KUALA LUMPUR,. The problem is real. Immigrants are taking over many small- and medium-scale businesses in strategic locations and Malaysians are allowing it to happen right under their noses.
However, the Immigration Department is going all out to prevent this from spiralling out of control.
The immigrants, the authorities said, were abusing their work permits by moonlighting in other sectors or abandoning their legal employment.
Acknowledging the problem, Immigration director-general Datuk Seri Mustafar Ali told the New Straits Times that, in the past two months, the department had arrested 7,225 foreigners, including many running illicit businesses.
A total of 161 Malaysian employers were also picked up, many for harbouring illegal foreign workers.
During Op Mega 2.0, the department conducted spot checks on 33,626 foreigners in 2,838 operations on business premises nationwide.
Mustafar blamed the problem partly on irresponsible employers, who allowed their foreign workers to stray to other sectors and abuse their passes.
He said these immigrants, who were earning wages from their legal employment, were eager to set up illegal businesses to reap better returns.
“These foreign workers have been abusing their work passes. They come for employment in the plantation sector, for example, by paying a RM640 levy. But, we find them doing business.”
Among the areas in the Klang Valley with drastic growth of foreign workers running illegal businesses are Jalan Silang, Lebuh Pudu, Petaling Street, the Selayang market, as well as computer and information technology malls.
Mustafar said local authorities must stop the abuse of business licences.
“We appreciate the efforts of Kuala Lumpur City Hall in compelling business licence holders to ensure that half of their employees are locals.
“We don’t want an environment where locals are sidelined because it is cheaper to employ foreigners. We conduct raids with City Hall and will continue doing so.
“Besides enforcement, we emphasise prevention and education. We engage embassies, local communities, associations and stakeholders of sectors that rely on foreign workers.”
Mustafar shared with the NST’s Special Probes Team his experience in leading a raid with Mayor Tan Sri Mhd Amin Nordin Abd Aziz in Lembah Pudu here.
The area, he said, was bustling with businesses, including unhygienic illegal eateries run by foreigners.
“Their businesses are nothing like Malaysian-run ones. They sell all sorts of things and offer all sorts of services.
“We found retail shops operating as a front for prostitution. There were cubicles upstairs in the extended rear portion of the premises.”
Mustafar said cooperation with other agencies was needed to break the chain of offence and stop foreign workers from expanding their ventures.
“Like in our joint operations with City Hall, we look into Immigration offences, while the local authority tackles illegal extensions and licence abuse.
“Tenaga Nasional Bhd and Syabas, for instance, could look out for illegal utility connections. The Companies Commission of Malaysia and even the Inland Revenue Board can join in to curb this problem.
“Many of these foreigners are making a killing and they do not pay taxes.”
Amin said business owners had until June to ensure that 50 per cent of their workers were locals or risk having their licence revoked.
“We are introducing a new policy. We have sent notices on this requirement to all business premises this year and they must comply. If they fail, we will issue them show-cause letters.
“The special task force will decide whether to revoke their business licences,” Amin said, adding that business owners could face harsher penalties.
He said City Hall had planned to restrict the directorships of businesses to locals, but that proposal did not see the light of day.
“The idea was opposed by the International Trade and Industry Ministry on grounds that it could affect trade and investments.
“But, at least we can control the number of foreigners on business premises.”
Amin said foreigners could easily secure business premises as they offered above-market-rate rentals to property owners, who found it hard to say no.
It is understood that the arrangements are rarely put on paper, but the guaranteed high rental is enough to keep the tenancy going.
“But, in the case of premises belonging to City Hall, including hawker centres and malls, businesses must be owned and managed by licence holders. Otherwise, we will revoke the licence.”