@Cobolin Yup, so glad I got my MM2H pre-Covid. Even though I didn't have to buy, I wanted to so I am in escrow now. I even managed to get a home loan from HSBC, when the other banks only gave half decent loan offers.
@Cobolin Yup, so glad I got my MM2H pre-Covid. Even though I didn't have to buy, I wanted to so I am in escrow now. I even managed to get a home loan from HSBC, when the other banks only gave half decent loan offers.
These new conditions rule us out, it will now cost at least £218000 to get a 5 year silver. We do not want to purchase a property as we are retiring and want flexibility and less stress. I know it's maybe cheaper for the Johor zone but that does not interest us. Will have to look at Sarawak, or even at Thailand. We would have no issues with the deposit in the bank. They need to do a retirement visa if they want to attract the retiring community.
What are current loan terms? Last time I looked, real estate loans had to be paid off by 54 or 55 years old.
I find myself in the same position. Let us know how you go.
Need to note that the minimum purchase price I've seen listed for foreign nationals in almost every state in W. Malaysia is RM1million, not RM600k. So you need RM1.7million to qualify. Not many people have that much cash on hand.
You can withdraw half of the RM707k after a year to purchase property, but to qualify for the program you've already bought an RM1million property.
[link under review]
I just found this online, I will cut/paste the important info since I'm not sure if the link will appear. Note the reduction is temporary and only applies to unsold already built properties. So, the minimum to get into MM2H under the Silver Level is currently RM1.3Million.
"The Ministry of Finance has announced that beginning next year, they will reduce the minimum price at which foreigners can buy property from RM1 million to RM600,000. It is believed that this reduction will be for one year, and will only apply to properties which have been built but remain unsold, though there hasn't been specific clarification on this point as of yet. Property prices in Malaysia are generally lower than those in more developed countries and a lot lower than neighbouring Singapore. It's worth understanding that many residential properties in Malaysia are built speculatively, with developers selling them “off the plan” – this helps keep prices relatively reasonable, but if people don't buy as expected, a large number of unsold properties can accumulate. Called “property overhang,” this is exactly what has happened in Malaysia. The government believes that by temporarily lowering the minimum purchase price, thus making more of these unsold properties available to foreign buyers, the property overhang may be reduced. "
Link if it shows up.
@DZINVEST
Thanks for that list, but isn't your foreign income taxable for most of those alternatives? Or in the case of Thailand and Indonesia, it is taxable and you aren't allowed to work?
For people that aren't retired yet there really aren't that many options.
Is the 90 day requirement for mm2h new and does this apply to the current mm2h holders as well? I haven't been back in malaysia for more than a year now, but was planning to stay there again next year, not sure if my mm2h is void now?
@floaton The 90 days only applies to new applicants. If you qualified for the old MM2H (pre 2021) you should be fine. And you will be able to renew under the same terms for another five years when your first ten years is up. I'm pretty sure that is correct, but contact your agent to be sure.
@iskandarhack When was this published, there's no date on it?
@Cobolin
I also can't find a date but has to be very recent since the now requirements was only announced last week.
@iskandarhack Hmmm, I seem to recall that a scheme very like this was announced four or five years ago.
@Cobolin
You might be right; the program has had so many changes over the years and so many attempts to bail out property developers that built more high-end house (esp condos) that the local market can absorb. It doesn't change the net result for many, if one needs RM1.3M or RM1.7M that's probably more than most people have on-hand in cash that they can afford to tie up for a minimum of 10 years. RM1.3M = USD276,000 and RM1.7M = USD360,000 - A LOT of cash.
I looked a little deeper in the MM2H website, their homepage is dated Dec 2023 and still lists the requirement for the FD which the most recent requirement is in USD.
@floaton The 90 days only applies to new applicants. If you qualified for the old MM2H (pre 2021) you should be fine. And you will be able to renew under the same terms for another five years when your first ten years is up. I'm pretty sure that is correct, but contact your agent to be sure.
-@Cobolin
Ah that is good to hear, I already renewed my mm2h for another 5 years 2 years ago so should be good for a while then.
Something else I read though is that since 2022 more FSI is taxed?
https://www.pwc.com/my/en/perspective/t … 1M8MzcClBQ
The article is a bit complicated, but I reckon most mm2h holders have one of these sources of income:
If I am reading it correctly this means that we have to pay tax over this income now? For most people not having to pay taxes would be one of the main reasons to choose MY over other countries (and their home country).
Any experience how this works out in practice? I havent lived in MY since 2021 and back then the concencus was still that I didn't need to pay anything.
@floaton Thank you for posting the pwc link. The link says "Qualifying FSI is exempt from tax provided the income has been subjected to tax in the country of origin".
So if you already paid tax in the country of origin of the qualifying Foreign-Sourced-Income, you do not need to pay Malaysia tax on it. But you still need to declare it in your Malaysia tax return. You have to file Malaysia tax return every year.
Also, if you do not remit the FSI to Malaysia, you do not need to pay tax on it.
The tricky part is remote work - which is not considered FSI and thus taxable in Malaysia. Say you are from the USA and you work remotely from Malaysia for a US-based company which deposits the renumeration to your US bank account and you do not remit it to Malaysia. Do you still need to pay Malaysia tax on this income? Likely yes. If you do remit to Malaysia, do you need to pay Malaysia tax on it when you probably already paid US tax for the income? Depends on whether there is tax treaty between the two countries. Unfortunately there is no tax treaty between the US and Malaysia. If there is a tax treaty, you can claim full credit for the tax you already paid to your country of origin. You only pay the balance, if any, to Malaysia. If your country of origin (or country of the company you work for) does not have tax treaty with Malaysia, you have to pay income tax to Malaysia. But I believe you can claim 50% credit for the tax you already paid to your country of origin. I think this is somewhere in the Malaysia tax laws.
The Malaysia authorities were pressured by the EU to tax FSI. Western countries want to reduce the incentive for their wealthy to live overseas to avoid or reduce tax.
@floaton There has been a lot of debate about this on various forums. The official rules are as PWC says - I've read the official LHDN (Malaysian Tax Office) guidelines and also there is a section on the 2022 and 2023 tax return forms to fill in this information about not-previously-taxed FSI.
But apparently one diligent member of our community went his local tax office and they said that there was no need to worry about tax until 2026 at the earliest unless you actually derive income from within Malaysia. So in theory, practice should follow theory, but in practice, it doesn't. YMMV.
Thanks @immersed and @cobolin!
Ok I will consult with an accountant before returning to Malaysia again.
@immersed, you said:
Also, if you do not remit the FSI to Malaysia, you do not need to pay tax on it.
How would that work, you pay yourself to an account in a different country and that's it, you still report it in Malaysia though? If that is the case, yeah no problem I only use my malaysian account for the MM2H deposit.
@floaton
This is the Malaysia tax law document pertaining to foreign income:
5.1.4 Foreign income received in Malaysia that has been taxed by other jurisdiction either through withholding tax or income tax, can claim bilateral or unilateral tax credit under the provisions of sections 132 and 133 of the ITA 1967.
5.1.9 Effective from 1 July 2022, foreign income received in Malaysia is subject to the prevailing tax rate.
Note the words "received in Malaysia".
[link under review]
Double Tax Relief on Foreign Tax Suffered
Where a Malaysia tax resident has suffered foreign tax on the FSI, the taxpayer is given bilateral or unilateral tax credit relief against the Malaysian tax payable on the same FSI. Bilateral relief is given under Section 132 of the ITA when the foreign country has a double tax agreement with Malaysia e.g. Singapore, Indonesia, Japan, China, Australia, South Africa, United Kingdom, France, etc.
On the other hand, unilateral relief is given under Section 133 of the ITA when there is no double tax agreement between Malaysia and the foreign country e.g. British Virgin Islands, Taiwan, United States of America, etc. While full relief may be possible under a double tax agreement, the final amount is calculated based on a prescribed formula and relief is only given up to the maximum of the Malaysian tax suffered. As for unilateral tax relief, the foreign tax recognized is automatically halved.
In addition, the Malaysian tax resident is required to substantiate the amount of tax paid in overseas with the relevant supporting documents from the tax authorities in the foreign countries in order to claim the said tax relief in his tax return.
If you are from Indonesia, good news. Looks like there is a tax treaty between Indonesia and Malaysia. You can claim full tax credit for the tax you already paid to your country of origin for non-qualifying FSI. If there's no tax treaty, "the foreign tax recognized is automatically halved".
You asked:
How would that work, you pay yourself to an account in a different country and that's it, you still report it in Malaysia though?
Not sure if you still need to report it to Malaysia. Maybe you can ask your accountant and let us know the answer here. Thank you.
Thanks a lot for that information @immersed! I am not from Indonesia but this information is very helpful nonetheless.
@floaton They think we are crazy to spend up to 1.5M MYR (300k €) to get 5 years visa !!! hhhhhh they can continue dreaming
About Tax, to be honest with you i prefer paying 20% of tax contributing to the dev of the country im living in than spending 300k € cash to have a 5 years visa
Note that From 2026 you will need to declare all your foreign income in Malaysia if you have MM2H or PR or RP
Thailand and Indonesia are much much much better in all aspects (i have lived in all SEA)
Stupid MY gov
@iskandarhack Iskandar my friend, you dont need to be a genius to understand the scam.
300.000 € for a 5 years visa !!! and with the fear that "sure" next year will change the ruls and maybe stop the program again. and guess what ! you can not invest or create value in the country (companies etc)
As i have said before, Malaysian gov can never be trusted they have added the purchase of a property to please and shutup the big sharks (developers) by what ? Our Hard earned money ... No thanks
I have been living in all SEA countries, i love Thailand, Indonesia and Malaysia but MM2H Scam its a big NO for me
Even if its not a scam i still say no. It doesnt make sense like the old days, nothing appealing about it.
@cvco Another BIG issue is the property purchase, this means that your Cash will go into an illiquide asset + Tax with all the issues that they are facing to sell / rent due to oversupply and you must keep it for 10 years as mentioned in their conditions WTF !!
Here's the new 2024 MM2H Program Guidelines in English.
https://www.motac.gov.my/images/4_SYARA … NGLISH.pdf
It has an relevant statement regarding taxes on pp.8.
"Tax exemption on incoming funds such as FD."
Of course -Real Property Tax Gains on a sale would not be incoming funds.
Phillipines 🇵🇭 realesed a new Program $75k get a PR + passport
* one payment - money gone
imidaily.com/sponsored-feature/philippines-launches-new-fast-track-permanent-residency-program-the-fiv/
Hopefully your link will be active soon. Curious what they're coming up with. The Philippines have had some of the most straight forward programs.
@iskandarhack Yes and the easiest in Asia
Iskandarhack,
Yes but the citizens have protested to govt for a long time, they dont want the foreigners.
@cvco
It's a balancing act to make the programs accessible and to attract participants that will help with the local economies and create jobs for locals. I find it interesting that Indonesia requires in one or more of their programs that you are required to hire a local in some fashion like a driver, maid or gardener.
@cvco They dont want Indian, Bengla, Nepali and Maynmar
The white with money is always welcome in all SEA
This is the reality
@DZINVEST
Might want to add Russians to that list of undesirables. Been reading about a lot of complaints from Thailand and Indonesia (especially Bali).
And 'rich' Chinese are particularly welcomed in Forest City, Johor. Unfortunately that project turned into a giant ghost town. Apparently now the cheapest category for MM2H is now available for people willing to buy a unit there. But it must be bought directly from the developer, not from any of the units on sale from investors trying to dump their units for half price just to get rid of them.
@iskandarhack Agree on the Rich Chinese.
I believe that the Malaysian government after Mahathir's departure has no direction, it is lost, it has lost its splendour, he was a visionary.
Investors, businessmen, and foreign capital were very optimistic with him (im one of them) although he was not perfect and nobody is perfect, but you could invest and live in Malaysia easily. but now everything has changed to the worst
In his mandate the MM2H program was stable, simple, and straightforward, was the best program in SEA with no competitor
Now they are changing it every time (for the worse) and the last amendment im feeling like they take us for stupids, $320.000 in which 50% of this money goes in an illiquid asset (property) in MYR and all this for a 5 year visa !!! Seriously !!
Now even Labuan offshore jurisdiction is not attractive anymore by introducing a bunch of no sense laws/conditions just to please the OCDE , see Dubai GOV when they got some pressure from the OCDE they just rise tax from 0 to 9% on Company Tax and they keep it simple so the money and investors keep flowing into the country.
They think people are throwing money out of the window.
Appears the video has been taken down. Too bad. Have to wonder why.
I am new to this but have been interested in the program for a while. We are anticipating retirement in 9-10 yrs, and Malaysia seems to be a good landing spot.
Questions:
Thks!