Okay, we’ve got some good news and bad news for expats and potential FIRE enthusiasts interested in choosing Malaysia as their base of choice.
The good news here is that the Malaysia My Second Home (MM2H) programme is set to be reinstated in the coming months with additional improvements made to the policies and application conditions.
The bad news? The new criteria will be a lot tougher to fulfil compared to the programme’s past iterations, which could be seen as a deterrent for many well-to-do foreigners and expat retirees.
Malaysia Tightens Requirements For MM2H
This latest economic news comes in the wake of Malaysia’s economic woes as the government is now looking to inject a boost of foreign investment in the local economic climate via the programme. The MM2H programme was suspended since July 2020, in the midst of the global Covid-19 pandemic as the government scrambled to tackle the fallout from a prolonged yet ineffective lockdown in the nation. As such, there was a plan as part of the National Economic Recovery strategy to reactivate MM2H in order to boost the economy. To that end, applications for the programme will begin from October onwards. As for the new, stricter criteria, the MM2H 2021 programme requires applicants to prove that they own minimum liquid assets worth RM1.5 million (483,000USD) — very much a stark increase from the previous iteration’s range of RM350,000 – RM500,000, depending on the applicant’s age.
Additionally, successful applications for this “new” programme will also need to have an offshore income of at least RM40,000 (12,800USD) per month. As a comparison, this new minimum is four times the amount of the previous RM10,000 monthly income requirement. Plus, applicants will also need to physically reside in Malaysia for at least 90 days per calendar year.
On top of all of that, MM2H participants must also maintain a fixed deposit account in Malaysia of at least RM1 million (322,000USD). They are also not allowed to withdraw more than half during their stay. And if they do withdraw, they are only allowed to do so to buy Malaysian property, healthcare, or for the educational fees of their children.
The new MM2H 2021 requirements will also automatically apply to extensions of existing visas issued under the scheme, though a grace period of a year has been granted for participants so that they may fulfil the new requirements.
Thus far, the revised MM2H 2021 requirements have been met by an overwhelmingly negative response from the communities it applies to as reviews from experts and analysts warn that the country risks losing these expats to competing countries in the region.
Many had cited Malaysia’s low cost of living as one of the main reasons for the MM2H’s previous success in attracting plenty of foreign retirees to settle in the country as they are able to stretch their lifetime savings further here. But the new qualifying income of RM40,000 will definitely exclude a large number of applications looking for a better quality of life when they retire. As well as that, the requirement to prove RM1.5 million in assets will also negatively impact many foreigners as their businesses and savings have been severely affected by the ongoing pandemic.
Whether or not the new MM2H plan will work in the long run is a question many have on their minds. But we can only sit back and speculate as the government has brushed aside concerns and intends to move forwards with this updated plan regardless. Time will tell.