What Malaysia’s MM2H visa reboot means for foreigners

The recent announcement of updated terms for one of Malaysia’s sought-after residential and retirement visas has evoked a range of emotions among foreigners aspiring to relocate or extend their stay in the country.

The arguments

The Malaysia My Second Home (MM2H) program, initially providing the opportunity for foreigners to reside in Malaysia for up to 10 years, subject to certain wealth and investment criteria, garnered approval for approximately 57,000 applications in the first 16 years since its launch in 2002. However, since 2018, the program has been consistently under evaluation, facing suspension in 2020 during the COVID-19 crisis and subsequent border closures. It was revived in 2021 with stricter regulations, demanding applicants to have a monthly income of at least 40,000 Malaysian ringgit ($8,662), a substantial increase from the previous requirement of 10,000 ringgit ($2,165). This change, particularly affecting retirees, resulted in a 90% decline in program applications over the two years following the adjustment.

The modifications announced by the Ministry of Tourism on December 13 seem to present the MM2H program as a more viable option for the average expatriate. According to the revised program, the age requirement for applicants has been lowered to a minimum of 30, down from 35.

Previously, MM2H eligibility depended on a fixed deposit of 1 million ringgit ($216,567). Under the new framework, applicants can choose from three tiers – Silver, Gold, and Platinum – with fixed deposits of 500,000 ringgit ($108,283), 2 million ringgit ($433,135), or 5 million ringgit ($1,082,837), respectively. The Silver and Gold tiers offer residency for five and 15 years, while the Platinum tier grants eligibility for permanent residency, a status that is challenging to attain in Malaysia.

The revised conditions for MM2H visa holders now stipulate a minimum stay of 60 days in the country, reduced from the previous requirement of 90 days. This requirement can also be fulfilled by dependents such as spouses or children.

The Ministry stated that the objective is to simplify the often-criticized MM2H application procedures by introducing more flexibility and clarity. The announced revisions are preliminary, and final eligibility requirements will be disclosed in stages.

The facts

Numerous expats, attracted to Malaysia for its pleasant climate, renowned cuisine, and diverse cultural influences encompassing Malay, Chinese, Indian, and Indigenous elements, expressed relief as the relaxed requirements for the Malaysia My Second Home (MM2H) program were unveiled. However, despite nearly a year of anxious anticipation for clarity on changes to the scheme, certain prospective applicants were disappointed to find crucial details omitted in the recent announcement. Unaddressed aspects include whether specific income and asset thresholds must be met and if applicants aged 50 and above are eligible.

The new rules broaden the visa program to a larger audience, though some uncertainties still linger. One of the significant concerns is the required monthly income, identified as a major obstacle for many individuals seeking to apply for the existing MM2H visa.

In response to the announcement, foreigners expressed agreement with the Ministry, noting that the new criteria are indeed simpler and clearer. They expressed optimism that the government would not reintroduce stringent requirements for the visa during the implementation stage, though they suggest that bank statements and letters of good conduct might still be necessary in the pre-screening process to demonstrate applicants’ financial capability without imposing an undue burden on the country. The latest guidelines suggest that the MM2H requirements can now be fulfilled through the respective fixed deposits. Although MM2H obliges applicants to commit a substantial sum for several years, all categories of pass holders will have the flexibility to withdraw up to 50% of their deposit after 12 months. This withdrawal can be utilized for purchasing property and covering healthcare and travel expenses.

For existing long-term foreign residents in Malaysia, the prospect of permanent residency provides a sense of security after years of uncertainty about their ability to stay in the country permanently. An Italian MM2H visa holder, who chose to remain anonymous, shared the consideration of reapplying under the Platinum tier for the assurance of indefinite stay.

While some visa holders remain uncertain about the impact of the changes on their situation, there is a mix of opinions. A British MM2H holder expressed concerns about potential alterations to the original terms and noted the complexity introduced by new laws and criteria. The individual mentioned possible competition with other countries like Thailand, Indonesia, and the Philippines.

Some of the foreigners showed there are areas requiring clarification in the evolving scheme. One aspect is whether pass holders would be permitted to work under certain conditions. Also, there are questions about remote work and taxation for individuals carrying out work from their apartments in Malaysia.