The Malaysia My Second Home Program

Malaysia My Second HomeIntroduction to Malaysia My Second Home

Also known as MM2H, the Malaysia My Second Home program is a long term multiple entry visa permitting 10 year residency in Malaysia. The program has been running strong since 2002 and as of June 2016 30,194 applications have been approved. All included, this is arguably the best long term visa program available, worldwide!

The mastermind behind the program had sought to create the best long term visa program in the world! As a result, important elements such as price, visa duration, visa renewal, visa benefits and the approval process were meticulously thought out!

Malaysia My Second Home Benefits

It is most prudent to shop around extensively before committing to a long term visa or second citizenship program. As a result, your personal limits and requirements will be fulfilled. However, Malaysia My Second Home benefits make it the relatively least expensive and most hassle free option compared to other visa programs.

For example, in Thailand the visa duration is much less than 10 years and you need to leave the country annually. Additionally, it is subject to short term renewal which may not get approved! Likewise for the visa programs in Hong Kong and Singapore. Additionally, these latter programs are conditional on successful business operations and revenue generation therefore the approval requirements are much more intensive.  

As a result, it is important that all of those interested in one of these programs do their homework and make sure it suites their individual needs. Below I have compiled a list of some of the most pertinent Malaysia My Second Home benefits which make MM2H so very competitive.

List of MM2H Benefits

Malaysia My Second Home Buying Property

Upon approval you will be eligible to purchase real estate in Malaysia subject to a minimal purchase price. The price minimum fluctuates pretty widely depending on which Malaysian state you wish to invest in.

For example, as of January 7, 2016 the minimum purchase price is 2,000,000 Ringgit for Selangor zones 1 & 2. However, in Sarawak State the minimum purchase price requirement is as low as 300,000 ringgit. On average, you should would expect the purchase price minimum to be about 1,000,000 ringgit.

Real Estate Profits Tax 1-5 years 30% of profit
Real Estate Profits Tax >6 years 5% of profit

The Malaysia My Second Home buying property price level is greatly reduced currently due to the depreciation of the ringgit against the US dollar. As a result, for westerners with savings in USD there is currently a 20-30% price reduction. See the chart below for a historical price comparison.

Tax Free Vehicle Purchase 

As of January 1, 2016 an approved MM2H applicant is eligible to purchase a new vehicle assembled in Malaysia that is exempted from the excise duty tax. OR they are eligible to import a pre-owned vehicle that is exempted from import and excise duty tax.

Easy MM2H Visa Renewal

The renewal process is streamlined and it is only necessary once every 10 years. Initial requirements such as asset source verification and minimum net worth are not necessary during the renewal process.

As a result, this makes things much easier and the MM2H administration office currently indicates an average 2 week approval period for proper renewal requests. Required documentation includes:

  1. Letter of Intent by the Principle
  2. Cover letter by licensed MM2H agent (if Applicable)
  3. Applicants passport both original and copy
  4. Original Form IMM.55 + 1 copy
  5. The original form IMM.38 + 1 copy (if applicable)
  6. Original and Copy of Fixed Deposit Statement
  7. If retired, proof of 3 months minimum 10,000 ringgit pension or retirement income
  8. Original and copy of confirmation letter from bank
  9. Original and copy of conditional approval letter
  10. The Original and copy of health insurance policy
  11. Original medical report on RB II form

Platform for Expatriation

MM2H approval is a great platform for expatriation. Malaysia My Second Home benefits include access to local bank accounts and investment accounts. As a result, you can prepare for expatriation by making appropriate financial adjustments. In addition, holders of second citizenship will be able to receive the MM2H approval in their second passport in order to complete renunciation procedure.

Tax Free Residency & Offshore Banking

The government of Malaysia allocates no income tax to successful applicants with foreign income. Therefore, if the income is not sourced in Malaysia it is not taxed by the local authorities.

Additionally, the federal territory of Labuan in Malaysia is a internationally renown offshore banking center. Low tax incorporation may be a good alternative with current tax rates at about 3%!

Withdrawal of Fixed Deposit

After you have received full approval for the Malaysia My Second Home program it may be possible to reduce the fixed deposit amount. Review the following requirements to see if you will be eligible: 

  1. Purchase Real Estate in Malaysia under the applicants name
  2. Medical Expenses
  3. Vehicle purchase under the applicants name
  4. Children’s education

If any of these expenses are incurred in Malaysia then the following fixed deposit reduction may apply:

Applicant <50 years – Fixed Deposit Amount MYR 300,000 – Reduction Permitted MYR 150,000
Applicant >50 years – Fixed Deposit Amount MYR 150,000 – Reduction Permitted MYR 50,000

Malaysia My Second Home Statistics

Malaysia is a multicultural country and the Malaysia My Second Home program is accessible to any nationality in the world. Additionally, approvals are made regardless of race, religion, gender or age. Nonetheless, it is interesting to analyze the country of origin for the applicants. The Malaysia My Second Home statistics reveal some similarities between the multicultural population in Malaysia and the MM2H applicants.

For example, large segments of the population in Malaysia are Muslim, Chinese and Indian. Therefore, many applicants have countries of origin with similar characteristics.

Country of Nationality                   Total (2002 through June 2016)                   Share of Total (%)
Peoples Republic of China                               7,235                                                24%

Japan                                                           3,993                                                13.2%
Peoples Republic of Bangladesh                      3,293                                                10.9%
U.K. & Northern Ireland                                 2,304                                                 7.6%
Islamic Republic of Iran                                 1,326                                                 4.4%
Republic of Singapore                                    1,217                                                 4.0%
Taiwan                                                         1,133                                                  3.8%
Republic of Korea                                          1,098                                                  3.6%
Islamic Republic of Pakistan                            947                                                    3.1%
Republic of India                                            842                                                    2.8%
Others                                                          6,806                                                  22.5%      
Total                                                            30,194                                                 100%

MM2H Approval Chart

Malaysia My Second Home Statistics

The Benefits of Currency Depreciation

The applicant approvals seemed to have taken a slight dip though June 2015. Possibly vacillating applicants were a bit fickle due to exchange rate volatility?

US Dollars to Malaysian Ringgit

However, things seem to have picked up again in 2016 and there was an 18.3% increase in total applicants. This is a prudent move because a depreciating ringgit makes the MM2H financial requirement much easier to meet, especially if your savings are in US Dollars. See the updated statistics below:

Country of Nationality                         June 2015                           June 2016                   Change (%) 2015/1016
Peoples Republic of China                          48                                     103                                   114.6

Japan                                                      34                                     20                                     -41
Peoples Republic of Bangladesh                 11                                     17                                      54
Republic of Korea                                     13                                      8                                     -38.5

U.K. & Northern Ireland                            10                                      9                                      -10
Commonwealth of Australia                       5                                        6                                        20

Taiwan                                                     5                                        5                                        0
Republic of Singapore                                8                                        4                                      -50
United Sates of America                            8                                        5                                      -37.5
Republic of India*                                     4                                        2                                      -50 

Others                                                     40                                       41                                     2.5               
Total                                                     186                                        220                                  +18.3%

* The statistics for the Republic of India (ROI) may have been flawed because there is a conflicting document on the MM2H official website which indicated 26 approved applicants from the (ROI) in the 1st 6 months of 2016.

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Malaysia My Second Home Application Form

The Malaysian government will permit you to submit your own Malaysia My Second Home application form. Although there is a significant amount of supplementary documentation that must be properly submitted. As a result, not submitting the correct documents in the correct manner will result in significant delays.

For example, the MM2H approval board only meets once a month. Therefore, every time you incorrectly submit some required paperwork you should expect a minimum of one month additional delay.

Furthermore, even a perfectly submitted application package currently requires a minimum 3 month approval turn time! Nonetheless, for the intrepid and meticulous applicant self submission is still an option.

MM2H Application Form Submission Documentation:

  1. Cover letter for MM2H Application
  2. Completed resume for main applicant including the main applicants academic background, work history and acquired expertise
  3. MM2H Application individually completed in full for the main applicant and each co-applicant. The MM2H application can be downloaded from the MM2H government website.
  4. 3 copies of the IMM.12 (social visit pass) completed by the main applicant and each co-applicant individually. Include one original copy and 2 photostat copies
  5. 4 colored passport size photographs
  6. Copy of all pages of passport/travel documents with certification on appropriate pages for personal particulars. Additionally, if the passport has been renewed within the previous 12 months then copies of all pages of the previous passport are required.
  7. Letter of Good Conduct (LGC) from your countries relevant agency. Relevant agency can be the police or FBI from your home country or the LGC can be prepared by your country’s embassy based in Malaysia provided that it is attested and it references the appropriate police authority from your home country.
  8. Self declaration of health conditions of all applicants using the appropriate form available on the MM2H official website.
  9. Proof of health insurance
  10. Certified copy of marriage certificate if a spouse is included on the application.
  11. If accompanied by children, a certified copy of birth certificates is needed and all accompanying legal documents e.g if the child is adopted or is a step child or a child from previous marriage then acceptable authorization is required from both biological/legal parents. Additionally, the main applicant must make a statutory declaration that they are financially accountable for all their dependents in Malaysia. Plus, for children (under 21 years of age) with disabilities a letter of confirmation will be required from a medical specialist.
  12. Certified copy of 3 months bank statements or financial statements to indicate financial wherewithal to qualify for the Malaysia My Second Home program.
  13. Most recent 3 months certified copies of pension slip/pay slip/income statement if self employed
  14. Authorization letter from the applicants to the MM2H ministry authorizing them to independently verify the submitted application documents.

*The list of required application documents is generalized and is subject to change without prior notice. Moreover, the MM2H ministry will apply additional requirements if necessary at their sole discretion. Therefore, Global Travel Press does not guarantee the accuracy of the listed documents.

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Malaysia My Second Home Financial Requirements

For the initial application process the government ministry will require the applicant to show adequate financial strength. The inflection point for the requirements is 50 years of age. As a result, being a minimum of 50 years old significantly lessens the financial elements of approval.

Applicant                                                  Below 50 Years of Age                                      Above 50 Years of Age    

Financial Strength                                Over MYR 500,000 Equivalent                          Over MYR 350,000 Equivalent
Monthly Income                                        Minimum MYR 10,000                                          Minimum MYR 10,000
Fixed Deposit                                                  MYR 300,000                                                       MYR 150,000
Government Pension                                             N/A                                                                MYR 10,000 

                                                                                                                                                                                                             

For those above the 50 year threshold there are 2 options available.

  1. Place MYR 150,000 fixed deposit OR
  2. Show evidence of a fixed government pension of minimum MYR 10,000*

*Government pension only, private pension not allowed

Malaysia My Second Home Agent

It is highly recommended that applicants acquire a high quality Malaysia My Second Home agent to submit the application on their behalf. There are a lot of MM2H agents in Malaysia and it is important to choose carefully. As a result, your agent will not just be looking to shuffle some papers and collect a paycheck. It is imperative that the Malaysia My Second Home Agent that you procure is intimately familiar with your situation. 

Malaysia My Second Home Agent Facts:

  1. MM2H agents are relatively inexpensive compared to other long term visa programs. Therefore, it makes economical sense to use one.
  2. Government institutions worldwide are notoriously fickle and they do not respond well to incomplete, incorrect or insufficient applications and supplements. Omissions and errors can result in significant approval delays or outright rejection!
  3. Qualified agents facilitate significant savings in efficiency and cost to meet the requirements of MM2H e.g. medical exam, health insurance, fixed deposit and pension requirements
  4. After MM2H approval, your Malaysia My Second Home agent will be a very valuable friend to rely on when you need to address local matters. For example things like acquiring a Malaysia drivers license, property purchase, legalities, relocation and local heath care. It will be very helpful to have a local source for professional referrals and to help speed up bureaucratic delays and inefficiencies.

Choosing a good agent to represent your interests will require some intuition. Send 5 emails and see what the responses are like. As a result, many responses will probably be boiler plate because the agency does not want to spend any more time than necessary if they don’t know for sure if they will the chosen representative. This is a sure sign of indifference and indolence. However, a more appealing response would inquire about your personal details. An expressed interest in learning more details should be a good indication that you are on the right track.

The Malaysia My Second Home Forum

Using a forum as an information source is kind of like relying on Yahoo message boards for investment advice. Therefore,  a more prudent applicant would hopefully have more self respect and intuition than to rely on a Malaysia My Second Home forum for information. Pertinent information needed for analysis is all available online from more reliable sources.

As a result, all core requirements for the MM2H program are available on the government website. From there, it is possible to study the requirements. Subsequently, after you have selected your agent you can get everything in order and it will go much more efficiently since you have done your homework.

Relying on a Malaysia My Second Home forum is akin to second hand information. As a result, you will be relying on tips that have been passed through the grapevine e.g. barroom gossip. What you wind up with is inefficiency and additional expenses. However, I suspect if you really don’t know the difference then it is all the same. I know some property agents who would love to sell these people some “luxury” condos on an exquisitely built resort priced just for the more discerning middle class consumer!

Malaysia My Second Home Problems

Compared to second citizenship applications the Malaysia My Second Home approval process should be a piece of cake! Nonetheless, problems come up occasionally. However, most of them are self inflicted or otherwise are specific to personal circumstances. 

Bank Verification Letters

I read some of the blog commentary online and one of the issues a US applicant cited was difficulty getting Bank of America to write an account verification letter. I completely understand this problem! However, I had switched my US accounts to a credit union 10 years before I even thought of applying for MM2H approval. I emailed the customer service department and I had the original account verification letter 3 within business days. So I guess, this is one more good reason not to trust US banks if you have not figured that out already!

Islamic Values

Islamic values may be a deterrent for some of the MM2H applicants. This is because of ignorance mostly, or possibly fear of restricted freedom of expression. For example, at the 2016 Formula One races in Kuala Lumpur a group of Australians deemed it a good idea to drop their pants after the race in front of the television cameras. They were promptly arrested!

Being Australian, they were let off with a slap on the wrist. Although more severe punishment may be expected in the future. It just goes to show what is completely normal behavior in Australia is not so welcome in an Islamic country. However, if you are like me you will see this as an asset and not a Malaysia My Second Home problem. We can always go to Australia if we need to drop our pants publicly.

Currency Volatility

The Malaysian Ringgit has depreciated to levels last seen during the Asian financial crisis in 1997. These levels are extreme! First of all, there is obviously no financial crisis happening in Malaysia at this time. In fact, the Malaysian economy is steaming ahead with 4% GDP growth in 2016 and more of the same expected in 2017.

ASEAN countries are a global economic growth hot spot for the future and this is a good place for future investment. Chasing the US dollar bubble will eventually backfire. Therefore, this Malaysia My Second Home problem is also an asset and not a complication. Why not buy in at the 30% discount? On the Malaysia My Second Home forum they are likely waiting until the ringgit returns to normal levels. I am as perplexed as you are.

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Sources:

http://www.mm2h.gov.my/index.php/en/home/
http://www.xe.com/currencycharts/?from=USD&to=MYR&view=5Y
https://www.penangmyhome.com/mm2h-visa-requirements