Malaysia tightens foreign worker hiring: Nepal told to recommend agencies meeting new standards

KATHMANDU: Malaysia has introduced strict new eligibility criteria for private recruitment agencies sending migrant workers from Nepal and four other source countries, signaling a significant shift in foreign labor intake procedures. A diplomatic letter sent by the Ministry of Foreign Affairs of Malaysia to the Government of Nepal has requested that only manpower companies meeting a set of ten mandatory standards be recommended for worker recruitment to Malaysia.

The letter was conveyed through the Embassy of Nepal in Kuala Lumpur and has asked Nepal to submit the list of compliant manpower agencies by Kartik 29, 2082 (November 15, 2025). The same notification has been issued to India, Bangladesh, Pakistan and Myanmar, the five major labor-supplying countries to Malaysia.

According to the Malaysian government, the policy aims to “rationalize the number of licensed private recruitment agencies permitted to facilitate recruitment and placement of workers from Nepal to Malaysia”, ensuring what it describes as constructive, ethical and transparent labor migration practices.

New 10-Point Criteria for Selecting Manpower Agencies

Only manpower companies that meet all of the following conditions will be considered eligible for sending workers to Malaysia:

1. Must have held a valid recruitment license for at least five years.
2. Must have facilitated the recruitment of at least 3,000 workers within the past five years.
3. Must have experience sending workers to at least three different countries.
4. Must have an office space of at least 10,000 square feet.
5. Must provide a certificate of good character for the company operator and key personnel.
6. Must not be involved in forced labor or labor exploitation cases.
7. Must not have any record of human trafficking.
8. Must not be blacklisted for labor law violations.
9. Must not have been prosecuted for embezzlement or financial crimes.
10. Must comply fully with ethical recruitment standards and Malaysian regulations.

The Ministry of Human Resources of Malaysia will finalize the selection after Nepal submits the verified list. Incomplete or non-compliant applications will not be considered.

Impact on Nepal’s Foreign Employment Sector

Nepal is one of the top labor source countries for Malaysia, particularly for sectors like manufacturing, plantation, hospitality, construction and services. However, Malaysia has largely halted worker intake in key sectors, especially manufacturing, for nearly two years, leaving tens of thousands of Nepali workers waiting for deployment and manpower companies struggling financially.

The labor agreement between Nepal and Malaysia has also remained unrenewed since Kartik 12 last year, contributing to significant uncertainty in the foreign employment market.

Industry experts say that with these new criteria, a large number of small and mid-sized manpower companies in Nepal are likely to be excluded from sending workers to Malaysia.

Recruitment agencies failing to meet the 10 criteria fear being pushed out of the Malaysian labor market entirely, while larger companies with longstanding operations may strengthen their market dominance.

Government Response in Nepal

Despite the diplomatic correspondence already reaching the Nepali Embassy in Kuala Lumpur, officials in Kathmandu state they are yet to receive the formal notification.

“We have not received the letter officially. The Government of Nepal will take a decision after receiving it,” said an official at the Ministry of Labor, Employment and Social Security.

The ministry is expected to coordinate with the Department of Foreign Employment (DoFE) to verify and shortlist manpower companies based on the criteria.

Broader Context

Malaysia, one of the most preferred labor destinations for Nepali migrant workers, has previously faced international criticism over labor exploitation and forced labor concerns, especially in glove factories and electronics manufacturing. The current policy is seen as part of Malaysia’s attempt to restructure its labor supply chain and address global scrutiny.

For Nepal, with foreign employment remaining a crucial source of household income, remittances and macroeconomic stability, any shift in Malaysia’s hiring policy significantly influences migration trends, foreign exchange reserves, and employment dynamics.

Meanwhile, labor migration stakeholders in Kathmandu argue that the government should negotiate to protect fair recruitment and guard against monopolies in the manpower sector.

The Malaysian government has expressed optimism that the policy will result in more ethical and regulated labor mobility, while Nepal now faces the challenge of deciding which companies qualify under the tightened selection framework.