Malaysia’s move to ease some requirements for its retirement residency visa programme in an effort to attract wealthy foreigners has generated interest from those now qualified for the scheme, but many said they are still holding off from making formal applications.
This, they said, is because the government has yet to announce the full list of requirements for the revamped Malaysia My Second Home (MM2H) scheme.
They also question whether there will be any changes to key conditions – such as minimum offshore income and minimum liquid assets – which some say were the “biggest barriers” in the previous iteration of the MM2H scheme.
The Ministry of Tourism, Arts and Culture (MOTAC) unveiled a revamped version of the MM2H programme on Dec 15, introducing a three-tiered structure along with updated financial requirements.
The revised guideline outlines several changes to the eligibility criteria, including the fixed deposit amount needed for the lowest-tier category as well as the minimum age of applicants, which experts say will significantly widen the scope of foreigners who qualify.
Mr Ch’ng Toh Gee, managing director of Alter Domus – a licensed agency which handles MM2H applications – told CNA that since the announcement was made he has received “thousands of enquiries” and “hundreds of potential applications”.
However, he said that the applications cannot yet be completed because MOTAC has not announced the entire set of conditions for the new version of MM2H and that the agency does not know when this information will be released.
In the new MM2H requirements, there is no mention of minimum income, no mention of (liquid) assets, no mention of how to submit a document and where to submit and how long to get approval,” said Mr Ch’ng.
“How all this will happen – nobody knows yet. We have to wait and see,” he added.
The MM2H programme, introduced in 2002, is a long-term visa scheme for foreigners to purchase property and reside in Malaysia. It was temporarily halted in August 2020 pending review by the Malaysia government, who was led by then-prime minister Muhyiddin Yassin.
In September 2021, the then-minister of home affairs Hamzah Zainudin announced that the programme would be reactivated with what was later deemed by critics as stricter conditions.
Mr Hamzah announced that participants would be required to have a monthly offshore income of at least RM40,000 (US$9,600), up from RM10,000 previously.
They also needed to have a fixed deposit of RM1 million, compared with the previous conditions of between RM150,000 and RM300,000.
Additionally, MM2H applicants would have had to prove ownership of liquid assets worth at least RM1.5 million.
Many observers said that the conditions set then disqualified many middle-income foreigners, and would only qualify ultra-high-net worth individuals, with the government reporting a 90 per cent dip in the number of applicants.
Among the critics was Johor ruler Sultan Ibrahim Sultan Iskandar who said the ministry’s reluctance to review the criteria was “mind-boggling and outrageous”.
Mr Ch’ng told CNA: “The MM2H conditions (set in 2021) were implemented without any thought into it at all. It was an arbitrary move,”
“The ultra rich would not even come to Malaysia, they would rather go to the UK etc, so the applications dropped to almost zero,” he added.
The latest version of MM2H unveiled by Minister of Tourism, Art and Culture Tiong King Sing last week has reignited interest in the scheme.
However, foreigners and agencies have expressed disappointment that the announcement seemed incomplete, especially given the anticipation it has drummed up.
NEW APPLICATIONS STALLED DUE TO MISSING GAPS
United Kingdom (UK) citizen Rebecca Spencer told CNA that she and her husband had been monitoring the news developments in Malaysia on updates on the MM2H situation as the couple is considering retiring in Kuala Lumpur if the conditions were relaxed.
The 48-year-old said that since the Malaysia general elections ended a year ago and Mr Anwar Ibrahim was appointed prime minister to lead a unity government, there have been optimistic developments on that front.
In tabling the national 2024 budget in October, Mr Anwar, who is also finance minister, said the government had agreed to relax requirements for the MM2H programme to boost the influx of foreign tourists and investors to Malaysia.
Moreover on Dec 4, Mr Tiong pledged that the revised MM2H programme would be announced in mid-December after a “thorough review”.
Ms Spencer told CNA she felt that there were “clear gaps” from MOTAC’s announcement on Dec 15 and that the income and gross assets criteria were glaringly missing.
“Those were the two conditions that proved to be the biggest barriers under the old criteria so it’s a bit perplexing why they did not state them clearly this time,” she said.
Ms Spencer added that since she and her spouse were retired, and mostly relied on dividends from investments as their income source, the RM40,000 per month requirement under the old criteria would disqualify their application.
“It’s very unlikely that retirees would qualify, even taking into account factors like pension. We were hoping for a much lower number or removing that condition completely. But as it stands, our applications are stalled,” she added.
Mr Andy Davison – founder and chief executive of The Expat Group (TEG) – a media organisation based in Kuala Lumpur that is also licensed to process MM2H applications, told CNA that on the surface, the new MM2H requirements “seem to be an improvement” as it widened the scope of foreigners who qualified.
However, he added that there was ongoing uncertainty on the income criteria, and when his team did checks with MOTAC, they have not received any concrete replies or confirmation.
“There are missing pieces and if they’re going to have a minimum income requirement, I assume, and hope it’d be much lower,” said Mr Davison.
“But nothing was stated regarding income. So I don’t know where they dropped it or whether there was just an omission from the announcement … we’re still trying to find out,” he added.
CNA has asked MOTAC if there are any changes to the MM2H conditions on offshore income and fixed assets, and if so, when will they be announced.
The announcement for revised MM2H conditions was also keenly followed by some Singaporeans who already own property in Malaysia.
Many Singaporeans own a second property in the southern part of peninsula Malaysia, across Johor and Melaka, as the cost of landed property and condominiums are relatively cheaper than in Singapore.
Their property would also be more accessible as compared to houses in the Klang Valley or in Penang, as they would be within a two-hour drive from the Causeway.
One Singaporean who owns a two-storey terrace house in Taman Adda Heights, Johor Bahru and wanted to be known only as Mdm Dyana, told CNA that she and her husband are considering applying for MM2H after not being able to access their home during the COVID-19 pandemic due to border restrictions.
Prior to COVID-19, the couple had been entering Malaysia via social visit passes to visit their weekend house bought in 2018. A social visit pass is a short-term visa typically granted to tourists, which permits the traveller to stay a maximum of 30 days in Malaysia.
“During COVID, we realised that getting a long-term pass might be a good idea because we could not access the home we paid a lot of money for. It fell into a state of disrepair,” said the business owner.
During the pandemic, tourist travellers were not permitted to enter Malaysia under the Movement Control Order imposed by the government.
“I think in case another pandemic or something similar happens, we are keen to apply for MM2H so that we can access our home and even stay in JB for longer stretches without worrying about our visa expiring soon,” she added.
However, the retired teached added that the existing conditions of RM40,000 in offshore income as well as RM1.5 million in fixed assets for each individual have disqualified the couple from applying for one.
“Even with the favourable exchange rate (favourable ratio of Singapore Dollar against the Malaysia Ringgit), these numbers are quite difficult (to attain). I don’t think many middle-income Singaporeans qualify. Hopefully the Anwar government will announce much lower requirements for these conditions soon,” said Mdm Dyana.
In the meantime, she added that the couple will continue commuting from Singapore to Johor Bahru via social visit pass to visit their home.
However, Alter Domus’ Mr Ch’ng warned that foreigners who stay in Malaysian property for long stretches without a long-term visa risk running afoul of Malaysian immigration laws and could get their identities blacklisted and barred from entry.
He explained that under Malaysia immigration laws, foreigners with no long-term visas are not permitted to stay in Malaysia for longer stretches than the duration they stay outside of Malaysia.
“For example if (a person on social visit pass) stays (for) 28 days in Malaysia, you have to stay outside the country for 29 or 30 days before you can come back in. If not, your travel pattern might raise alarm bells and you might be barred from entry,” said Mr Ch’ng.
“I think Singaporeans who own property should apply (for MM2H) because there’s always that peace of mind and comfort of knowing that you are not breaking the law,” he added.
NEW CONDITIONS MORE ATTAINABLE FOR MIDDLE-INCOME PROFESSIONALS
However, based on the new MM2H requirements that has been announced so far, there is cause for optimism that the government is casting a wider net on foreigners who qualify, and industry players told CNA that this would attract more middle income earners from countries like Singapore, China, UK, US as well as South Korea.
They outlined that a key point to highlight was the lower amount of required fixed deposit. Under the old MM2H conditions, applicants would need to put a RM1 million fixed deposit with the Malaysia government but this number has been reduced to RM500,000 under the latest requirements.
MM2H holders are allowed to withdraw a maximum of 50 per cent of this deposit a year after their application is successful, to be used for property purchase or spending on health or education in Malaysia.
In response to queries from CNA, Johor property consultant firm KGV International said that the loosening of conditions was an indication that the government is looking to be more “flexible, practical, friendly, and targeted” in its strategy to attract foreigners to live in Malaysia.
The statement, which was co-written by the firm’s executive director Samuel Tan and head of research Tan Wee Tiam, said that the old fixed deposit figure of RM1 million was an “unrealistically high minimum threshold” and also lauded the three-tiered categories in the new system which they said offered applicants flexibility.
“Broadening the classification and lowering the bar allow Malaysia to target a more diverse pool of MM2H aspirants,” wrote KGV International.
“Apart from the rich-and-wealthy, other potential applicants are retirees and professionals seeking for a lower cost base, parents looking for a country with good education system at a relative lower cost, businessmen seeking for new opportunities especially in promoted sectors like electronic vehicle, green technology, artificial intelligence, fund management, logistics etc,” the firm added.
Alter Domus’ Mr Ch’ng told CNA that the minimum RM500,000 fixed deposit for the silver tier was a “manageable threshold” for many interested applicants who have contacted him to enquire about applying.
“There are some applicants who are ultra high net worth, they will take the platinum tier and make a fixed deposit of RM5 million … but a large majority of applicants will opt for the silver tier with a RM500,000 deposit. These are your middle class income earners, which include managers and senior managers,” he said.
Alter Domus is headquartered in Penang, but they also cater to applicants who wish to relocate to other parts of Malaysia like Johor Bahru and Kuala Lumpur.
Mr Ch’ng predicted that based on the interest generated so far and pent-up demand due to strict conditions previously disqualifying a large group of interested applicants, he expects his company to process between 50 and 100 people a month once the government has fully announced details for the revamped MM2H programme.
“Before this, we were processing a maximum of two people a month due to the stricter conditions,” he added.
Current MM2H holder Frank Chen, who is from Taiwan, told CNA that he is “feeling good” about the new conditions set as it allows three tiers and gives applicants flexibility
Mr Chen, who has been based in Malaysia for two years, qualified under the criteria set in 2021 which requires applicants to place a RM1 million fixed deposit. His visa will be due for renewal in 2026, and Mr Chen will do so under the criteria he applied to and not the new conditions announced recently.
“Though the previous conditions were tough, it did however sort out those who do actually want to stay in Malaysia. I do also have relatives that got MM2H under the one million fixed deposit conditions, and they think it’s somewhat alright,” he said.
CONCERNS OVER EASE TO ATTAIN PR STATUS
The MM2H issue also made headlines on local media this week, following comments from opposition Member of Parliament (MP) Mas Ermieyati Samsudin who questioned how under the new conditions – those who apply under the platinum criteria would be eligible for permanent residency status.
The chairman of the Public Accounts Committee added that this would ease the process for the wealthy to attain Malaysian PR and that this could lead to a “dumping of foreigners”.
“And as a sovereign nation, we are responsible to ensure that those who are accorded permanent resident status are thoroughly screened … It should not hinge on their fixed deposits,” said the Masjid Tanah MP.
The former deputy tourism minister also posted on X that she “heard” that China nationals who obtain MM2H passes would be automatically eligible for PR.
This led to Tourism Minister Tiong saying that her comments were seditious and disruptive of the nation’s multiracial harmony.
He clarified that the MM2H programme was open to applicants from all over the world and that they would all – regardless of nationality – need to fulfil platinum-category conditions before they are allowed permanent residency in Malaysia.
“Is Mas Ermieyati purposely trying to stir up racial provocation? Is she trying to ruin racial harmony?” he said.
TEG’s Mr Davison stressed that the announcement merely stated that platinum holders are eligible for the PR status but do not automatically receive it.
“So I assume there’ll be the same rigorous process of approval that exists right now. And Malaysia is not a country which likes giving out PR so I would imagine there will be pretty thorough background checks before they ever give it,” said Mr Davison.
Mr Ch’ng added that the Ministry of Home Affairs and police would typically conduct thorough anti-money laundering screening on MM2H applicants.
Malaysian economic expert Oh Ei Sun, a senior fellow with the Singapore Institute of International Affairs, told CNA that Malaysia was lagging behind its neighbours like Singapore in becoming an ideal destination for foreigners to live in, in spite of its much lower cost of living.
Hence, he stressed that Malaysia should be welcoming to applicants from different nationalities, rather than adopt an overly discerning approach.
“Malaysia is in serious need of foreign capital injection, preferably in the form of investments, but you really can’t be choosy when you are quite desperate,” said Dr Oh.
Property consultant firm KGV International told CNA that an influx of foreigners via the MM2H programme will bring about “positive economic multipliers” to the country.
“The successful MM2H participants are allowed to buy properties at minimum prices ranging from RM500,000 to RM1.5 million depending on the tier. This creates new demand for residential properties.
“At the same time, they will spend money on education, tourism, healthcare, daily expenses, entertainment, investment etc. All these will create further spin-off to the economy,” the firm said.
In response to the concerns on the ease to attain PR status, KGV International stressed that it was confident that the government will set certain thresholds on the maximum quotas of MM2H applications that will be approved to maintain “overall dynamism”.
“We must understand that PRs are not eligible to vote. So the question of sovereignty does not arise,” it added.