Malaysia My Second Home (MM2H)

Note: The MM2H program underwent a significant revamp in late 2023. The current set of rules will be on trial for one year throughout 2024. After this time the Malaysian government will assess whether to continue on with the same rules or make further changes.

The Malaysia My Second Home visa allows expats and retirees to live in Malaysia either on a part-time or full-time basis.

There are essentially two versions of the MM2H program, with a different set of eligibility criteria for West Malaysia and Sabah; and another set of criteria for Sarawak. Sabah and Sarawak are on the island of Borneo, but Sabah has chosen to follow the national rules (of West Malaysia). Sarawak on the other hand has decided to set a lower hurdle for eligibility.

For the purposes of this article, we will be referring to the national MM2H program that relates to West Malaysia and Sabah. Although we will also briefly cover the eligibility criteria for the Sarawak (S-MM2H) later in the article.

Why Malaysia is a great place for a second residency

Malaysia has its own personality. It’s Asia. But it was also a former British colony. And it has a large Indian and Chinese population. All of these factors make it quite an interesting place. And an easy place to live and run a business from.

Like much of Southeast Asia, there is a multitude of things to do and experience. It has the big and modern city of Kuala Lumpur. And it has the traditional villages. It has pristine beaches, remote rainforests, and all of the natural beauty that is so plentiful in this part of the world.

English is widely spoken in Malaysia. And though learning a foreign language is always a worthwhile experience, being able to speak to people and do business in English has its obvious advantages.

Kuala Lumpur can be seen as a bit of a mini-Singapore, but without the price tag. It’s modern, efficient and a world class location to do business in.

The cost of living is around $1,500 a month in KL and much less in the regions.

Strategically located in Southeast Asia and the main hub for airline carrier Air Asia, you can be in any number of major Asian cities within one or two hours. And this can be done for under $100.

You get bang for your buck here. A champagne lifestyle on a beer budget. And many entrepreneurs base themselves in KL to capitalize on this.

The new visa rules – what has changed?

The revamped Malaysia My Second Home visa has three tiers – Silver, Gold and Platinum.

In the current form, there will no longer be an income requirement. Previously applicants were required to demonstrate a monthly income of RM 40,000.

The liquid asset requirement of RM 1,500,000 is also gone.

The fixed deposit amount has changed depending on which tier of the program you are on. More on that below.

The minimum age has been reduced from 35 years old, to 30.

The scope of allowed dependents who can accompany the visa holder to Malaysia has been broadened. You can now bring your spouse, unmarried children up to age 34, parents who are over 60, and parents in law.

The minimum stay requirement has also changed. Previously you had to spend 90 days each year in Malaysia to keep the visa active. That has now been reduced to 60 days.

Perhaps the biggest change is the new pathway to permanent residency that will be offered to Platinum MM2H holders. PR is quite difficult to attain in most of Asia, so this a big deal.

Other basic features

When you are granted an MM2H visa, you receive a multiple entry social visit pass. It’s not permanent residency. But it does give you similar rights while the visa is active. That said, the new Platinum tier of the MM2H does offer a pathway towards permanent residency.

The residency permit lasts for between 5 years up to no limit, depending on the visa tier that you apply for. If you are on the Silver MM2H, the length of validity may depend on the time remaining on your passport. So you may want to consider renewing your passport before applying for the MM2H, so as to maximize the permit validity period.

MM2H visa holders can purchase property after being in Malaysia for one year.

You can register and own a company in Malaysia. However, a work visa is required to legally be involved in the day-to-day running of the company.

Applicants aged over 50 are eligible to work part time for up to 20 hours per week.

Eligibility criteria

The main eligibility for the MM2H is as follows:

  • Be at least 30 years of age
  • After approval, make a deposit into any Malaysian bank. The size of the fixed deposit depends on whether you are applying for the Silver, Gold or Platinum tier (more on that below) – you are eligible to receive interest on the deposit
  • One-off bond payment up to RM 5,000 depending on nationality
  • Ongoing annual fee of RM 500

You can bring family members with you. Dependents in addition to the main applicant require an additional fixed deposit of RM 50,000.

After one year you can withdraw up to 50% of your fixed deposit to cover expenses in relation to property, medical or travel in Malaysia.

For the MM2H visa to remain active you must be present in the country for a minimum of 60 days per year.

MM2H – Silver

  • Make a fixed deposit into a Malaysian bank of RM 500,000 (USD 105,000)
  • If you plan to withdraw 50% of your fixed deposit to purchase a property, the value of the property must be at least RM 750,000 (USD 157,000)
  • 5 year renewable multi entry visa

MM2H – Gold

  • Fixed deposit – RM 2,000,000 (USD 420,000)
  • If making a property purchase, the value of the property must be at least RM 750,000
  • 15 year renewable multi entry visa

MM2H – Platinum

  • Fixed deposit – RM 5,000,000 (USD 1,050,000)
  • If making a property purchase, the value of the property must be at least RM 1,500,000 (USD 315,000)
  • 15 year renewable multi entry visa with eligibility to apply for permanent residency

 

S-MM2H

 

How is the Sarawak S-MM2H visa different to the regular MM2H?

There is some variation in how different regions of Malaysia administer the MM2H.

Sarawak, which is in Malaysian Borneo, has loosened the eligibility criteria in comparison to the rest of the country.

Here are the main requirements for the S-MM2H:

  • Monthly income – RM 7,000 (10k for married couples)
  • Fixed deposit – RM 150,000 (300k for married couples)
  • 40% of deposit can be deducted after 2 years
  • Must be sponsored by local resident, however this can be a visa agent who is based in Sarawak

You must spend at least 30 days of the year in Sarawak.

There are people who have applied under the Sarawak S-MM2H program and are using that to live in West Malaysia once they have ticked off their 30 days in Sarawak each year. It is technically within the rules but time will tell how long this loophole will remain open.

Is there an option to convert to permanent residency or Malaysian citizenship?

The MM2H Platinum visa offers a direct pathway towards permanent residency. However, the lower level tiers should be viewed as a long, but limited term residency permit.

There is also no clear pathway towards citizenship.

Although, technically there is an option for foreign nationals to become a Malaysian citizen by naturalization if they have resided in the country for at least 10 years. But this is set up more to cater to foreign men who have married Malay women. However, if a foreign woman marries a Malay man, they may apply for naturalization after just 2 years.

Dual citizenship is illegal in Malaysia. So you can’t become a Malaysian citizen without renouncing citizenship in your home country.

Do foreigners have to pay tax in Malaysia?

MM2H visa holders aren’t taxed on income remitted from overseas. Although income earned in Malaysia is taxed.

On a broader level per the Malaysian Income Tax Act, residents of Malaysia don’t pay tax on foreign sourced income.

However this rule operates under an exemption (with conditions) that will expire in 2026.

After that, an individual still won’t be taxed on foreign sourced income provided they don’t bring that money into Malaysia.

This offers an opportunity for tax minimization. Your personal tax liability can be greatly reduced if you structure things in the right way.

The top marginal tax rate in Malaysia is currently 30% for income over RM 2 million.

International taxation is complex. Any information in this article is made on a general basis only and is not tax advice. If you need taxation advice specific to your situation, you can get that here.

Are there other visa options in Asia?

There are many other visa options available in Southeast Asia if the MM2H doesn’t quite give you what you need.

Malaysia also has a digital nomad visa which is popular with entrepreneurs and remote workers who are less established or are looking for shorter visa term.

Indonesia has a second home visa that is a good option for people who don’t quite meet the MM2H eligibility.

Thailand has the LTR visa which allows you to stay in the country for 10 years. And the Thai Elite visa is a good option if you have some spare cash but don’t qualify for the LTR visa.

The Philippines has an investment visa that allows indefinite residency if you make an investment in the local stock market. This is another good one for people who don’t qualify for the MM2H.

Cambodia is also introducing a second home visa which will have a pathway to citizenship.

Who is the MM2H visa good for?

The big kicker in the revamped MM2H is the pathway to permanent residency for those on the platinum tier. This will be very attractive to wealthier expats who would like to establish permanent residency in Southeast Asia.

It is good for people who are looking for residency in a relatively developed country, that is a former British colony with a strong English speaking population.  With Singapore close by, it is strategically placed to perform well in an up-and-coming region of the world.

You have to be willing to spend 2 months of each year in the country. So this is for people who want a genuine offshore base in Asia and who intend to spend time there – perhaps to build a business or just enjoy life in a multicultural Asian city.

If you would like help with the Malaysia My Second Home visa, or with any other matter, you can book a call.

Thanks for reading.