Why Are So Many Foreigners Moving To Malaysia? What Does It Mean For Malaysians? | CNA Correspondent

Summary

Malaysia attracts people for markedly different reasons and circumstances: foreign entrepreneurs seek business opportunities, expatriates bring investment and consumer demand, while refugees flee conflict and persecution. Their experiences—and their effects on Malaysians—are sharply unequal.

Foreign businesses and local competition

Chinese-owned businesses are expanding in areas such as Kuala Lumpur’s Sunway Velocity. A Chinese-owned hair salon competes with low prices, long opening hours, and staff recruited from abroad. Chinese automotive chain Tuhu has also expanded rapidly, using an app, standardized pricing, and large-scale supply chains to offer competitive services.

Local industry representatives say such operators can put pressure on Malaysian businesses, particularly when they bring in workers and source most goods and systems from overseas. Some local operators acknowledge that foreign competitors have more efficient processes and that Malaysian firms need to adapt.

Calls for stronger rules

The Small and Medium Enterprises Association of Malaysia says it is not opposed to legitimate foreign businesses, but wants them to follow local rules and involve local workers and suppliers. It has called for a review of entry requirements, including social-impact assessments, to reduce the risk that small businesses are squeezed out. Suggested measures include stronger local-hiring and local-sourcing requirements.

Korean businesses and property pressures

Kuala Lumpur’s Solaris Mont Kiara is known as “Little Korea,” with Korean restaurants, shops, and services. Malaysia’s Korean community, which numbered more than 25,000 before the pandemic, fell to about 15,000 and is gradually recovering.

A Korean diplomatic representative says Malaysia appeals to Korean firms as a gateway to ASEAN, supported by its consumer market and familiarity with Korean culture. Foreign residents and businesses have helped drive demand in some neighbourhoods. This benefits landlords but may push rents beyond what local businesses can afford. Others argue that investment could spread to areas outside Kuala Lumpur.

Refugees’ precarious position

Rohingya refugee Aman Hussein, who fled Myanmar, describes relying on irregular day jobs and sometimes not receiving full payment. Refugees in Malaysia cannot work legally and may face exploitation, harassment, or detention.

Malaysia is not a signatory to the 1951 Refugee Convention or its 1967 Protocol. The UNHCR says Malaysia hosts more than 210,000 registered refugees and asylum seekers, over 90% of whom are from Myanmar.

A proposed refugee work system

Malaysia is developing a registration and documentation system to collect refugees’ biometric and personal data, with the stated aim of improving oversight and welfare. A pilot plan would match confirmed refugees aged 20–40 with labour shortages in sectors including manufacturing, construction, plantations, and services.

The government says this is not a path to permanent residency or citizenship, and stresses the need to balance humanitarian concerns with security. Employers would have to comply with labour laws, pay the minimum wage, and provide suitable housing. The UNHCR welcomes the plan as a practical way for refugees to contribute while they are in Malaysia.

Public concerns and policy tensions

Supporters say refugee employment could help address labour shortages and bring spending into the local economy. Critics favour tougher enforcement against undocumented arrivals and settlements; some call for deportations, though one person interviewed questions where refugees could be sent.

The report also notes criticism that Malaysia’s reliance on low-wage migrant labour can hold down wages and discourage automation and skills development. The government aims to reduce migrant workers’ share of the workforce from about 15% to 10% by 2030, while urging faster refugee resettlement abroad and tighter border controls.

Presenters and contributors

• CNA correspondent — Presenter and narrator; not named in the subtitles.
• Jason Lee — Chinese hairstylist and salon operator.
• Anne Wong — President of a local hairdressing association.
• Lim Thai — Local automotive-services industry participant.
• Unnamed representative — Head of the Small and Medium Enterprises Association of Malaysia.
• Han Young Jae — Commercial attaché at the Embassy of the Republic of Korea in Malaysia.
• Ken Wong — Malaysian hair-salon owner in Solaris Mont Kiara.
• Aman Hussein — Rohingya refugee.
• Unnamed asylum-rights advocate — Comments on the legal protections and risks faced by asylum seekers.
• Saifuddin Nasution — Malaysia’s home minister.
• Unnamed employer — Comments on the proposed refugee employment programme.
• Unnamed member of the public — Questions where refugees could be deported.