MM2H New Rules Implement Soon

Latest update from March 2017

My husband and I currently live in Thailand and are considering relocation to Malaysia under MM2H.  This announcement is troubling, esp. the part about increasing the fixed deposit to RM 500,000.  That would be a deal-breaker for us.  We don't want to take that much out of our 401K retirement savings and move it to Malaysia.

Any news on whether this proposal will be accepted?  If it is enacted after we relocate to Malaysia under MM2H, would the previous requirement be "grandfathered" or would MM2H participants be expected to bring in more funds to top off their fixed deposit to RM 500,000.  What has been the history in the past when changes were made?  Were exisiting MM2H holders grandfathered?

At the moment still no confirmation from government side. Still follow the current requirement which just need to deposit 150k for those above 50 years old.
Apply as soon as possible while haven't implement the new rules.

Thank you for your quick reply, Patrick.  Will they "grandfather" those who come into MM2H at the current requirement or require all current MM2H visa holders to top-up their deposits to the new level.

Thailand has a history of "grandfathering" those on retirement visas whenever they've upped the requirement for in-country bank deposit.  It would be good to know that this is the history in Malaysia, too. 

Of course, I realize history is no guarantee of future performance, but it would be nice to know the history in Malaysia like I do for Thailand.

NancyL wrote:

this announcement is troubling, esp. the part about increasing the fixed deposit to RM 500,000.  That would be a deal-breaker for us.  We don't want to take that much out of our 401K retirement savings and move it to Malaysia.

I wouldn't do it, the income tax on that size of withdrawal would be the deal breaker, that and only earning only 3% on that large amount of my nestegg. Don't know (actually have a good guess) the motivation for the proposed change, but at least for most Americans, who have the bulk of their savings in tax deferred retirement accounts the program doesn't work anymore.

Yes, that's exactly the problem.  We already have about U.S.$25,000 on deposit in Thailand that presumably we'd be able to move to Malaysia and coming up with another $10,000 isn't a big problem, but we'd have to cash out 401K savings if the requirement was moved to RM500,000 and it would push us up into a higher tax bracket that year.

As it is, our financial adviser wants us to make the move this year, but wait until next year to buy a car to to spread out the 401K withdrawals.  That is if we relocate to KK.  (Don't need a car now, public transport is good in Chiang Mai)

As it is, I'm having a hard time figuring out how to apply for MM2H ourselves for Sabah state.  Great online application for western Malaysia http://mm2honline.motac.gov.my/

and Sarawak seems to have their act together for D-I-Y application  http://www.sarawak.gov.my/web/home/arti … w/221/279/  Not exactly online application, but enough info for a D-I-Y effort.

But nada for Sabah state, despite a serious afternoon with Google.

The reason for the change is always the same, to attract the wealthier people and reject the poorer people. When the program started it was not really reasonable but it could at least attract a wider and diverse group. But as the country depleted its funds through scandals and waste, it had to be made up somewhere and that was on the backs of expats, among others. The govt looks for cash any possible place it can be found and for that reason alone I'll never join MM2H.  If I choose to retire here I'll do it another way. Most people just think about how to meet the requirements without giving a thought to the fact they are actually handing over assets to total strangers (who are not even on your side) that run the risk of never being returned.

About 13 years ago I opened a good-sized FD at Public Bank and just let it be. Problems like 1MDB have been gnawing at me for a while and I thought it better to have a hard asset here, nothing represented by a piece of paper in a bank. Last Friday I went to close it and they did everything possible to dissuade me. When I got angry and started to lose it, they offered to close it by paying a few hundred RM per month instead of a lump sum. I'm sure thats not even legal to propose. Its absurd. On Tuesday, I'll go to KL from Penang to close it outright and im fearing i'll have to get the police and then a lawyer. Who knows.

Stop thinking and worrying about requirements, think instead about who you are giving assets to and how to get them back when you want out, while remembering you have no special rights here, if any at all (I cant think of any.) This is still the third world with its own jungle justice. Be careful, this is your life at stake, and there wont be anyone around to help you when things go bad and when it can be rightfully said that nobody forced you to dive in.

Even if RM500,000 was reasonable, (it isnt), consider what you are getting in return. Not much. For RM500,000, we are talking countries here, Dominica will give you citizenship and a passport, and so will Ecuador for a lot less. But here? The right to buy a car? And for that, no collateral is offered for your "loan" to the government? Uh, no. Almost 18 years here, i never met anyone i'd trust enough to give that money to, so im highly suggesting to think thrice about MM2H plans.

I've had FD's with several banks in Malaysia and played with FD's for a long time, and when it came to closing them I've never had that kind of problem or experience that you've had. All I needed was to bring my passport and that was it, they'd close accounts and put the money into my savings or current accounts or transfer it to other banks, whatever I wanted done. Even if I'd lost my original FD Certificates, they'd debit me a relatively small amount as a penalty or replacement charge.

For buying a car, about 8 years ago I bought a car for RM91k. If I didn't have the tax-free discount then it would have cost me RM145k, so the advantage is there. The only other advantage as I see it is that you and your family can enter and leave Malaysia easily whenever you like (prior to that we entered on tourist visas) and at KLIA2 you can be fast tracked through immigration.

However, most of the other stuff you talk about I completely agree with you. I think MM2H is no longer an interesting proposition. If you have the finanaces required for MM2H then perhaps consider living somewhere else.

We're not exactly newbies to retiring overseas.  Hubby and I have been in Thailand for nine years and have $25,000 tied up in a Thai bank to justify my retirement visa.  I've seen some retirees have trouble getting their funds back (not many) because the individual bank managers are "graded" on how much is on deposit in their banks.  I've seem much bigger problems with overseas heirs trying to claim the accounts because the retirees never bothered to execute Final Wills.  This money isn't a "loan" to the Thai gov't any more than the funds on deposit in Malaysia is a loan to the Malaysian gov't.

I'd like to focus on my questions:  what has been Malaysia's history in the past when they've changed the rules with MM2H?  Do they "grandfather" the requirements for existing visa holders or force them to up their deposit accounts, too?

And does anyone know how to get started on a D-I-Y MM2H application for Sabah state?

I can't answer your question because this is new territory, they haven't changed the rules this much since the program began. Best guess, and it's a guess only, is that if your in the program the rules won't kick in until you renew. But that could be a HUGE problem if you've set up a new life here and all of a sudden you need to find a large amount of money.

However it's anyone's guess as to how they grandfather folks already in the program given the desire to bring in foreign capital for reasons given.

Hi Guys
can anyone tell if the changes apply to Sarawak MM2H, as they have a slightly different rules.
As I am planning to start the process this time next year, I have also read that bringing your own car will stop in 2019.
Any advise would be helpful.

Thanks Simon.

Anything can happen in one year. Bringing your car stopped January 2018 from the Ministry concerned, also tax relief on locally assembled car purchase - It waits to be seen if Sarawak is somehow exempt?

Some interesting tax free car stuff for Sarawak from last July - file:///C:/Users/diane/Downloads/MM2HEM_26.07.17MetNon-Met.pdf

This info is currently online - http://www.mtacys.sarawak.gov.my/upload … itions.pdf

The information above is dated August 2017. There is also a new application procedure announced

http://www.mtacys.sarawak.gov.my/module … sub_id=179

So far the either/or option about having a Fixed Deposit has become mandatory in Peninsular Malaysia for both the over and under 50s categories, so the question is whether Sarawak is also going to change. It's about maximising tax revenue in lean times.

This is a roundup of the changes which may affect the Sarawak application in future. If you have info about the 2019 import/purchase rules please could you post the souce to help others.  Tq.

The "Federal" - "State" thing is sometimes hard to fathom

Sarawak MM2H has entirely different rules than Peninsular Malaysia because it has an independent Immigration system. I doubt they will change much and may even try and take advantage of what appears to be a bonehead move by Semenanjung (Federal Gov't). For retirees it would be the "go to" spot and offers at least as much charm and ambiance as Penang and Ipoh.

If this happened I'd be over talking to various State Ministers about:

1) changing the bonding requirement to allow self-deposit of the Security Bond. That's the main barrier in my thinking to finding a sponsor. If there was no, or reduced risk , financially for local sponsors they'd be happy to act as introducers and supporters.

2) perhaps expanding the program to people under 50, provided they could demonstrate the same income levels as retirees.

Then publicize the wazoo out of it....Air Asia is talking about direct flights to Jakarta and Bangkok soon and already has one to Langkawi and Shenzhen. And Tony Fernandes wants to build a separate terminal hub in Kuching for even more flights. “Sarawak is a brilliant point between North Asia and Australia. We see it as Dubai of this part of the world. People come out from Australia can stop in Kuching before they go to China and vice-versa; China, Korea and Japan can stop in Sarawak for few days and go down to Australia. I think it is an equitable distance and it's a great location and that is why I am very keen to have our hub here,” he said.

Gravitas wrote:

Anything can happen in one year. Bringing your car stopped January 2018 from the Ministry concerned, also tax relief on locally assembled car purchase - It waits to be seen if Sarawak is somehow exempt?

Some interesting tax free car stuff for Sarawak from last July - file:///C:/Users/diane/Downloads/MM2HEM_26.07.17MetNon-Met.pdf

This info is currently online - http://www.mtacys.sarawak.gov.my/upload … itions.pdf

Good question about whether the tax relief on vehicles will continue in Sarawak. The Road Tax rates are different between the Peninsula and Sarawak and Sabah so perhaps the tax relief on locally produced vehicle provision would continue.

"The JPJ (Road Transport) spokesman added that the difference in road tax was part of an agreement signed during the formation of Malaysia in 1963, and that vehicle owners intending to use their vehicles in Sarawak have to declare their vehicles to JPJ. “In fact, any vehicle, even a motorcycle, registered in Malaya has to indicate which territory in the country the vehicle will be used,” he said."

Most of the expats here tell me they don't even bother with buying a new car. They get a used one.

Any word on the date of the implementation of these new rules?? It's been a year since they were broached.

In actuality the Sarawak M2H quite different program from the MM2H. Here's a summary of the differences.

It's essentially for 50+ in age (mainly early or late retirees - or seniors with off-shore income) some exceptions if one has dependent children in hospital or local school. Like the mainland version you cannot work without government (Immigration) approval.

Other Differences-
1) No agents allowed (although there may be one or two recently allowed- check with Sarawak Ministry of Tourism)
2) No proof of liquid assets required, at all.
3) No proof of "good behavior" from the police in your former place of permanent residency required.
4) Only 5 Year Renewable Multi-Entry Visa (vs. 10 on the Peninsula) but was assured that if you still have your pension and haven't acquired drug addiction or untreatable communicable disease then "it's a formality".
5) You can actually live anywhere in Malaysia under Sarawak M2H, but if you have MM2H you cannot live long term in Sarawak or Sabah.

Requirements:
6) Your sponsor must sign promissary note (cost RM10 Stamp Fee) to pay bond if acceptee is deported (depending upon country of origin this can range from RM200 to RM2000). They are not required to post this money "up front".

On mainland, either applicant pays this refundable bond "up front" to immigration or to the agent.

7) You have two options to qualify
a) Pension option ~ RM10,000/month (couple) or RM7000 (single)
OR
b) Fixed Deposit option RM150,000 (couple) or RM100,000 (single)

8) You MUST Apply in Sarawak, not outside the country. This makes on susceptible to the "Journey Performed" Fee of RM2000 if you come in on a tourist pass.

9) Two month cycle from application to acceptance (rejection of incomplete or unqualified applicants usually occurs in the first two weeks).

The applicant who choses the "Fixed Deposit" option can take out money from the Fixed Deposit for purchase of property, healthcare, or child's education. A minimum of RM60,000 must remain established in the account.

While most States on the Peninsula have substantial minimums for the purchase of property (RM500,000 -RM1,500,000) in Sarawak it is only RM300,000.

So for people who can demonstrate regular @US$1800(single) - US$2570(couple) from regular pension + annuity + 401K/investment account warrants, but cannot demonstrate  high levels of liquid assets or cannot place a large amount in a Fixed Account...the Sarawak My Second Home program is a much more affordable option.

This will be especially true if Malaysia imposes these new requirement. You could get your SM2H in Sarawak and still live in Penang if you wished!

The gov. Decided that any approved MM2H done in 2017 would still be able to claim the tax benefits regarding vehicles until 31 December 2018. Nice move guys!!

I think, there is something else to be considered between Malaysia, Thailand, Philippines, Sri Lanka and other countries to retire, the cost of living, everyday groceries, gas, petrol and then again another important item to consider is security

Update on whether the  tax allowance on locally-made or manufactured cars would be rescinded in Sarawak. My understanding that as the Customs and Tariff is a Federal Function (one always had to apply to the Federal Customs Agency to have the taxes waived) that Sarawak would have no control over this. However you can still import your used personal vehicle to Malaysia tax-free. That would also apply to Sarawak. Mind that you must import your car quickly after you receive your MM2H or Sarawak M2H visa.

As far as costs and safety...those are certainly important issues. But one also must fine-tune this. Security considerations in Bangkok or not the same as in Chiang Mai or Hat Yai. Issues in Mindanao are not the same as in Cebu. In Malaysia the security issues are not the same in Semporna as they are in Kota Kinabalu or Kuching. Crime levels differer from city to city as well. Kuching has very little "stranger" violent crime, and other crimes (burglary, theft, are minimal compared to most larger European (or dare I say) American cities...or even Penang, KL, and certainly Manila.

Costs will relate to ones lifestyle. If one eats local foods, isn't a heavy or hard alcohol drinker, etc. costs can be vastly lower than if one maintains a profligate lifestyle. There's a pretty good website that will allow one to estimate costs that is "fairly good" though I've noted wide discrepancies of certain categories from the "real price". See expatitstan  or nomadlist or numbeo (all dot com) sites.

Apparently the MM2H HQ has posted the (partial) new regulations regarding the MM2H eligibility. It comes up as an flashing announcement along with statements about the termination of the Local-Built car tax benefit and some information about the "Letter of Good Conduct".

"03 April 2018
Discontinuation of The Reduction Of Fixed Deposit Placement Based On Property Purchase And MM2H Approval By Government Pension

Kindly be informed that MM2H Centre has discontinued the reduction of Fixed Deposit placement based on property purchase worth RM1 million and above in Malaysia.

Also discontinued is the MM2H approval by government pension for MM2H applicants aged 50 years and above. This means all MM2H new participants must place Fixed Deposits to join this programme. This does not apply to existing MM2H participants who were approved under government pension."

Whether the proposed changes announced in the amounts of the FD will be upcoming in a subsequent announcement is unclear. But it does seem that at least ONE (and one unannounced change) is now in place.

Yeah. I totally agreed. I worried about the evacuation issues too. I am the poor retirement group, the lockup means a lot to me. The house they let foreigner to buy in fact hard to see any 2nd hand market and the FD might take some effort.
Hope the government consider the impact of growing ratio of affluent migrants...we all know which country. Look at Australia, Singapore, Hong Kong.  I go anywhere in the world to stay out of their impact. Once they were there property shot up and so the cost of living. There are lots of social and cultural problem indeed.

Kelly

Generally speaking Malaysia is not a destination for affluent westerners. It's more a cheap option to escape high COL such as in Australia.

Very few expats on MM2H actually buy property as rental levels are low and purchase price and costs high.

Penang island is the MM2H hub these days as it has social opportunities which are sorely lacking in KL.

But Penang just raised it's lower MM2H purchase price and imposed a new levy to deter speculation. That reinforces the rental market.

It's still possible to live off the interest on a large FD equivalent to price of purchasing property.

Agree, Gravitas....the increasing "base-price floor" for foreigners (and MM2H participants) to purchase property prices many of them out. I wonder whether there were more people that bought property in the past than after they raised these "floors" upward?

I'm wondering if this has had the opposite effect than desired. If foreigners could buy lower priced housing they would create a demand at the lower end of the market...and more of that type of housing would be built. Foreigners are also looking for good deals, though probably of types of units that might not be designs that are common in the Malaysian market anymore. Why are there no smaller elevated stand-alone bungalows with surrounding yards (essentially the tropical "ranch house")...but with all-Mod Cons vs. these semi-attached pseudo mansions with Neo-Gothic façades.

If, however, you place a high floor on price, then the foreigner goes into the rental market. They purchase from a "speculator", one who purchases but doesn't live in the unit, and who is hopeful that the average rental price will increase over time. My landlord has five condos that he rents out to foreigners.

If you want to end "speculation" simply require people who purchase to live in the unit. They don't want to end speculation, though. They want to end "foreign speculation" (hence limits on the number of units an MM2H recipient can purchase). Does this limitation exist for other - non-MM2H - buyers?

I thought the ceiling on number of units purchased by foreigners was removed a couple of years ago.

For MM2H on Penang it was 2 at the lower purchase entry level but any number of further properties at the going rate. The State system affects the entry level but only Penang had a rule specially for MM2Hers which was removed last week.

Didn't know that...but that would certainly encourage speculation unless they required occupancy by the purchaser. This just encourages increasing property cost "at the going rate".

The website Propertylife.my states

"Anyway, most importantly, in a number of states MM2H visa-holders can buy property below the RM1,000,000 threshold that otherwise applies:
In Kedah, there is no minimum purchase price on properties bought by MM2H visa holders. [vs. RM 1 million]
In Perak, the minimum price is RM 350,000 as opposed to the RM 1 million for non-MM2H visa holders.
In Penang, the minimum price drops to RM 500,000 although that's limited to a maximum of 2 units.
In Sarawak it's RM 300,000 for MM2H visa holders as opposed to RM 400,000."

I'd also note that States like Johor have issued exceptions for specific developments like Medini and Forest City.

An interesting article on the effects of the first floor increase in 2010. Another doubling took place in 2014.

http://www.propertymalaysia.my/index.ph … ty-buyers/

I guess the Penang criteria no longer applies.

Yes that's true. I want to have my own house but not a negative asset. The more closer to retire the more dont want to be tied down by mortgage unless yield is convincing.

The secondary property market is virtually dead becasuse there is so much new building going on and people prefer new to old. Properties deteriorate quite quickly (some have poor finishes to start with) and suffer from lack of maintenance often due to defaulters not paying their service charges.

Question regarding a post above: " You can actually live anywhere in Malaysia under Sarawak M2H...".
Can you live in Sabah under Sarawak MM2H?
Does application to Sarawak MM2H cover Sabah?

expat000 wrote:

Can you live in Sabah under Sarawak MM2H?
Does application to Sarawak MM2H cover Sabah?

Yes, and yes. I think this is the same question? Or is there a nuance that I am missing?

MM2H allows one to reside permanently anywhere in Peninsular Malaysia (but not East Malaysia).
Sarawak MM2H allows  the applicant to reside ANYWHERE in Malaysia.
Sabah MM2H allows one to live in Sabah or Peninsula Malaysia.

For both the Sabah and Sarawak MM2H you must be physically present to apply, undertake interviews, and pick up the visa. In Sarawak you need a local  (Sarawakian) sponsor.


Because Sarawak and Sabah retained independent Immigration authority when they joined with Malaya (to form Malaysia) they have separate Immigration rules. The most important of these is that West Malaysians need work permits to work in the East. This was done to protect the opportunity of local Sarawakians and Sabahans to get jobs. The fear was that Malayans or Singaporeans (also then a member of the Federation) would flood in and marginalize the East Malaysians.

Another feature of having separate Immigration authorities is that visitors to these States need to go through a separate immigration...get stamped again, etc.

There have been some compromises. It used to be that visitors to Sarawak or Sabah  could only get a one month visitor stamp, but now it is three months...with a maximum of 3 months total in Malaysia.

So having separate Immigration means that Sarawak and Sabah MM2H have some differences in rules, financial requirements, allowing/disallowing pensioners to avoid having a fixed account, single vs. couples, etc.

cinnamonape wrote:

expat000 wrote:

Can you live in Sabah under Sarawak MM2H?
Does application to Sarawak MM2H cover Sabah?

Sarawak MM2H allows  the applicant to reside ANYWHERE in Malaysia.
Sabah MM2H allows one to live in Sabah or Peninsula Malaysia.

If we get Sarawak MM2H, can we be allowed to live for several years years in Sabah or KL? Will this be a problem for renewing Sarawak MM2H in 10 years?

If we get Sabah MM2H, can we be allowed to live for several years years in KL? Will this be a problem for renewing Sabah MM2H in 10 years?

Thank you.

Sarawak M2H is issued for a period of 5 years (contrary to the Ministry of Tourism website), and renewable at that time. From what I've heard renewal application is a formality, provided one resubmits the Fixed Deposit (a five year term allows one to change banks, BTW), and submits a new Health Check without evidence of having contracted TB or other highly transmissible contagious disease in the interim.

However one must take the test and establish the account in Sarawak, which requires one to visit. 

I believe that Sabah issues a ten year visa. Again one is expected to submit the needed documents in Kota Kinabalu. Sabahs regulations are similar to the MM2H.

Sarawak's rules and program is different enough from MM2H that one should really think of them as different programs.

You do not need to LIVE in Sarawak or Sabah (or even in Malaysia) to apply there. There are certain benefits in doing so (lower property purchase floor, nature, and in my view, lower crime and better mix of communities)...but other people may weigh their social needs differently.

Thank you!

Dear all! I came across this forum while researching for information on how to switch my current MM2H Pass (dependent) to a Working Permit. I am currently looking for a job here in Kuala Lumpur and  and I would like to  know the procedure to convert my Visa type. Has any of you done this before? Are you aware of any agency that can support me on this issue? Thanks a lot.

You can ask MM2H office. Most likely you would need to end your MM2H, since it doesn't allow to work here,  and then to apply for a work permit.

Thank you for your kind reply. I understand I need to leave the program and get a Working Permit. From my understanding the employer will apply directly through the ESD system (Expatriate Services Division). Just wondering if anybody has an idea of the time required for the switch (when the procedure goes smooth, with no issues). Also, can this be done in Malaysia or the applicant must go back to his own country?  Thank you all!

cinnamonape wrote:

5) You can actually live anywhere in Malaysia under Sarawak M2H, but if you have MM2H you cannot live long term in Sarawak or Sabah.

This rule was changed recently. If you want your MM2H to be renewed, you need to live for sometime in Sabah and have a bank account in Sabah. It is not well determined for how long you would need to live there.

carlamulas wrote:

Thank you for your kind reply. I understand I need to leave the program and get a Working Permit. From my understanding the employer will apply directly through the ESD system (Expatriate Services Division). Just wondering if anybody has an idea of the time required for the switch (when the procedure goes smooth, with no issues). Also, can this be done in Malaysia or the applicant must go back to his own country?  Thank you all!

Perhaps it is better if you start a new thread specifically for this question. This thread is for the new rules in mm2h.