Malaysia has reopened its Malaysia My Second Home (MM2H) scheme, which aims to attract well-to-do foreigners and expat retirees, but with tough new eligibility requirements for income and assets.
Applications for the MM2H program, which has been suspended since July 2020, will be accepted from October "as part of a strategy under the National Economic Recovery to boost the economy" of the Covid-hit nation, said the Secretary-General of Malaysia's Home Ministry.
Under the new MM2H 2021 requirements, applicants must first of all prove they have liquid assets worth MYR1.5 million ($483,000) – a substantial hike from the previous range of MYR350,000-500,000, depending on the applicant's age.
In addition, successful MM2H applications will need to have an offshore income of at least than MYR40,000 ($12,880) per month – a four-fold increase over the previous MYR10,000 monthly income – and must reside in Malaysia for at least 90 days per year.
On top of that, MM2H participants must maintain a fixed deposit account in Malaysia with a balance of MYR1 million ($322,000) from which they can withdraw no more than half during their stay – with those withdrawals only permitted for real estate, health care and the educational fees of any children.
The Secretary-General said the new MM2H requirements for 2021 will also apply to extensions of existing visas issued under the scheme, although "a grace period of a year will be given so that participants can fulfil the new requirements."
However, the revised MM2H 2021 requirements have been criticised as being so stringent that the country risks losing applicants to competing expat retirement programmes in other Asian countries
"One of the factors that makes MM2H attractive to foreign retirees is the cost of living in Malaysia, which is much lower than other developed countries," argues International Real Estate Federation president Datuk Seri Koe Peng Kang.
"They can stretch their lifetime savings further by living here."
"The increase in the qualifying monthly income to MYR40,000 will exclude this huge group of applicants who aspire to have a better quality of living when they retire,” he told Malaysia's The Star.
He also believes the need to show MYR1.5 million in liquid assets will impact many foreigners whose businesses and reserves have been heavily impacted by the ongoing coronavirus pandemic.