Following nearly two years of suspension, Malaysia yesterday announced it would reopen its popular MM2H program in a reformed guise. The changes, however, come with unprecedentedly sharp increases in both financial and temporal requirements. That, program participants and agents alike say, reveals the Malaysian government’s true intentions: They simply don’t want the MM2H-crowd in the country anymore.
ExpatGo, an online platform for expats that’s also operated as an MM2H agent for many years, writes in an article on its website today that, whereas they had previously given the government the benefit of the doubt as it faced accusations of wanting to freeze out foreigners from Malaysia, the new rules presented yesterday made it difficult to reach any other conclusion:
Since early last year, the MM2H programme has taken a real battering and resulted in MM2H visa holders giving up the visa or becoming very upset with the treatment they received. On a number of occasions, the MM2H visa holders were the last residents of Malaysia allowed to return here and some are still locked out. Although we were very disappointed by their treatment during the pandemic, we did not believe the government wanted them out altogether. Some expats and MM2Hers did not share our view, nor our willingness to give the benefit of the doubt. Now it seems they were right and we were wrong.
The same publication listed a number of recent government decisions that point to a deliberate effort to make MM2H participants feel unwanted:
- Making it harder to renew but easier to cancel MM2H visas
The government did not allow MM2H-ers to renew their expired visas unless they entered Malaysia and did so in-country, which most were unable to do because of the very same government’s ban on entries under the cover of COVID. At the same time, it made it easier to cancel the visas; previously, MM2H holders needed to travel to the country to cancel their visas. That policy was done away with over the last year, enabling cancellations to be completed remotely. Many did just that.
- Introducing a 90-day requirement that will effectively exclude more than half of applicants
ExpatGo estimates that less than half of MM2H-holders live full-time in Malaysia and, rather, use it as a vacation home destination. Few working-age MM2Hers will be able to take a full three months off for holidays in Malaysia each year.
- Quadrupling the monthly income requirement to nearly US$10,000 a month
Of the many MM2H applicants ExpatGo have assisted over the years, they estimated fewer than 1 in 20 would be able to meet this requirement. Indeed, many participants are retirees who have moved to Malaysia precisely because they could have a higher standard of living on a lower income. The same paper also noted that the amount now required was double that of the average US monthly pension payment and that those who can meet this income requirement are unlikely to choose Malaysia as a retirement destination in the first place.
- Raising the fixed-deposit requirement by up to 567%
From the previous MYR150,000/300,000 requirement, the government has raised it to MYR 1 million (US$236,000). A large share of participants will not be able to afford this and those who do will be sure to question the merits of placing such an amount in an account denominated in a steadily devaluating currency: “For example, if you joined the MM2H program in 2010 and placed RM150,000 into an FD, it would have cost you US$46,000 at those exchange rates (about 1:3.22). Today, that account would be worth roughly US$36,000, a loss of almost 25% of your investment.” Applicants will henceforth also need to deposit nearly US$12,000 for each dependent.
- Raising the liquid assets requirement by up to 329%
Over and above the money needed to pay for fees and term deposits, applicants will need to demonstrate liquid assets worth at least MYR1.5 million (US$350,000). That’s up from the previous MYR350,000/MYR500,000.
- Introducing a minimum age of 35
If you are younger than 35 years old, you will no longer be able to apply for the MM2H at all.
- Cutting the visa’s validity period from 10 years to just five. Previous rules allowed for a ten-year visa. The Home Ministry offered no explanation for the halving.
- Making existing program participants subject to the new rules
According to ExpatGo, “the government plans to insist that all existing MM2H visa holders meet the new criteria, and we know for a fact that the overwhelming majority will not be able to meet them. They will therefore be forced to leave the country with the attendant negative impact on the economy.”
Perhaps the most salient piece of evidence pointing to deliberate government attempts to push out MM2Hers is that each program change implemented makes it more difficult to particpate. None of the changes make the program more attractive, neither for prospective nor current participants.
Speaking to The Star, MM2H holders and Penang residents Steve and Mary Hambley say the new requirements will force them to find alternatives for what they had anticipated would be their retirement home, and pointed out that most self-funded retirees would not have the income required under the new conditions.
Forced to leave
“We are quite disappointed. We chose Malaysia to be our forever home due to its affordability, lifestyle, and friendly people. We understand that the country is trying to rebuild its economy and, as such, see MM2H as a means but this could have the opposite effect. Many who are unable to meet these new requirements will be forced to leave and it can, unfortunately, take billions of ringgit out of the country,” said Steve.
“I feel incredibly sad for those expats who own their own homes here and will be unable to meet the new limits,” one MM2H visa holder told The Vibes. “Expats who own investment properties here to supplement their incomes will not be able to count that as income to meet the new financial requirements as the RM40,000 per month must be earned offshore. Realistically, if I had the financial means being newly sought here, I would consider a lot of other countries before Malaysia.”
A Canadian couple speaking to the same newspaper said they could not afford to keep a million ringgit that they had intended to live on during retirement locked up in a bank account.
“We’ve been full-time residents of Penang for 12 of the last 21 years,” said the Canadian couple, Gerry and Beth. “It is our home. We’ve helped and supported local businesses and done what we can to boost the economy during these trying times. This latest decision feels like a slap in the face and we urge the government to reconsider and reverse it.”
Another program participant, speaking on condition of anonymity, commented: “I hope the relevant authorities will take into account the plight of existing MM2H residents and make them subject to only the same financial conditions that they have initially signed up for during renewal.”
“On the income levels stated, we could live anywhere in the world”
An unnamed Australian MM2H-resident of Penang told The Vibes that, under the new terms, “we will not qualify and on the income levels stated we could live anywhere in the world. Unless the government changes their decision we will be forced to relocate to another country. The RM40,000 per month income is more than double what we would need to return and live a comfortable life in Australia.”
Tan Hong Wang, an MM2H agent, called the changes “bizarre” and said most agents thought of the changes as ridiculous.
“If you are comparing other neighboring countries that have this kind of program, we are on the losing end in the aspect of competitiveness,” he told The Vibes, hinting programs like Thailand’s Elite visa would be the beneficiary of the MM2H changes.
Pointing out that the changes in financial requirements were not merely incremental but actually represented a quadrupling compared to previously prevailing rates, Tan said “we need to really urge the government to amend it. They need to review and listen to the agents; we have first-hand information.”
Christian Henrik Nesheim is the founder and editor of Investment Migration Insider, the #1 magazine – online or offline – for residency and citizenship by investment. He is an internationally recognized expert, speaker, documentary producer, and writer on the subject of investment migration, whose work is cited in the Economist, Bloomberg, Fortune, Forbes, Newsweek, and Business Insider. Norwegian by birth, Christian has spent the last 16 years in the United States, China, Spain, and Portugal.