Economy 101: MM2H Programme – The Good, Bad & the Ugly

The Malaysia My Second Home (MM2H) programme, introduced in 2002 by the Malaysian government, is a unique initiative that offers numerous benefits to both the country and its foreign residents. Image source: Possessed Photography on Unsplash

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What is MM2H?

Malaysia My Second Home (MM2H) is a programme that allows foreigners to live and work in Malaysia for a certain period. It was launched in 2002 as an initiative to promote Malaysia as a preferred destination for retirement, investment, and business. Since then, more than 40,000 people from over 120 countries have participated in the programme, enjoying the benefits of Malaysia’s multicultural society, tropical climate, natural beauty, and modern infrastructure.

However, the programme was suspended in 2020 due to the Covid-19 pandemic and underwent several changes in 2021 and 2023. The latest revision of the programme was announced on December 15, 2023, by the Tourism, Arts, and Culture Minister Datuk Seri Tiong King Sing. The new version of MM2H aims to simplify the application procedures, introduce more flexibility and clarity, and attract a wider pool of applicants.

One key change is that the applicants can now apply for permanent residency (PR) after five years of staying in Malaysia under the MM2H programme, instead of 10 years as before. This is a significant benefit for those who wish to settle down in Malaysia permanently and enjoy some of the rights and privileges of a citizen, such as owning property and accessing public services but not voting. Image source: ChannelNewsAsia

The new MM2H programme is divided into three categories: Platinum, Gold, and Silver, each with its own set of requirements, visa lengths, and benefits. The applications are processed exclusively through licensed MM2H agents authorised by the Tourism, Arts, and Culture Ministry under the Tourism Industry Act 1992.

Platinum Category & Requirements

• Fixed deposit of RM5 million (US$1.05 million)
• Withdraw up to 50% of the deposit after one year for property purchase (RM1.5 million and above), healthcare, and tourism
• Reside in Malaysia for at least 60 days per year
• Eligible for Permanent Resident (PR) status
• Visa valid for 10 years
• Can bring spouse, children (below 21 years old), parents (above 60 years old), and one domestic helper

Gold Category & Requirements

• Fixed deposit of RM2 million (US$420,800)
• Withdraw up to 50% of the deposit after one year for property purchase (RM1 million and above), healthcare, and tourism
• Reside in Malaysia for at least 30 days per year
• Visa valid for 10 years
• Can bring spouse, children (below 21 years old), parents (above 60 years old), and one domestic helper

Silver Category & Requirements

• Fixed deposit of RM500,000 (US$105,200)
• Withdraw up to 50% of the deposit after one year for property purchase (RM500,000 and above), healthcare, and tourism
• Reside in Malaysia for at least 14 days per year
• Visa valid for five years
• Can bring spouse, children (below 21 years old), parents (above 60 years old), and one domestic helper

It offers an opportunity for foreigners to experience Malaysia’s rich culture, heritage, and lifestyle. The programme is open to people aged 30 years and above from any country.

Sources – Immigration Malaysia, MSN & Expat Go

Updated MM2H In News

Not surprisingly the objective of the MM2H program was raised by a PAS politician who quickly labelled the program as a potential dumping ground for undeserving foreigners who looking for an easy way to get Malaysian citizenship.

An opposition MP has questioned the easy path to permanent resident status for those who obtain MM2H long-term residence passes, and a lower age eligibility of MM2H applicants.

Mas Ermieyati Samsudin, a former deputy tourism minister criticised the lax application and approval process which she said could lead to a “dumping of foreigners”.

If the government intended to attract more younger investors, it was better to introduce a new programme under the investment, trade and industry ministry or to improve the Premium Visa Programme.

She also took issue with the easier path towards permanent resident status for MM2H applicants who obtain a Platinum pass, which requires a fixed deposit of RM5 million, among other conditions.

She said the relaxation of the MM2H requirements and the financial conditions would see a surge in foreigners entering the country.

(Source: Free Malaysia Today)

The world is one big village where there has been movement of mankind from one continent to another as far as human history can record. Even the current pot Malaysia is made up of people from China, Australia, India and the Nusantara regions which makes us distinct but unique. Image source: Medium

Such allegations however have been quickly dismissed as the MM2H platinum level does impose a more stringent condition for a foreigner to be eligible for permanent residency in Malaysia.

An economist and the consultants’ association involved have played down concerns that the relaxation of requirements for the Malaysia My Second Home (MM2H) programme will lead to a “dumping” of foreigners in the country.

MM2H Consultants Association president Anthony Liew said the RM5 million deposit required for the platinum category application for permanent residency ensured that not everyone would get in.

“Not many people have RM5 million in cash to put into Malaysia. Other countries’ PR conditions require that they (foreigners) put in US$1 million to US$5 million, or buy properties to be eligible for PR or citizenship.

Meanwhile, Bait Al-Amanah founding director Abdul Razak Ahmad said relaxing the MM2H programme did not mean that any foreigner could freely enter the country.

He pointed out that the programme’s more relaxed criteria in the past did not result in any notable influx of unskilled applicants to Malaysia.

“Moving to another country is a significant undertaking, and even with relaxed MM2H requirements, it remains substantially costly for many foreigners.

(Source: Free Malaysia Today)

It is not the first time we have seen PAS politicians looking at initiatives by the Government in a limited view as Malaysia’s MM2H program is not the only program out there to provide long-term visas and other benefits that can only be enjoyed by permanent residents and citizens of a country.

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This expatriate from the US is now residing & working in Malaysia after his retirement and he admitted that the overall living expenses in Malaysia are much lower than the living expenses in the US. In the MM2H program, some questions remain unanswered which leaves expatriates like him uncertain about their future living & working in Malaysia. 

Benefits for Malaysia

One needs to remember that long-term visa programs such as the MM2H programme are not exclusive to Malaysia as there are several benefits to the host country thus many countries have similar programs. The MM2H programme is expected to boost Malaysia’s economy by increasing foreign investment, consumption, and tourism. Some of the benefits expected are as follows:-

• Economic Boost – The programme has attracted a substantial number of affluent expatriates who invest in local businesses, purchase properties, and contribute to Malaysia’s economy. Their investments stimulate various sectors, including real estate, hospitality, and retail.
• Tourism Promotion – The presence of foreign residents who participate in the MM2H programme helps promote Malaysia as a desirable tourist destination. Their positive experiences and word-of-mouth recommendations encourage others to explore the country, leading to increased tourism revenue.
• Job Creation – Expatriates who settle in Malaysia through the MM2H programme often hire local staff, thus creating employment opportunities for Malaysians. This not only reduces unemployment rates but also enhances the local workforce’s exposure to diverse cultures and global perspectives.
• Cultural Exchange – The MM2H programme fosters cultural exchange and understanding between Malaysians and expatriates. This interaction promotes tolerance, diversity, and social cohesion, enriching the fabric of Malaysian society.
• Education and Healthcare – Many MM2H participants choose Malaysia for its high-quality education and healthcare systems. Their enrollment in local educational institutions and utilization of healthcare services contribute to the growth and development of these sectors.

According to the Ministry of Tourism, Arts and Culture, the MM2H program has generated more than RM18 billion (approximately USD 4.2 billion) in direct and indirect investments as of 2020.

The direct investments include the fixed deposits that participants are required to place in local banks, ranging from RM150,000 to RM300,000 (approximately USD 35,000 to USD 70,000) depending on their age group. The indirect investments include the spending on property purchases, education fees, medical expenses, and living costs by the participants and their dependents.

The MM2H program also benefits the local economy by creating employment opportunities and enhancing cultural diversity.

The participants are allowed to bring along their spouses, children under 21 years old, parents above 60 years old, and domestic helpers. They are also permitted to work part-time or run businesses in certain sectors, subject to approval from the relevant authorities.

It is hilarious to note that there are unskilled, poor foreigners who have stayed in the country for many years by illegal means & bribes and without the need for the financial requirements under the MM2H program. You can see how bad it has been considering a recent raid in small areas netted more than 500 illegal immigrants. Image source: NST

Challenges and Shortcomings

While the MM2H programme has proven to be successful, it does face some challenges and shortcomings when compared to similar programmes in other countries:

• Stringent Financial Requirements – The MM2H programme requires applicants to meet certain financial criteria, such as maintaining a fixed deposit in a Malaysian bank account. These requirements may deter potential applicants who do not have substantial financial resources.
• Lengthy Processing Time – The application process for the MM2H programme can be time-consuming, often taking several months to complete. This extended processing time may discourage some individuals who are seeking a more expeditious relocation process.
• Restricted Employment Opportunities – Unlike some other countries’ similar programmes, the MM2H visa does not grant automatic work rights to its participants. Expatriates who wish to work or start a business in Malaysia must navigate a separate work permit application process, which can be complex and time-consuming.
• Competitive Global Market – As more countries introduce their own attractive residency programmes, Malaysia faces competition in attracting expatriates. To remain competitive, Malaysia needs to continuously review and enhance the MM2H programme’s offerings and benefits.
• Language Barrier – While English is widely spoken in Malaysia, the language barrier can still present challenges for some expatriates who are not fluent in English or Malay. This can affect their integration into the local community and their overall experience in Malaysia.

Generally, the challenges to attracting foreigners especially wealthy retirees who want to spend their last years are more due to external challenges posed by other countries’ long-term visa programs compared to internal challenges which continue to be improved.

Other Countries MM2H

However, the MM2H programme is not the only option for expats who want to live in Asia. Other countries offer similar programmes with different requirements and benefits.

Some of its biggest competitors in Malaysia are Thailand, Indonesia, Cambodia, and the Philippines. These countries have visa programmes that cater to retirees, investors, entrepreneurs, or digital nomads who want to enjoy the culture, nature, and economy of Asia.

Thailand

• The Investment and Business Visa (Non-Immigrant Visa Category “IB”) requires an investment of at least $300,000 in Thai businesses or bonds. Applicant can renew this visa annually and apply for permanent residency after 3 years.
• Thailand Elite Residence Visa. A Tourism Authority of Thailand subsidiary runs this program that has various packages. Applicant pays a one-time fee from $16,000 (5-year visa) to $64,000 (20-year visa). Applicant also enjoys benefits like airport services, health check-ups, golf memberships, spa treatments, and discounts. Applicant can apply for permanent residency after 5 years in Thailand with this visa.

Note: Both visas allow the holders to bring their spouses and children under 20 years old. However, neither visa grants the right to work in Thailand without a separate work permit.

Singapore

• EntrePass Scheme: This scheme is for foreign entrepreneurs who have innovative ideas and credible plans to start and run a new business in Singapore. The applicants should have relevant skills or experience, funding from a reputable investor or a strong business network or track record, and a registered company with at least SGD 50,000 capital and at least 30% ownership. The EntrePass is valid for 1 year and can be renewed up to 3 times based on the business performance. The holders can apply for permanent residency after 2 years of having the EntrePass.
• Global Investor Programme (GIP): This programme is for foreign investors who want to invest at least S$2,500,000 (about $1,800,000) in a business or fund based in Singapore. They must have a good business track record and provide their company’s financial statements for 3 years. The GIP grants permanent residency for 5 years and can be renewed if they fulfil some criteria such as creating jobs and living in Singapore. They can apply for citizenship after 2 years of being permanent residents.

Philippines

• Work Visa: a type of visa for foreigners who have a work contract with a Filipino company. This visa allows the applicant to stay in the Philippines for up to 3 years, depending on the contract length. The applicant also needs a Work Permit from the Department of Labor and Employment (DOLE) in the Philippines.
• Retirement Visa: This type of visa allows foreigners who have the required financial resources to retire in the Philippines. Before applying for this visa, applicants must enrol in the Philippine Retirement Authority (PRA) program.
• Special Resident Retiree Visa (SRRV): This visa is for anyone who is 35 years or older and can deposit US$20,000 in a Philippine bank or invest in a PRA-approved project.
• Retired AFP Officer’s Visa: This visa is for former members of the AFP who have a monthly pension of at least US$1,000. One can stay indefinitely in the Philippines and avail of some exemptions and discounts with this visa.
• Expanded SRRV: This visa is for anyone who is 50 years or older and has a monthly pension of at least US$800 (single) or US$1,000 (married) or can deposit US$10,000 (single) or US$15,000 (married) in a Philippine bank. One can also enjoy multiple entry privileges and various benefits with this visa.

Cambodia

The Cambodian government launched the Cambodia My 2nd Home (CM2H) program in July 2022 to attract foreign investors and retirees to live in the Kingdom of Cambodia. The program offers a 10-year renewable visa, also known as the Golden Visa, and a pathway to obtain Cambodian citizenship and passport after five years of residence.

The requirements are:

• Must be a citizen of a country or region recognized by the Cambodian government.
• Must be 18 years or older.
• Must make an investment of at least $100,000 in an approved real estate project in Cambodia. Applicants can choose from various options such as condominiums, villas, hotels, resorts, or commercial properties.
• Must pay the application fee of $1,000 and the visa fee of $1,500 per person. The visa fee includes health insurance coverage for one year.
• Must undergo a medical check-up and a background check to prove that applicants are in good health and have no criminal record.
• The visa will allow the applicant to stay in Cambodia for up to 10 years without any restrictions on entry or exit.

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One of the reasons why Malaysia attracts many foreign retirees is its language proficiency. Most Malaysians can communicate well in English, which makes it easier for expats to adapt. Another reason is its affordability. Malaysia offers a low cost of living compared to other ASEAN countries. Singapore may have a higher standard of living, but it is also very expensive. Thailand may be cheaper, but not everyone can speak English there.

Final Say

The Malaysia My Second Home (MM2H) programme has undoubtedly been a boon for both Malaysian and foreign residents seeking a second home. It has contributed to Malaysia’s economy, promoted tourism, created job opportunities, and facilitated cultural exchange.

However, challenges such as stringent financial requirements, lengthy processing times, and restricted employment opportunities need to be addressed to maintain the programme’s competitiveness in the global market. By continuously improving the MM2H programme and addressing its shortcomings, Malaysia can further enhance its appeal as a second home for expatriates.

In conclusion, the MM2H programme is a valuable initiative that benefits both Malaysia and its foreign residents. It offers a range of advantages such as economic growth, tourism promotion, job creation, and cultural diversity. However, it also faces some challenges that need to be overcome to ensure its sustainability and attractiveness.

These include easing the financial criteria, speeding up the application process, and expanding the employment options for MM2H participants. By doing so, Malaysia can strengthen its position as a preferred destination for expatriates seeking a second home.