The man has been identified as Pouria Nour Mohammad Mehrdad, Malaysia's national police chief Khalid Abu Bakar told reporters.
Khalid said the 19-year-old boarded the plane on an Austrian passport whose owner had previously reported it stolen.
"We have been checking his background. We have also checked in with other police organisations on his profile," Khalid said.
"We believe he is not likely to be a member of any terror group and we believe he was trying to migrate to Germany."
Khalid said authorities had not yet identified the other man.
Malaysian Airlines flight MH370 disappeared early Saturday with 239 people aboard, sparking an international search for the plane in waters off Southeast Asia.
Revelations that two passengers on board were travelling on EU passports -- one Austrian, one Italian -- that were stolen in Thailand had fuelled speculation of a security breach and possible terrorist attack.
Asked why police believed the man was seeking to emigrate to Germany, Khalid said authorities had been in contact with his mother, who was waiting for him to reach Frankfurt.
Mehrdad and the other man, who used the Italian passport but has not been identified, both arrived in Kuala Lumpur on February 28.
Khalid said Malaysian police had been in touch with their counterparts in other countries, including Iran.
However, he said police were still considering all possibilities in terms of criminal involvement in the plane's disappearance, when asked whether police thought the revelation made them consider terrorism less likely in the case.
"At this moment, I would not say less likely. Same weightage to all until we finish our investigations," he said.
Khalid said police were focusing their investigations on various theories including a hijacking, sabotage or psychological problems among passengers or crew.
He did not elaborate and said none of those scenarios had yet turned up any findings.
The plane's disappearance has left authorities, the airline, passengers' families and aviation industry flummoxed at how a huge Boeing 777-200 jet could have completely vanished during its overnight flight from Kuala Lumpur to Beijing.
Search efforts involving several countries including China and the United States have found no evidence pointing to the plane's fate. The plane emitted no distress signal or other signs of trouble.