E-invoice 2025: E-invoicing for Foreign Subcontractors

Post title 'E-invoicing for Subcon (FAQ)' on green banner overlaying thumbnail of Bispoint E-invoice 2025 trainer

As a subcontractor, are you facing these challenges?

📌 Hiring foreign workers through other companies but unsure how to record transactions and issue e-invoices?
📌 Your foreign subcontractors can’t provide e-invoices—what should you do?

If these issues sound familiar, you’re not alone. Many subcontractors struggle with e-invoicing requirements, especially when dealing with foreign workers and outsourced services. In this quick FAQ guide, we’ll break down the key challenges and provide practical solutions to ensure your invoicing process stays compliant and hassle-free.

E-invoicing for Foreign Workers and Subcontractors FAQ

1. What should I do if I hire foreign workers who are not under my company?

If you hire foreign workers through another company that holds the necessary work permits, you should request that company to issue you an e-invoice.

2. What if the permit-holding company refuses to issue an e-invoice?

You must insist that they provide an e-invoice, as they are legally required to do so. Since the foreign workers are not officially employed under your company’s permit, they should not be working at your construction site. If authorities investigate, you could be held responsible and face penalties.

The proper approach is to ensure the permit-holding company issues an e-invoice, as required by the Inland Revenue Board of Malaysia (LHDN).

3. Can I issue a self-billed e-invoice for hiring foreign workers?

No. Whether foreign workers’ wages qualify for e-invoicing depends on their employment status. If they are considered employees, their wages should be reported under Form E.

Since these workers are not officially under your company’s permit, you should not account for their wages in your records.

As a last resort, you may attempt self-billing, but be aware that this approach does not comply with LHDN regulations and could lead to consequences in the future.

4. Since foreign subcontractors cannot issue e-invoices, can I use self-billing instead?

LHDN has addressed this in previous public sessions. A subcontractor is considered conducting business and is required to issue e-invoices. As long as they earn income in Malaysia and are tax residents, they must have a Tax Identification Number (TIN) and pay taxes. This means they are eligible to issue e-invoices.

If a foreign subcontractor is still unable to provide an e-invoice (due to not having a TIN as a non-tax resident of Malaysia), you may consider self-billing as a last resort. However, be aware that this method is not LHDN-compliant.