After nearly three months of adapting business operations to the “new normal” under the Movement Control Order (“MCO”) and then Conditional MCO (“CMCO”), individuals and businesses in Malaysia were eager to find out whether the CMCO would be extended beyond its original end date of 9 June 2020. On 7 June 2020 Prime Minister Muhyiddin Yassin announced that the CMCO will be replaced by a Recovery MCO (“RMCO”) from 10 June 2020 until 31 August 2020.
The implementation of the RMCO will see the lifting of restrictions in stages, whilst focusing on the protection of higher-risk groups and enhanced public health. Significant emphasis has also been placed by Prime Minister Muhyiddin Yassin on regenerating the national economy.
The following newsletter is intended to provide an overview of key information regarding the operation of businesses under the new RMCO. We will firstly outline the measures introduced, with a primary focus on factors affecting businesses namely which businesses are now allowed to reopen and the manner in which businesses should operate under the RMCO. We will then address the latest changes to travelling restrictions and immigration rules applicable to foreign employees during the RMCO. Finally, this newsletter will explore the key initiatives for businesses under the new short-term economic recovery plan entitled “Building the Economy Together” released on 5 June 2020 to mitigate the consequences of the COVID-19 outbreak.
Under the RMCO, almost all businesses are allowed to operate, subject to strict compliance with recommended standard operating procedures (“SOPs”).
Although a minor number of businesses continue to remain prohibited, business operations for permitted businesses under the RMCO can return somewhat to normal:
Whilst some sense of normality is being resumed in workplaces, safety protocols and SOPs must be stringently adhered to. Such SOPs include ensuring procedures are in place to address health and safety measures against the COVID-19 pandemic, temperature screening at entry points to buildings and offices, the use of face masks and adequate disinfectant products, increased cleaning of the premises and the arrangement of shared workspaces and common areas in such a way that encourages social distancing and limited interaction between employees themselves and with clients or consumers.
In terms of health and safety protocols, capacity and operating hours, SOPs vary depending on the sector of activity. Such activity sectors mainly include manufacturing, professional services, financial services, construction, hotels, transportation and logistics, oil and gas, agricommodity and retail. Each company must therefore ensure that it complies with the sectorial SOPs established by the relevant regulatory authority, as found on Majlis Keselmatan Negara’s website.
Under the RMCO, the government has approved new travelling rules, specifically concerning interstate travel, and has updated immigration rules for foreign employees outside Malaysia.
The strict ban on interstate travel is lifted as a result of the RMCO, apart from travel to ‘red areas’, namely areas that remain under an enhanced movement control order. Domestic tourism is therefore permissible and encouraged again.
International travel, however, remains off the cards whilst Malaysia’s borders remain closed. Malaysians are still not permitted to travel abroad and the ability of both Malaysians and non-Malaysians to enter the country remains significantly limited. The ban on Malaysians travelling abroad will be in place until 31 August 2020, apart from some minor exceptions. The emphasis of Prime Minister Muhyiddin Yassin‘s speech was instead on kick-starting the national economy through reviving domestic tourism as a result of the relaxed interstate travel restrictions.
The Immigration Department of Malaysia issued on 10 June 2020 “Guidelines for the entry of Expatriate / Skilled Worker / Knowledge Worker Entering Malaysia for Key Posts and Technical Posts, and for Dependents and Foreign Maids” (the “Guidelines”). The expatriate definition includes Residence Pass-Talent holders, Employment Pass holders, and Professional Visit Pass holders.
The Guidelines authorise expatriates and their related dependant pass holders to enter Malaysia provided that they get an approval from the Director General of Immigration Department Malaysia (“DGIM”). The following steps must be observed to get such approval:
In addition to the above, an expatriate with an expired pass or a new employee who is currently stranded abroad is required to obtain a visa from the respective Malaysian Embassy / Consulate General / High Commission prior to entering Malaysia. As per usual, the company must also obtain an Approval Letter from the Expatriate Committee of the relevant Approving Agency for its new employee.
Once the DGIM’s approval is obtained, the foreign employee is required to comply with the following requirements before and after entering the country:
The full Guidelines, including those concerning dependents and foreign maids stranded abroad, can be found here.
On 5 June 2020 Prime Minister Muhyiddin Yassin unveiled a Short-Term Economic Recovery Plan (or “PENJANA” for Pelan Jana Semula Ekonomi Negara) worth MYR 35 billion. PENJANA is the fourth such economic stimulus plan introduced by the Malaysian government to tackle the economic difficulties caused by the COVID-19 Pandemic. Previous Economic Stimulus Packages (“ESPs”) were announced on 27 February, 27 March and 6 April 2020 respectively. Our newsletters on the first two Economic Stimulus Packages can be found here and here.
The government’s proposed approach takes the form of six steps: Resolve, Resilience, Restart, Recover, Revitalise and Reform. PENJANA comes under the fourth step and aims to support the Malaysian economy in the so-called “new normal”. It does this by addressing current issues through three pillars, namely: empowering people, propelling businesses, and stimulating the economy. To achieve these objectives the Minister of Finance proposed 40 initiatives in the published PENJANA booklet (which can be found here).
In this newsletter we will detail some of the key initiatives from a business perspective. However, the PENJANA booklet only provides an outline of the measures to be taken and further details are expected from the Malaysian authorities imminently.
The “Empowering People” pillar seeks to secure and enhance employment and training through 11 measures, which include the following:
The second pillar of PENJANA aims to sustain operations and stimulate consumption. Consumption has greatly shifted to e-commerce during the period of the MCO and CMCO to the detriment of many traditional businesses. Some of the significant measures under this section are as follows:
Finally, the pillar “Stimulating the Economy” provides measures to attract new investors, support targeted sectors of the economy and promote the consumption of local products and services in order to maintain Malaysia as a preferred destination for foreign investment. Among the 15 measures included under this section, businesses are mainly benefitting from: