Last week there was a good news released especially for for foreign investors. The good news is that the government is re-opening application for Malaysia My Second Home (MM2H) starting this October 2021.
The bad news is the requirement for MM2H application has changed. A big one.
First let us understand what is MM2H anyway.
The Malaysia My Second Home (MM2H) is a programme promoted by the Malaysia Tourism Authority and the Immigration Department of Malaysia, to allow foreigners to stay in Malaysia for a period of ten years. Foreigners who fulfill certain criteria may apply, and a successful applicant is allowed to bring a spouse, an unmarried child under the age of 21, and parents who are over 60 years old. Wiki
Why foreigners like or thought of retiring in Malaysia?
The obvious reason is because Malaysia is beautiful. If you asked me. There are many unique cultures that only available in Malaysia.
Malaysia has been dubbed as a model of success in a multicultural society, and it is not just because they have the most diverse communities in the world. This is because Malaysia has shown to be successful at integrating its many ethnic groups into a cohesive whole. It is also because of their success rate in keeping their different cultures and religions alive.
Malaysia is strategically located in the Asia Pacific region. It has land and maritime borders with Thailand and Singapore. The people of Malaysia have historically been welcoming to outsiders and this national trait continues today.
Malaysia is the perfect destination for those who want do business, live or retire.
Besides the capital city, many expats prefer to stay in more relaxing states such as the Penang island with its world UNESCO Heritage status. There are many prewar buildings that were built for more than 300 years ago. Similar prewar buildings could be found in the state of Malacca too with the same UNESCO Heritage status.
Existing vs New MM2H Criteria
It is worth for us to look and compare existing MM2H against the new criteria.
With the new changes announced, industry players and myself don’t think this is attractive at all. It doesn’t make any sense. I will share more within this article as to why new MM2H criteria will put foreigners away.
In my opinion, if the Malaysian government impose such high criteria to attract wealthy foreign investors to come and live in Malaysia, they should have done a better job in terms of securing more FDIs into Malaysia.
For the past few months, how many bids did Malaysia lost to neighbouring countries such as Singapore, Indonesia and Thailand?
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Malaysia has also lost a significant foreign player in Hyundai, which is moving its regional headquarters from Mutiara Damansara to Indonesia as part of setting up a US$1.55 billion (RM6.27 billion) plant in Bekasi. Pualtan.org
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The 12,000-kilometer-long Apricot cable system will connect Singapore, Indonesia, the Philippines in Southeast Asia, with Taiwan, Guam, and Japan. News of Apricot was met with disappointment in some quarters in Malaysia. According to reports, insiders blamed it on the removal of a cabotage exemption put in place by former transport minister Anthony Loke. DataCentreDynamics
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Apple, through its manufacturing partner, Foxconn, moving some iPad and MacBook assembly lines to Vietnam from China; Tesla building a factory in Indonesia and even contemplating a SpaceX launchpad; Amazon investing US$2.8 billion to build a localised data centre for its cloud computing services in West Java, Indonesia; and Alibaba, Bytedance, Tencent and other companies setting up regional headquarters in Singapore. NST.com
While other countries are working hard to make their countries attractive to foreign investors, the same could be said to Malaysia. And yet, with little focus on economic growth, the government imposed unrealistic criteria for MM2H. Perhaps, MM2H is too small in terms of revenue for the government?
Southeast Asia Visa (Long-Term)
Besides Singapore, most countries in Southeast Asia are welcoming foreigners to live and retire. Singapore would not be in consideration due to the country does not offer any long term visa. In addition, the property is highly not affordable. The same is applicable to countries such as Hong Kong and Japan.
The table below shows the requirement to obtain a long term visa. Before the recent announcement of MM2H, I can easily say that Malaysia is the best countries to live in. But with recent changes, I started to doubt if Malaysia still attractive to foreigners.
Though I’m a Malaysian myself, I would put myself and think as if I were a foreigner.
If we looked at the table below, Malaysia MM2H is ridiculously out of the league. Not even attractive considering there is nothing the country could offer. Neither the economic growth nor political stability. Yet, the deposit required is hefty.
Among all the countries, only Malaysia and Philippines type of deposit can be used for investment. The other countries are technically in a form of a membership fee or charges. In which it is a cost to the applicant.
Even with cost, Thailand would be my choice of retirement. With $30,000 paid for my visa membership of 20 years, I could still have at least $200,000 with me to spend (if I were to have $235,000 to consider to invest in Malaysia). And instead of 10 years, I would have 20 years in Thailand.
Healthcare
For retiree or expats living in foreign countries, the thing that we concern the most is healthcare. There is no doubt that all the countries in Southeast Asia could provide top notch medical services. For this, we are not going to look into private medical care. As that is surely good provided that you have enough money to pay.
What I personally interested is whether the public hospital could provide access to foreigners.
To my surprised that all countries provide medical care to foreigners in their public hospitals.
In terms of public insurance to foreigner, only Philippines provide such scheme. None of the countries in Southeast Asia provide as such. Above that, the public insurance contribution is very affordable. Kudos to that.
Other countries you need to either self-pay or use private insurance.
The second thing that we need to look at is the cost of healthcare in public hospitals. Besides Singapore, Malaysia is the only country that provide whole list of treatment costs and charges for foreigners. This shows transparency. Which I admit that this is good.
You can find some of the links for cost and charges (example) below:
Property Price
Again, I am not going to include Singapore for property as the prices are ridiculously high. Thus, Singapore is not attractive in terms of property.
How I select the area to buy property. You may ask?
My criteria to find property to buy is simple;
- 5km from city centre
- High rise condominium
- Built-up up to 1,000 sq.ft.
From my sample data, property prices in Bangkok is the most expensive of all. Followed by Philippines. I can assumed that the prices are high due to high population density?
If we looked that the table below, Kuala Lumpur is the cheapest of all. Now, you may say that isn’t Jakarta is the cheapest of all. If we only look at monetary value alone, yes, Jakarta is the cheapest of all. But in property investment we look for more than just prices. We have to consider many other things such as financial system, legal system, infrastructure etc. Those are the things that justify the actual value of the property.
In which, I personally think that Jakarta couldn’t provide. Neither is Thailand for its legal system to protect buyers. The law of Malaysia is mainly based on the common law legal system. This was a direct result of the colonisation of Malaya, Sarawak, and North Borneo by Britain between the early 19th century to 1960s.
Conclusion
Malaysia is a great country to live and retire. Not only that we are a multicultural country, speak multiple languages, great food etc., the country provide many benefits that other countries don’t. Malaysia and Singapore are the only two countries in Southeast Asia that you don’t need to learn local language in order to communicate. Majority of Malaysians speak good English. So, there won’t be any issue to foreigners. Cost of living and healthcare are cheap as well.
The recent changes in MM2H policy is not something that would attract foreigners to come to Malaysia. I’m sure there are plenty more countries in the world that are better than Malaysia with similar monetary requirement.
Although the government has recently announced the new policy, there could be a chance that the policy will be revised. This is not something out of the norm for the government to do.
Perhaps, we should wait and see how things go in the future.
「If this article is useful to you, feel free to buy me a coffee ☕」
Danny KO @ RPC
If this article is useful to you, feel free to buy me a coffee ☕
