With even Donald Trump now open to foreign knowledge talent, are Malaysia’s KL20 introduced passes attractive enough?

• Innovation Pass consolidates all knowledge worker visas
• Recognition in ecosystem that incentives be continually enhanced with stakeholders input

In a sign of just how critical the infusion of foreign talent is to a country’s competitiveness, even the anti-immigrant US presidential candidate, Donald Trump has changed his stance and said this week that he will allow international students graduating from American universities to apply for Green Cards, should he win the upcoming election. Stunning but also a dose of reality.

The Malaysian government is also well aware of this reality. One of the announcements that came out during the April 22-23 KL20 Summit was Malaysia’s aim to attract global unicorns to the country with the accompanying high-skilled and high-value jobs created by these fast growing companies, said Economy Minister, Rafizi Ramli during his speech. Rafizi mentioned the introduction of an Innovation Pass, VC Golden Pass and a Unicorn Golden Pass as newly introduced incentives for this purpose.

In a subsequent session at the summit, Razif Aziz, Malaysia Digital Economy Corporation (MDEC)’s Vice President and head of business services introduced the Unicorn Golden Pass and Innovation Pass with a high-level briefing. 

Razif did not speak about the VC Golden Pass as it is the result of cross government collaboration by the Ministry of Science, Technology and Innovation and championed by Securities Commission Malaysia which crafted the two incentives and two eligibility requirements as listed on the MYStartup website. 

“We hope that the tailor-made packages for Unicorn Golden Pass and Innovation Pass would be attractive to tech unicorns and industry giants to come to Malaysia, establish themselves here so that they can contribute to the ecosystem,” he said.

With two months having gone by since the KL20 Summit and with Trump’s announcement really putting a spotlight on the critical importance of welcoming foreign knowledge talent, DNA followed up with MDEC to get a better picture of what the three new passes offered. 

Proper execution could attract top global talent to Malaysia’s startup ecosystem, a key asset the country needs to strengthen as it tries to build momentum towards achieving its grand ambition of Kuala Lumpur becoming among the Top 20 Global Startup Ecosystems by 2030 based on the Global Startup Ecosystem Report by Startup Genome. 

The country is ranked in the 61 to 70 range in the 2024 rankings giving it a massive challenge to leapfrog 40+ spots over the next six years plus. 
 

Unicorn Golden Pass

As its name suggests, the Unicorn Golden Pass was specifically created to attract both emerging and established tech giants to establish themselves in Malaysia. Aside from the benefits listed above, a key feature is providing applicants with dedicated account managers to facilitate their needs and support applications while connecting them to relevant parties in the Malaysian startup ecosystem. 

The benefits listed may attract emerging startup founders but it is highly doubtful that any established tech company, or “tech giants” to quote one of the two objectives of the Unicorn Golden Pass, will want to relocate to Malaysia from the base which they have already achieved success. 

Such a move rarely happens and if Malaysia is serious about trying anyway, the benefits offered have to be substantially strengthened, especially in terms of market access as that becomes the primary goal of unicorns in today’s environment - ramping up revenue. Many will contend that in the current startup environment, ramping up revenue is the primary goal of any startup.

And for those who may offer Grab as an example, grab was nowhere near being a unicorn when it moved HQ from Malaysia to Singapore in early 2014 after Singapore’s Vertex Ventures became its first VC investor in July 2013, investing US$2.15 million (at a US$9 million pre-money valuation) with the holding company established in Singapore. 

The eligibility criteria, from a revenue perspective, is for applicants to demonstrate that they can achieve a valuation of at least US$1 billion and have a clear path to scale revenue above US$500 million by 2030.​ 

The latter is a steep bar indeed with Amelia Ong (pic), executive director OSK Technology Ventures Bhd commenting that while OSK Ventures applauds the initiative, “we believe it is important to provide an easier process for tech companies to choose Malaysia as their next base for expansion. For the next iteration, it will be beneficial if the eligibility criteria can include a lower revenue forecast threshold and for more incoming talent to support knowledge transfer and long-term growth of innovation.”

Further eligibility requirements are listed at the MYStartup website.
 

Innovation Pass, the holistic visa programme

MDEC describes the Innovation Pass as a holistic visa programme, which offers incentives for foreign entrepreneurs, tech talent, and VC professionals, attracting them to relocate to Malaysia and actively participate in the startup ecosystem. “We hope to offer Malaysia as a base of operations, to not only access the local market but also beyond it,” Razif said during his KL20 session.

In a table  provided to DNA, MDEC explained that the Innovation Pass builds on two knowledge worker passes that MDEC is already offering - the MTEP and EXPATS passes, “but we have enhanced it to make it more relevant to the market,” MDEC said.

The main enhancement is the introduction of a third category under MTEP, the Senior Management Pass catered to tech/VC C-suite or head of department level candidates with a duration of 5 + 5 years. Besides being eligible to bring in dependents, the individual’s spouse is provided the right to work in the country.  This was in response to popular requests made by foreign entrepreneurs, said MDEC. 

Essentially MDEC has used the introduction of the Senior Management category under MTEP, together with some enhancements as highlighted in red in the table above to consolidate all digital professional passes under the Innovation Pass, which it said will ease the facilitation of foreign entrepreneurs to start their business in the country.

A key feature added to the First-Time Founders category under MTEP is that first-time founders looking to start a tech business in Malaysia are eligible to bring not only dependents ie spouses and children, but also up to two co-founders into the country, which means the co-founders do not have to apply separately.

VC Golden Pass

As MDEC explained, with all knowledge worker passes now consolidated under the Innovation Pass, the VC Golden Pass sits under MTEP’s Tech Investor category with the same benefits enjoyed ie 5 + 5 years visa, spouse able to work and able to bring in five co-founders plus two more specific benefits from the Securities Commission (SC) ie:

Expedited registration approval with SC from 6 weeks down to 2 weeks, subject to meeting all requirements under SC's Focused Scope Assessment.
A support letter from SC to facilitate applications for senior management and staff relocating to Malaysia together with SC's approval for VC registration.

To be eligible, interested VCs must have existing global AUM (assets under management) of at least US$100 million (RM472 million).

While it is not known how well the three passes have been received by the intended target market, there is recognition among startup ecosystem players that their introduction must just be the start with regular updates to strengthen the incentives offered and loosen some of the eligibility requirements. The talent we are seeking to bring in are not short of options or offers. We have to work hard to ensure Malaysia’s offerings stand out.