Malaysia My Second Home Program
“Malaysia is a tropical paradise,” writes Correspondent Wendy Justice. “Beautiful islands and beaches, cool mountain retreats, great food, a diverse and multi-ethnic culture, excellent shopping, and a low cost of living…Malaysia has it all.”Plus, the infrastructure and health care are modern and efficient. English is widely spoken. Entertainment ranges from street celebrations to casino gambling, from amusement parks to mountain climbing, from jungle trekking to championship level golf, and from Formula 1 racing to world music festivals and philharmonic orchestra productions. World-renowned diving and snorkeling destinations are never more than a few hours away.
“And here’s the cherry on top: The Malaysian government makes it surprisingly easy to live long-term in this hard-to-resist Shangri-la.
“Unlike other countries in Southeast Asia, Malaysia actively encourages foreign residents to relocate here. Excellent incentives are available if you qualify for the Malaysia My Second Home Program. And, even without attaining this special immigration status, Malaysia is an easy country to live in less permanently.
“Most westerners arriving in Malaysia receive a Social Visit Stamp upon entry. This is not technically a visa, but it permits you to remain in the country for up to 90 days. To stay in Malaysia longer than 90 days, you could, as many people do, take a short trip into a neighboring country for a day, then return that afternoon, receiving a brand-new 90-day Social Visit Stamp upon re-entry. Many foreigners have lived in Malaysia this way for years.
“Under Social Visit status, you can buy property and even negotiate a home loan for up to 60% loan-to-value from a Malaysian bank.
“Restrictions associated with the Social Visit pass, however, prevent you from obtaining Malaysian health insurance, from getting a Malaysian driver’s license, and from opening a checking or savings account at most Malaysian banks.
“Here’s your better option: Apply for the government-sponsored initiative called the Malaysia My Second Home Program, or MM2H. About 12,000 foreign residents are already participating and enjoying the benefits.
“Unlike in many Asian countries, Malaysia’s MM2H program is available to foreigners of all ages. It gives you a multiple-entry visa good for up to 10 years, allows your spouse, children, and parents to reside in Malaysia along with you, and, under certain conditions, even allows you to hold part-time employment or to have a business in the country.
“Perhaps the biggest benefit of MM2H status is the tax status it gives you. As a MM2H resident in Malaysia, all your foreign-source income, including pension, interest, and dividend income, as well as foreign earned income, is exempt from Malaysian taxes. Note, though, that income from employment or business within Malaysia is taxable.
MM2H Additional Benefits
In addition, with MM2H status, you can:
- Purchase residential real estate priced at at least RM250,000. At the current exchange rate, that works out to about US$71,000. You can make more than one real estate purchase if you want, and you can receive rental income from your properties. If you want to buy in parts of the state of Sarawak (the towns of Kuching, Miri, and Sibu), the purchase price must be at least RM300,000, or about US$85,000. You can finance up to 80% of the value of the property through a Malaysian bank.
- Import one automobile duty-free (as long as it was purchased before you made your application for MM2H status) or buy a locally assembled automobile free of import duty, excise duty, and sales tax (to qualify for this exemption, you must make the purchase within one year of your MM2H status). You must retain the vehicle in Malaysia for at least two years before selling it. Automobile insurance is mandatory but inexpensive and easy to get.
- Obtain a Malaysian driver’s license.
- Bring a maid into the country with you, regardless of nationality, as long as that person meets basic immigration requirements.
- Bring your family to live in Malaysia with you. This includes spouse, unmarried children under the age of 21, and parents.
- Send your unmarried children to private school.
- Start a public or private business in Malaysia. The minimum investment must be RM250,000 (US$70,850), and the company must be registered and must have two directors and a company secretary (though one of the directors can also be the secretary). The directors must be ordinary Malaysian citizens.
- If you are over the age of 50, you can work in Malaysia up to 20 hours per week. You must submit an application to the government for this, along with an employment contract, resume, and other documentation. The government will review the application to determine whether you would be filling a position in a “critical sector”–that is, a position that would be difficult or impossible to fill by a Malaysian. This can include jobs in the transport, travel, food, entertainment, health, and education fields.
- Obtain an ID card, so that you will not need to carry around your passport.
“Again, your MM2H visa allows you to stay in Malaysia for up to 10 years and makes you eligible for indefinite renewal. Note, though, that, when you qualify for MM2H status, you are not automatically granted a 10-year visa.
“What the government says is this: ‘The Social Visit Pass will be given according to the validity of the passport (maximum 10 years).’ In other words, your MM2H visa will expire two to six months prior to the expiration date of your passport. If you have three years remaining on your passport when you are granted MM2H status, then you’re looking at a visa of about 2 ½ years and will have to reapply after that time for continued MM2H status.
“If you are under the age of 50, you must be able to show that you have liquid assets of at least RM500,000 (about US$142,000) and an offshore income of at least RM10,000 (about US$2,800) per month. Additionally, you will need to open a fixed deposit account of at least RM300,000 (US$85,000) at a Malaysian bank. This deposit will earn interest, exempt from Malaysian taxes.
“After you’ve resided in Malaysia for one year, you can withdraw half of your deposit to use toward the purchase of a home, education expenses for your children or medical expenses. The remainder of the initial fixed deposit must remain in a Malaysian bank for the duration of your participation in the program.
“If you are over the age of 50, you will need to show financial proof of only RM350,000 in assets (about US$99,200) or an offshore income of at least RM10,000 a month. If you are retired, you must show proof of a monthly pension. You have the choice of opening a fixed deposit account of at least RM150,000 (about US$43,000) or of showing the government proof of pension income of RM10,000 a month.
“After one year, RM50,000 (about US$14,000) of the fixed deposit can be withdrawn for approved expenses (as above), but the remainder of at least RM100,000 (about US$28,000) must be maintained in a fixed deposit account, again for the duration of your participation in the program.
“Regardless of your age, you must submit a medical report from a Malaysian hospital or registered clinic, and you must have health insurance (you can purchase it locally or show proof of an international policy). If you can’t get health insurance because of your age or medical condition, this requirement can be waived.
“You won’t be able to get local Malaysian health insurance if you’re older than 60 (you’d have to opt for an international policy). However, health care is one of Malaysia’s biggest bargains; a doctor’s visit often costs less than US$10.
“Finally, you must fulfill a security bond condition, which costs from RM200 (about US$57) to RM2000 (about US$570), depending on your nationality. You’ll need to submit certified copies of your passport, marriage license (if immigrating with your spouse), copies of your last three month’s bank statements, and pay slips, pension reports, or income statements. Finally, you will need to pay for the MM2H Social Visit Stamp, which costs RM90 (about US$26) a year.”
It is possible to apply for MM2H status on your own, without the help of a licensed agent; however, given the amount of red tape involved, we recommend that you enlist help. Our preferred agent is called Travel 188 (MM2H).