Malaysia My Second Home

Malaysia My Second Home (MM2H) is one of the most accessible long-term visa programs out there. It allows for a stay of up to ten years, comes with numerous benefits and allows for work albeit with severe restrictions. In this article, I explain what it is in details, explain how to apply and what are the best alternatives.

 

Update (2019)

The future of the program is currently uncertain with changes being discussed at the government level. If you plan on applying, I recommend that you do so now.

 

What it is

In a bid to attract wealthy non-doms and retirees, Malaysia has created a visa which allows for a stay of up to ten years and which comes with a number of useful benefits such as the right to import a car duty-free. Working locally is allowed but only if you are over 50 years of age and even then, there are severe restrictions on the nature of the work that can be carried out. That said, there are no such restrictions against owning local and overseas businesses and carrying investment related activities (as long as they are not commercial in nature). Working overseas is also allowed.

Qualifying is fairly easy, provided that you have the proper financial resources (see below), and the visa can be renewed indefinitely. It is important to note, however, that this visa does not grant the right to live in the state of Sarawak (where Kuching is located). If your intent is to live there, you will have to apply via Sarawak’s own program.

Malaysia is a territorial taxation country and this means that in most cases, foreign-sourced income will be exempt from local taxation. Please note that foreign-sourced income refers to income generated outside of Malaysia, not income received from outside of Malaysia. If you work from Malaysia, your income will likely qualify as local even if your clients are based overseas.

Interestingly, you only have to spend 182 days in-country during one of every two fiscal years in order to qualify as a tax resident. During the other year, you can spend as little as a day and still qualify. Unlike most of the “island tax havens” and countries like Panama, Malaysia is a normal country which is not usually on tax blacklists. This means that even if you spend little time in-country, you should not have problems when it comes to justifying your residency to your home country and that is a definite plus (especially if you are from a country like Australia where the local tax agency tends to take a hard line on residency issues).

 

How to apply

There are two routes that can be used to qualify under the MM2H program, one for those over 50 years of age and one for those under.

For those over 50 years of age, they are as follow:

1. Liquid assets of over 350000 MYR (84,029.58 USD).
2. Minimum monthly income of at least 10000 MYR (2,400.85 USD).

For those under, they are as follow:

1. Liquid assets of over 500000 MYR (120,042.25 USD).
2. Minimum monthly income of at least 10000 MYR (2,400.85 USD).

If you do qualify, your first step will be to prepare all necessary documents. A complete, up-to-date list can be found on the Malaysian government site here.

Once you have all the necessary documents, you can choose to either apply by yourself or hire the help of an immigration agent. You can find a complete list of all authorized agents directly on the Malaysian government site here. The process is fairly straightforward and as such, I recommend going through it on your own.

Once your application has been approved, you will receive a letter of approval. This will allow you to travel to Malaysia and enter the country as a resident. Upon your arrival, you will be asked to open a term deposit with a Malaysian bank of at least 300000 MYR (72,025.35 USD) or 150000 MYR (36,012.68 USD) if over 50 years of age although this requirement is waived for those receiving a government pension of more than 10000 MYR (2,400.85 USD). It is entirely possible to open the deposit with an international bank if it has a presence in Malaysia (Citibank, HSBC, OCBC etc). Half of this amount can be withdrawn from the fixed deposit a year into the residency to cover approved living expenses. This includes housing, education, medical expenses etc. For those over the age of 50, only a third of the fixed deposit can be withdrawn. You will also need to undergo a medical exam and purchase medical insurance. Once those steps have been completed, you will receive a resident permit and ID card (from the state in which you live).

The permit is valid for up to ten years (depending on the validity of your passport) and can be renewed indefinitely provided that you still meet all requirements.

 

Alternatives

Alternatives exist for those who wish to live in Malaysia but do not qualify for MM2H. My favourite one is the Labuan Company route. Essentially, you register a company in Labuan and use it to sponsor your work visa. Unlike MM2H, this route allows you to eventually apply for permanent residency and in some cases, citizenship. It also allows for unlimited work hours, as long as the conditions of your work permit are respected. Annoyingly, the Labuan route cannot be used for Sarawak.

Neighbouring Thailand offers a visa similar to MM2H, the Thailand Elite visa. It is more expensive and as is typical of Thailand, more bureaucratic. That said, it can be still an interesting option especially if you prefer to live in Thailand.

The Philippines allows for long stays (up to around two years) as a tourist, without the need to apply for a special visa. A tourist ID card is granted after a few months and the stay conditions are similar to that of MM2H and Thailand Elite albeit with fewer benefits.