Malaysians living in New Zealand can be barred from travelling overseas for three years upon their return if they discredit or ridicule their Government.
The Malaysian Immigration Department had enforced this ruling in a move to safeguard the country's image, the the Star reported.
Malaysian Immigration director-general Datuk Sakib Kusmi told the newspaper the ownership of a Malaysian international passport was a privilege and not a right.
"So, the Government has the discretion to either issue, defer or revoke the travel document," he said.
The Malaysian High Commission did not respond to the Herald's request for comments, and did not return calls or emails.
Auckland Malaysian Society president Francis Chai said the warning would be passed on to members and Malaysians here.
But said he was not in a position to comment.
In 2013, 16,350 New Zealand residents were born in Malaysia but there are thousands of others who are here on work or student visas.
"As per our constitution, our society does not get involved in any sort of politics," Mr Chai said.
"We will pass on any information we get from the Government, but we leave it to the individual to make up their own opinions."
An Auckland-based Bersih organiser, a movement demanding the resignation of Malaysian Prime Minister Najib Razak, said the move was one of "desperation".
Bersih, which means "clean" in Malay, is a global civil society movement that had held rallies, including in Auckland, calling for institutional reforms to prevent prime ministerial corruption.
"Using the passport as a threat is a desperate last gasp attempt from the Malaysian authorities to silence us," said the organiser, who spoke on the condition of anonymity.
"It may change what comes out of our mouths, but not what is in our hearts."
Last year, the rally was organised in several cities around the world, including in New Zealand, amid allegations in the Wall Street Journal that US$700 million ($1.04 billion) in state funds was deposited into Mr Najib's personal bank accounts and alleged mismanagement of state investor 1Malaysia Development Berhad (1MDB).
The Prime Minister was cleared of criminal offences and corruption this year after Malaysia's attorney general said the money was a gift from the royal family in Saudi Arabia.
Supporters of the Prime Minister started an online campaign in March, using Twitter hashtag #RespectMyPM to show their support.
Opponents have used it to continue their criticism, with former Malaysian Prime Minister Mahatir Mohamad tweeting: "Respect is earned. Not paid, not forced and definitely not from a hastag (sic) such #RespectMyPM. Should not it be more like #InspectMyPM?"
Malaysians in Malaysia also faced the three-year ban from travelling if they disparage or denigrate the Government.