October 2025 (contributions beginning November 2025), EPF contributions became mandatory for non-Malaysian citizen employees, with the following rates:

Contributor	Rate
Employee	2% of monthly wages
Employer	2% of monthly wages

This applies to employees holding an Employment Pass, Professional Visit Pass, Residence Pass, Long-Term Social Visit Pass, or Visitor’s Pass (excluding foreign domestic helpers). The minimum eligible age is 14 and the maximum is 75 (KWSP, 2025).

Can you withdraw your EPF when you leave?

Yes. Non-Malaysian EPF members who are leaving Malaysia permanently can apply for a full withdrawal of their EPF savings, including both their own contributions and the employer’s. This is called the Leaving Country Withdrawal. You apply through the EPF website or any EPF counter with your passport and immigration documents.

If you contributed voluntarily before October 2025, you were already eligible for this withdrawal upon departure.

Sending money home: remittance from Malaysia

Remitting money out of Malaysia is straightforward under BNM’s current foreign exchange framework. There are no restrictions on the amount a resident or non-resident can remit abroad from their own earnings, though your bank or remittance provider will apply standard anti-money-laundering checks.

Common remittance options

Channel	Typical transfer time	Approximate cost
Bank telegraphic transfer (TT)	1 to 3 business days	RM10 to RM35 per transfer plus exchange rate spread
Licensed money changers (e.g. Merchantrade, MoneyMatch)	Minutes to 24 hours	Lower spread than banks, small flat fee
International remittance apps (e.g. Wise, Instarem)	Minutes to 1 business day	0.4% to 1.2% of transfer amount
Post Office (Pos Malaysia)	1 to 3 days	Varies by corridor

All providers operating in Malaysia must be licensed by BNM. You can verify a provider’s licence on the BNM Financial Consumer Alert list at bnm.gov.my.

What to watch for

Exchange rate markup: Banks often quote rates 1.5% to 3% worse than the mid-market rate. Dedicated remittance services and apps typically offer tighter spreads.
Correspondent bank fees: A bank TT may deduct additional fees mid-route. Ask whether the fee is SHA (shared), BEN (beneficiary pays), or OUR (you pay all fees) before confirming the transfer.
Monthly wage remittance for certain pass types: If you hold a Temporary Employment Visit Pass (foreign worker category), your employer may be required to remit a portion of your salary via a designated channel. Check with your employer if this applies.

For a broader look at managing ringgit costs day-to-day, see our guide to reducing everyday spending in Malaysia.

Beyond EPF, most employees are covered by two PERKESO schemes:

SOCSO: Provides work injury and invalidity coverage. Foreign workers on employment passes are typically covered for Employment Injury Insurance only.
EIS: Provides temporary financial assistance if you lose your job. Foreign workers are generally not eligible for EIS benefits.

Confirm with your HR department which deductions apply to your pass category.

Key takeaways

You become a Malaysian tax resident once you have been physically present for 182 or more days in a calendar year, and you pay the same progressive income tax rates as Malaysians.
Non-residents pay a flat 30% tax on Malaysian-source income with no personal reliefs.
Foreign-sourced income remitted to Malaysia is taxable if you are a tax resident (effective 2022).
From October 2025, EPF contributions are mandatory for most non-Malaysian employees at 2% each from employee and employer.
You can withdraw your full EPF balance when you leave Malaysia permanently.
Remitting money home faces no BNM-imposed limits on amount, but compare exchange rates and fees across banks, licensed money changers, and remittance apps before you send.
All bank accounts and remittance providers must be licensed by BNM.

Frequently asked questions

Q: I arrived in Malaysia mid-year. Am I a resident for this tax year? A: It depends on how many days you accumulate by 31 December of that year. If you reach 182 days before year-end, you are a resident for the entire year and entitled to all personal tax reliefs. If you will not reach 182 days, you are a non-resident and pay a flat 30% rate. Your employer adjusts withholding accordingly.

Q: My employer does not deduct EPF from my salary. Is that legal after October 2025? A: If you hold an Employment Pass or one of the other qualifying pass types, both you and your employer are legally required to contribute 2% each from the November 2025 contribution month onward. If your employer is not deducting and remitting EPF contributions, they are in breach of the EPF Act. You can report this to KWSP via the official portal at kwsp.gov.my.

Q: Is there a limit on how much I can send home each month? A: BNM does not impose a specific cap on remittances from personal income for residents or non-residents. Your bank or remittance provider may have their own per-transaction or daily limits, and transactions above certain thresholds require source-of-funds documentation as part of standard anti-money-laundering checks.

Q: Do I need to declare my overseas income if I have investments back home? A: If you are a Malaysian tax resident and you remit overseas investment income (dividends, rental, capital gains) into Malaysia, that income is taxable from 2022 onward. Income that stays overseas in a foreign account and is never remitted to Malaysia is not subject to Malaysian tax. Keep records of what you remit and from which source.

Q: I am leaving Malaysia at the end of my contract. What do I do with my EPF? A: Apply for a Leaving Country Withdrawal through the EPF website or at any EPF branch. Bring your passport, work pass, and evidence of departure. EPF will pay out your full Account 1 and Account 2 balances. Process the application before your pass expires to avoid complications.

Educational content only, not financial advice. Verify current figures with official sources.