The tropical beaches of Penang, its famous hawker food, multicultural character, and laid-back lifestyle are an attractive destination for many expatriates, foreign professionals and retirees who want an easier life for half the price — or less — than what they can get in their home countries.
Not only Penang, but Malaysia has made it easier for such people to stay long term, buy property, or keep working on their businesses from a practical Southeast Asian base that earns more accolades year after year.
“I considered Kuala Lumpur as well as Penang, but I quickly realized that Penang was the best choice for me,” says Poul O. G. Hoiness, former Danish ambassador now residing in Penang. “I enjoy George Town with its rich history, its excellent food, its beautiful, untouched nature and Penang wildlife. The ocean is always near and the lifestyle is rather laid-back. Others may prefer Kuala Lumpur, a much larger city, much busier, with a livelier nightlife… to each his own”.
Want to be like Poul and move long-term to Malaysian with a set of fiscal and tax benefits? The Malaysian My Second Home Visa (MM2H) is a 10-year-long residency pass that makes it possible for citizens of most countries around the world to settle in Penang, Kuala Lumpur, smaller towns like Taiping and the rest of Malaysia with their spouses and families.
Economic Benefits of Living in Malaysia
Malaysia is not only an affordable place to live boasting some world-class private health care. It also has quite relaxed property ownership laws.
Malaysia is also very close to Singapore, the second freest economy in the world, even though at a fraction of Singapore’s prices — especially real estate. Foreigners in Singapore also pay a 20% rental income tax — something unheard of in Malaysia.
Coming to real estate in Malaysia, generally speaking as long as a property costs at least 1 Million MYR (about US$ 240,000) it’s fair game for foreign buyers. You can read more about what types of properties foreigners can buy in Malaysia here. But there is one more advantage that halves these costs and helps offset expenses: getting a Malaysian My Second Home Visa, whose official website is here.
An MM2H Agent-approved Guide to Malaysian My Second Home Visa
Navigating the MM2H visa scheme seems easy, but it can be instead a lengthy, tricky process. We have contacted a Penang-based immigration lawyer with experience dealing with MM2H visa application for his clients, Sam Choong. Sam has kindly agreed to give Penang Insider’s readers a precise outline of what it means to apply and get a Malaysia My Second Home Visa.
Sam’s advice will be useful to let you decide whether or not you want to apply for an MM2H visa by yourself or hire a Malaysian MM2H agent.
First of all: What is a Malaysia My Second Home Visa?
In a nutshell, Malaysia My Second Home Visa (MM2H) is a long term visa (up to 10 years) which allows the successful applicant, his spouse, children under 21 years and parents above 60 years of age multiple entries and exits from Malaysia. MM2H is now overseen by the Home Ministry’s Immigration Department and, as far as the latest news, it is not possible to apply for one until the end of 2020.
How much does an MM2H Visa Cost?
Applying, paying for, and getting an MM2H really depends on the main factor: the applicant’s age.
Applicants under 50 must show proof of having a minimum of MYR 500,000 (about $117,000) in liquid assets and must make a fixed deposit of MYR 300,000 (about $70,000) in a Malaysian bank.
On the other hand, applicants over 50 years of age only need to prove that they have MYR 350,000 ($82,000) in liquid assets and make a fixed deposit of MYR 150,000 ($35,000).
In both cases, the money has to be placed in a Malaysian bank account. We will explain more about these money requirements in the criteria section below. Remember that the cash cannot be touched for at least one year, after which an applicant can petition for their usage to buy housing, a car, cover medical expenses, or pay for children’s education.
For whom is Malaysia My Second Home Visa best suited?
Given the pretty steep initial lay of cash investment, the MM2H visa is particularly recommended to advanced professionals who want to consolidate their businesses in Malaysia and Southeast Asia; and people who want to retire in Malaysia with their spouses and families — consider that you only need one person lodging one application to bring in a spouse on the same, and the children/rest of the immediate family members on dependant passes.
The Malaysia My Second Home Visa, however, is expensive for those young professionals below 50 years of age, or for people who just started out their business. “Some tech nomads or those expats who are working from home can still find MM2H quite suitable,” says Sam. “I also believe that in the current climate of the new normal brought by COVID–19 more people who are still actively working would be interested in this option”.
The next sections of this Malaysia My Second Home visa guide will explain the benefits and requirements of an MM2H visa.
Mm2h Visa Benefits
This section will break down the main benefits that come with having a Malaysia My Second Home Visa.
1) For starters, foreigners on an MM2H Visa in Penang state can purchase a residential property priced from RM500,000/- and above. This benefit bypasses the minimum purchase limit price of RM1,000,000/- for any property — except landed housing — on Penang Island (whereby the minimum threshold is RM3,000,000/-). You can read more about what type of properties foreigners can buy in Penang here.
An application to the State Authority is however still required for purchase by foreigners (with a limited purchase of 2 units for each application).
2) Malaysia My Second Home Visa holders can bring in a foreign maid from countries approved by the immigration policy of Malaysia.
3) Malaysia My Second Home Visa holders can invest in Malaysia, subject to existing Government policies, regulations, and guidelines that are in force for the relevant sectors.
4) Foreign spouses of Malaysian nationals are eligible to apply for MM2H, subject to terms and conditions of the MM2H program.
5) Malaysia My Second Home Visa holders can ship their household goods from their current country of residence in one container without being subjected to any tax & duties. There are no limitations of size, as long as the shipment contains household goods and personal effects, and does not contain any prohibited items, or is used for commercial use.
Mm2h Requirements and Criteria
An MM2H is a coveted visa, but it’s not for everybody. You need to provide a few important documents and proof of financial stability and offshore income. These MM2H requirements are all set per the current criteria set by MM2H Centre and are primarily based on an applicant’s age. Which brings to…
MM2H Age Requirements
Mm2h Application Process for People Aged 50 Years and Above
Applicants aged 50 and over must declare and prove an offshore monthly income of RM 10,000/US $ per month.
To prove it, those who are still employed should provide:
- Letter from their company to confirm their current designation and monthly salary
- Recent 3 months salary slips (i.e. March, April and May 2020 if you plan to submit in June 2020)
- Recent 3 months bank statements that proof a salary transaction credited into your account.
On the other hand, applicants who are retired should provide:
- Proof of pension statement or rental income
- Recent 3 months bank statements that prove pension/rental fee transaction credited to your account.
- Pension letter from the relevant foreign authority, or a tenancy agreement if your monthly income comes from the renting of properties.
- The title of the property, to show that you are the legal and rightful owner of said premises.
To show proof of liquid assets of RM350,000 in the last 3 months, an applicant should provide:
- Recent 3 months bank statements that show that an applicant has a monthly closing balance of RM 350,000 or more.
As a final document, applicants should provide a letter of good conduct from their home country (usually provided by their local embassy in Kuala Lumpur) or country of current residence.
Mm2h Application Process for People Aged 50 Years and Above
Applicants aged 49 and under must also declare and prove an offshore monthly income of RM 10,000/approximately 2500US $ per month. To do so, they need:
- Letter from their employing company to confirm their current designation and monthly salary.
- Recent 3 months salary slips (i.e. March, April and May 2020 if you plan to submit in June 2020).
- Recent 3 months bank statements that proof the transaction of your salary being credited into your account.
They must also prove liquid assets of RM500,000 for the last 3 months, with the following documents:
- Recent 3 months bank statements that show that the applicant has a monthly closing balance of RM 500,000 or more.
At last, you still need a letter of good conduct from your home country.
MM2H Agent: Shall You Use One or Not?
The main issue that most MM2H applicants face is deciding whether they should go DIY or use the help of local professionals. The latter way is choosing between a law firm or an MM2H agent.
Immigration lawyer Sam Choong believes that going with a law firm is better. Why?
Sam Choong explains that mainly, a law firm, contrarily to an MM2H agent, can help you explore other immigration options on top of the MM2H. Rather than solely look at the MM2H visa, a law firm can advise clients about what’s most suited to their different needs, as opposed to fitting everyone into the MM2H solution.
“People seek to relocate or migrate to Malaysia for various reasons,” says Choong, “which include work, opening a business, children’s education, and so on. The MM2H Visa may not be appropriate for all those reasons. There are various other categories of passes, for example, the Guardian pass for one parent of young students, the Tech entrepreneur, the Talent corp for skilled professionals who have previously worked in Malaysia, the employment pass, and the Long term Social Visit Pass, or spouse visa — read our guide to getting a spouse visa in Penang — which have no need to pay up a lot and place a fixed deposit”.
Furthermore, the MM2H visa is further divided into MM2H for Peninsular Malaysia, the Sabah MM2H, and the Sarawak MM2H. Most agents will focus on preparing only one of the 3, while law firms are able to study each client’s needs and make the recommendation that best suits them.
“Our clients tend to be more discerning, time-poor, high net worth individuals who want to know we have their complete interests looked after,” adds Sam Choong. “The conversation is not only about MM2H — Because of our corporate commercial work in Malaysia and abroad (I used to work in Singapore, Hanoi, Ho Chi Minh City, Kuala Lumpur, and have advised clients on acquisitions and disposals of companies around the world) we are able to chat to our clients about international estate planning, tax, setting up companies, legal advise etc.
“My foreign clients tend to be global citizens with assets all over and may not have relocated to Malaysia to just play golf. Some are still looking at business opportunities: when they work with me, it’s like a membership to a club. They can pick up the phone and get me directly on my mobile to pick my brains on anything”.
MM2H Application: Shall I Do it by Myself or Hire an Agent?
The answer really depends on how one values their time and how confident they are navigating through the guidelines for MM2H. There will obviously be cost savings if you can do the MM2H application by yourself. Basically, you must put in the time, thinking, and heavy lifting to reap the financial benefit. But keep in mind that the process can be slow, some immigration officers won’t speak good English, and you’ll be bumped around offices for hours on end if you stumble upon the wrong person on a bad hair day.
On the other hand, if you prefer to have a law firm or an MM2H agent guiding you through all this, the benefits are speed and ease. Agents and law firms are at your disposal to answer calls and questions, advice on immigration, as well as other legal advice such as estate planning and wills. The unofficial reason for having a good lawyer or MM2H agent is like having a “local” friend who will hopefully help you out if you have a brush with the authorities, are involved in an accident or refer you to bankers for placing your fixed deposit or introduce you to estate agents for renting/purchasing your home.
MM2H agents will fill in the forms for you, certify the documents, submit and follow up on your application, and will organize the endorsement of your passport.
Experiences of MM2H Visa Holders in Penang
Penang is especially popular as a destination for expatriates, who love its tropical climate, laid-back atmosphere, ocean life, and sizable Anglo-American expatriate community. We think there’s nothing better than hearing from those who are living in Penang on an MM2H visa to decide if you, too, should make this big leap — and how.
Kirsten and Mark Raccuia
We reached out to former Chicago resident, blogger and writer Kirsten Blumberg Raccuia, who moved to Penang with her husband Mark in 2013. Seven years in, they are still around and haven’t looked back since.
“We started off with a tourist visa and then had a business visa,” Kirsten says. “After we shut our business and Mark turned 50, we decided to get the MM2H visa because it made our lives easier. I was constantly questioned every time we came back into the country, and since we planned to stay in Malaysia for a while, it made better sense to go for the 10-year visa”.
Kirsten mentions that to her and her husband, the most important thing to decide to get a MM2H visa was to be legit and not worry at every border entry. “It’s not cheap,” she says, “but the money we put into the bank here gets a higher return than if it were sitting in a US bank. We look at it as a forced savings plan”. That’s one clever way to put it.
Kirsten and Mark used the services of an MM2H agent. “Actually, I have nothing but good words for our agent. They were professional, kept us informed, and made the whole process easier. I would recommend using an agent simply for peace of mind and because then you know it’s done correctly. They also know the ins and outs of the laws. It is worth every penny”.
Kirsten suggests to whoever wanting to apply for an MM2H visa and live in Penang or Kuala Lumpur that the key is to be patient. “It could take six months or longer to receive the MM2H so plan ahead. Don’t show up in Malaysia and expect it to happen because you are in a hurry. I also recommend visiting Malaysia before you decide to move here. No place is perfect – there are many pros and cons of living in Malaysia, so you want to move here with open eyes”.
Poul O. G. Hoiness, ambassador
The former ambassador of Denmark lives in Penang and loves it. “I had spent most of my career at overseas postings, in the US, in the Arabian Gulf, and East Asia,” says Poul. “When I retired, I decided not to return to Europe, but to settle in Southeast Asia. I looked at a number of alternatives in the region, but I soon started focusing on Malaysia: Some of my friends who had settled here praised the country and pointed to the clear advantages of MM2H. They emphasized the kindness of people, the beautiful nature, the wonderful climate, and the advantageous fiscal conditions of MM2H. They also mentioned the reasonable cost of living, the abundance of quality housing”.
Before applying for MM2H, Poul visited Malaysia a few times to form his own impressions of the country. “I came away convinced that this was the place I wanted to live. I have never regretted that decision. Given the many advantages of MM2H, I do not think the deposits, which MM2H members have to make, are unreasonable.
It might be a good idea to provide MM2H members with some form of residence status,” he suggests.
Even Poul, who was still busy working at the time, decided using an MM2H visa agent. “Unfortunately, the agent I used was not particularly efficient. I have subsequently used other agents for MM2H related tasks, and they were, on the contrary, very efficient. Unless you have a lot of time, I would recommend using an agent… But try to get a good one”.