Is The Malaysia My Second Home (MM2H) Visa Programme Still Attractive?

The popular Malaysia My 2nd Home (MM2H) retirement visa programme seems to be in the doldrums after new regulations were announced by the Home Ministry Secretary-General Wan Ahmad Dahlan Abdul Aziz on 11 August 2021. The programme will resume in October 2021, after being suspended since July 2020 by the Ministry of Tourism, Arts and Culture (MoTAC). 

Similar retirement visa programmes have been launched in the region so the expectation was for the programme to be strengthened for it to be more attractive, to uphold Malaysia as a retirement haven compared to those offered by:

• Thailand’s Elite Visa
• Philippine’s Special Resident Retiree’s Visa (SRRV)
• Indonesia’s “Visa Tinggal Terbatas untuk Wisatawan Lansia Mancanegara” 

International Living magazine, which ranks cities around the world for retirement living, consistently ranks Malaysia within top 10 countries in the world to retire and the number one country in Asia.

Introduced in 2002, MM2H is the pioneer retirement visa program in Asia and has since approved more than 57,000 visa-holders and dependents to reside in Malaysia on 10-year renewal term. With beautiful landscape offering mountains, lakes and coastline to multi-racial ethnicity, low cost of living, affordable healthcare and great air connectivity, it is no wonder that many call Malaysia their long-term home, some intending to live there until the end of their lives. 

The pandemic dealt a severe blow to the programme when Malaysia closed its borders last March to contain Covid infection, stranding visa holders who were out of the country and not allowed to return. For some, Malaysia has been their only home. It was a harbinger of things to come.

New Regulations With Effect From October 2021

While many are relieved that the programme is being resumed, the harshness of the new regulations take many by surprise. I now ponder if it is worth renewing when my visa expires, due to these announced changes:

1. Fixed deposit – raised to RM1,000,000 (US$235,000) from current RM150,000 – RM300,000 (depending on age), and additional  RM50,000 per dependent which was not required before. This is a multiple-fold increase! Even if 50% can be withdrawn for property, medical or education purpose, it is still a lot of money to be locked in a depreciating currency. Some countries,  Thailand for example, allow equivalent value to be posted in US dollars for the FD, reducing exchange rate risk. 

When we opened our FD mid 2015, RM300,000 was worth €74,000/ US$78,000 versus €60,000/S$70,000 currently, a whopping loss between 10%-19%, depending on which currency is being measured against. Enough said. 

2. Proof of liquid assets – raised to RM1,500,000 from RM350,000 – RM500,000. While this amount need not be brought into Malaysia, it is a big sum especially since real estate is excluded as it is considered illiquid asset. For retirees living off rental income, this will be difficult to meet.

3. Offshore income – revised from RM10,000 to RM40,000 (€8,000/US$9,000) per month. This is not an income level common amongst retirees. 1 of the reasons people retire in Malaysia is the low cost of living so it is incomprehensible why this jacked-up level of income is required. At that level of income, one can live like a king in most developed countries, why would one choose Malaysia?  

4. Minimum stay – 90 days per year while in the past no such requirement applies. Since attaining the visa, our longest stay had been 3 weeks as Malaysia is like a 3rd home to us, as our primary residence is in Holland and my home country is Singapore. One possibility is to live in Sarawak, where the requirement is 15 days, though it is anybody’s guess if this will be changed too.

5. Visa duration – halved from 10 to 5 years. While the duration is not a problem in itself, it is a huge discomfort as new rules may apply when visa is being renewed, as is the case now. This shortened duration increases the uncertainty of the programme, throwing a big spanner to retirement plans.

Existing visa-holders will be given 1 year’s grace to meet the new criteria. Seriously? How can earth can monthly income be quadrupled to €8,000/US$9,000 plus top up FD to RM1,000,000 (€200,000/US$233,000) within 1 year…and for a retiree?

6. Minimum age – the new scheme is offered under 2 age groups: 35 – 49 years and those above 50. Before this change, applicants older than 21 years can apply for MM2H in their own right, which was how a friend applied separate visa for her 25 year-old son who was too old to qualify as a dependent. 

7. Renewal and Processing fees – visa renewal fee revised from RM90 to RM500, an increase of almost 5-fold. A new processing fee has also been introduced at RM5,000 per main applicant and RM2,500 per dependent. Factoring in agent fee, total cost for husband and wife can easily double to RM15,000 (€3,000/US$3,500), hefty compared to regional visa programmes.

8. Cap of MM2H holders – limited to 1% of Malaysian population, currently at 32.7 million. This means the programme can admit up to 327,000 visa holders, which has room to grow as only 57,000+ applicants and dependents have been approved since introduction.

9. New rules apply for renewal – this is the nail in the coffin for many current visa-holders, including myself. For how many can meet the onerous conditions when renewal time comes?

Only Time Will Tell

Will there be an exodus of MM2H visa-holders once the new regulations kick in? As at date of this post, the official website still displays a suspension notice and the new rules are not updated yet. With the big uproar and criticism from visa-holders and vested stakeholders such as visa agents, real estate association, business communities and the press, one wonders if the rules will be reconsidered or relaxed. 

Isn’t it ironic that the purported scheme’s review was “part of a strategy under the National Economic Recovery to boost the economy” after being walloped by the Covid pandemic, that it ends up driving visa-holders out of the country, bringing with them wealth and much-needed spending power?

By all counts, the MM2H programme has been a success contributing billions to the economy and putting it on world stage earning Malaysia accolades as one of the best places to retire. Why would the government want to kill this golden goose?

A friend living in Penang under the MM2H visa, who is organising a petition, lamented:

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“MM2H folks are not a priority to the government as we don’t vote.”

Hmm, I’m not so sure about that as one can always vote with one’s feet.

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Personally, regardless of how attractive a country is, there is no point staking one’s future and plans on shaky grounds that can be rocked so dramatically and adversely. Livelihood, lifestyle and life plans are not aspects that can be changed easily, or even if at all possible. Perhaps retiring in Malaysia has now become a piped dream for many. 

More than anything else, retirement is about peace of mind, security and the confidence that plans laid are secure and safe instead of being tossed into upheaval with little regard for one’s plight or circumstance. Starting over takes time, and time is a scarcity…at whichever phase of one’s life.

 

Doubtful but hopeful,

Savvy Maverick