Malaysia My Second Home (MM2H)

Hi there
We were charged about AUS 1200 upfront for them to prepare all the paperwork and then when the visa is approved..we pay the same amount again.
Expensive but worth the piece of mind!

In the end we will pay a total of AUS$2400 which is approx 7000-7500MYR

Thanks!

Hey guys, what is the different between Residential Pass VS Permanent Resident VS MM2H? Any one could advice me on this matter? Thanks in advance

MM2H is a social visit pass, valid for 10 years but renewable on "grandfathered" terms. There is a requirement to show a certain level of liquid assets and income (this amount varies according to age i.e. under/over 50) and in some cases it is required to set up a fixed term deposit at a local bank (it's reducible and returnable ). It is not a work permit. The principle holder of MM2H can have legally recognised dependents included under their acceptance. It takes about 6 months to apply and be granted this type of visa.

There are a completely different set of criteria to be able to apply for Permanent Residency. They are more geared to being involved in the commercial or social daily life in Malaysia. There are several routes including investment and longer-term working here as a skilled professional, or as the spouse of a Malaysian citizen. It can take many years to be granted this type of immigration status.

Hi guys,

Just signed up to ask your advice on the MM2H. Currently I'm residing in Indonesia, but I'd like to get residency in a more tax favourable (and less anti foreign investment) country.

My preference would be Thailand, but they allow 0 work without a Thai company.
SG is just too expensive and I'll still be taxed quite a bit the first year.
Philippines you need to be over 35 to apply for their retirement visa
Taiwan is talking about a golden employment card, but so far no dice.

So the way I see it that leaves me with Malaysia in SEA.

Now I have a couple of questions regarding MM2H (I tried asking some agents but they definitely take their time with replying, besides it would be good to get info from non-sales people):
- I read it takes 6 months to get the visa, if I would apply for it on the 1st of January could I still get tax residency for 2018 in MY?
- Is the requirement still 350k in a fixed deposit or is it 500k now?
- I saw a lot of people stating that you can take 50% out after the 1st year, but on their website it states that that is only for buying a car/property or paying for medical bills? So if I don't want to do any of those I'll have to keep the full deposit in there? Not that I mind if there is a 3% tax free interest /pa, but the stability of the Ringgit is worrying a bit.
- Do you need a permanent address in MY to qualify for residency? Because I was thinking of doing 1 month in MY and then 1 month in another country. So just renting an apartment on Airbnb every time I come to KL.
-I have no salary, is paying out monthly dividend 3 months before hand enough to qualify or does there need to be a contract and income tax paid?

MM2H is not a residency visa its a social visit pass. You can come and go as you please. Unless you have income that is earned in Malaysia, you are not tax resident and no tax ID would be required. Offshore income is not taxed here, so you remain in the tax system where you are paid.

There are two different MM2H programmes. One is for people aged under 50 yrs and the other 50 yrs upwards. You have to show an income of a certain level and liquid assets. The income required is RM10k per month for both (but for the over 50s there is another option "Open a fixed deposit account of RM150,000.00".

The liquid assets are RM500k for the under 50s and RM350k for the over 50s. The fixed deposit for the  under 50s is RM300k and the over 50s is RM150k.

This shows the requirements (use lefthand panel for full disclosure):
http://mm2h.gov.my/index.php/en/home/pr … conditions

The withdrawal of the FD is only possible for the expenses mentioned and only after 1 yr. The FD is returnable when you leave the programme. (see above link under section "after approval")

Only one application is allowed, i.e. if you give up your MM2H you can't apply again. It can take up to 6 months to get the process completed especially if the paperwork is not submitted correctly.

Thanks for your quick reply Gravitas.

Ok I was under the impression that the MM2H program could make you a tax resident in MY? If not I don't really see what makes the program any good.

Company tax is paid in the country where the business is incorporated, but dividend tax/withholding tax has to be paid in the country where the person receiving it is considered a resident.

If I would reside in MY more than half of they year, surely that would be considered my place of residence?

Its called Malaysia My 2nd Home for a reason I think you will find. You would need to make enquiries in your own tax regime. Another German is looking at incorporating a Labuan company for similar purposes. The key word on tax residency is that the income has to be "earned" in Malaysia (i.e. not offshore).

Ok I definitely wouldn't be a tax resident in Germany any more (and haven't been for a while).

I've had a talk about setting up a Labuan company as well, but with the requirements (and the time it takes to become a tax-resident) I'd rather just go for SG.

Are you 100% sure foreigners on the MM2H visa can't be tax residents in MY? I mean I know US citizens can't be, but the MM2H program has often been praised as a cheap "residency visa" e.g. this site:
http://nomadcapitalist.com/2013/11/11/e … a-program/

For Labuan companies you become tax resident immediately upon incorporation and issuing of the Director's work permit. Unfortunately nowadays you need a paid up capital of RM250k to get the visa. Check this out with a legally competent company such as simplyoffshore. They have a website and it's run by a Malaysian lawyer.

The issue is how would you get a tax number in Malaysia if you don't have any income that originates in the country? Offshore income is not taxed so no need for a tax number and a tax declaration. It's the "at source" taxation system. A Labuan company channels that income through the Malaysian tax system.

Gravitas wrote:

For Labuan companies you become tax resident immediately upon incorporation and issuing of the Director's work permit. Unfortunately nowadays you need a paid up capital of RM250k to get the visa. Check this out with a legally competent company such as simplyoffshore. They have a website and it's run by a Malaysian lawyer.

Thanks I will look into it again, but my preference is just a residence permit. I'm not really keen on another company structure.

The issue is how would you get a tax number in Malaysia if you don't have any income that originates in the country? Offshore income is not taxed so no need for a tax number and a tax declaration. It's the "at source" taxation system. A Labuan company channels that income through the Malaysian tax system.

Most countries want you to report assets at the end of the year, even when they are not taxed.

I report all my assets on and offshore in ID. And in my home country I still have a house which I have to report as well even though I don't live there.

I know there are people who are of the opinion that if you are no (tax) resident anywhere you don't have to pay taxes, but I'd like to leave a paper trail in case I ever get in a dispute with a country's tax man.

Or are you trying to say, you can receive dividends from an offshore company while spending the majority of your time in MY, but there is no need to report it?

Yes, to your last question. Because it's offshore income which implies you are tax resident elsewhere. If it were dividends from a Malaysian company then you would need to report because it's income derived from within Malaysia.

If you want more clarification check with a  Malaysian Tax Accountant. Otherwise ask your taxation questions to the tax authority - http://www.hasil.gov.my/index.php

I looked back at your initial question and you talked about wanting to work. The MM2H social visit pass is not a work permit, so not able to apply for jobs on that visa.

There are rules about income derived from online sources but I think it depends on where the website is registered.

You can be an investor in Malaysian registered businesses and franchises whilst on the MM2H visa. Income from that would be classified as derived in Malaysia. There are some restrictions on what types of business foreigners can be involved in.

Thanks again for your answers Gravitas.

Gravitas wrote:

Yes, to your last question. Because it's offshore income which implies you are tax resident elsewhere. If it were dividends from a Malaysian company then you would need to report because it's income derived from within Malaysia.

Offshore income doesn't imply tax residence elsewhere. I mean a Malaysian with offshore income (company and or stocks) won't all of a sudden lose his obligation to pay tax to the MY government (for the rest of his income). I think we also need to differentiate between corporate and personal tax.

E.g. for my Singaporean Company I pay 17% corporate tax
There is no withholding tax in Singapore
Yet if I would pay myself dividend when residing in Germany I'd still have to pay 25% since it is a personal tax.

I looked back at your initial question and you talked about wanting to work. The MM2H social visit pass is not a work permit, so not able to apply for jobs on that visa.

I don't want to do any work within MY, but I do want to continue with my offshore company remotely. I was under the impression that this was allowed under MM2H.

There are rules about income derived from online sources but I think it depends on where the website is registered.

We don't own websites. Our clients are mostly in the US and SG.

The context of this thread is MM2H - that's what we are discussing and what your original question was about - tax residency. Of course you can continue with your corporate interests and be on MM2H. You just can't use the Malaysian tax system to your advantage to offset any offshore taxes when you are on MM2H. You are on a social visit pass and not a residency pass. The immigration systems are very different in Singapore and Malaysia. The latter does not readily hand out PR's - only in certain circumstances. Even when on work permits here the person does not have any cumulative right to remain once it expires.

Thanks again Gravitas. Still confusing for me, but I'm not planning to move until next year anyways.

For example this agent clearly states we can be tax residents on MM2H:
http://migratemalaysia.com/income-tax-f … ticipants/

But you are right let's keep this discussion out of this thread, thanks for your help.

You have misunderstood what is written there - it says:

1. All funds remitted to Malaysia will be tax-free

2. Any income EARNED IN MALAYSIA will be subject to tax
Then it explains the types of incomes EARNED IN MALAYSIA with a list.

3. Next it talks about items A-D and explains the rates of tax depend on residency i.e. flat rate of 28% or the graduated rate. They are INCOMES EARNED IN MALAYSIA

4. Then it details how to work out tax residency - BUT AGAIN ITS TALKING ABOUT INCOME EARNED IN MALAYSIA.

why?

Because it has already said (see 1. above) All funds remitted to Malaysia will be tax-free i.e. they were earned in another country. Your Directorship dividends are EARNED IN SINGAPORE not Malaysia i.e. the company that pays them is not incorporated under Malaysian law.

I'm an Expat MM2H holder since 2010. I have established Tax Residency in Malaysia every year and I have Tax Residency Certificates from HASIL for each year.
I receive a Pension from my home country in Europe. I pay no tax on it. My home Tax man has been given my tax status in Malaysia, and since my country has a Dual Tax Agreement with Malaysia I cannot be taxed in both jurisdictions.

My home Tax man just wants to see that I am assessed for tax someplace (or he will tax me back home). The MM2H Visa wording is crucial. You are NOT defined as 'exempt of tax', that could create a liability back home. The wording says you ARE assessed for Tax, and the applied RATE is ZERO.

I have numerous friends from my home country and other european states all doing this for years with no problem. No tax on Pensions.
If you have a DTA you'll have no issue.

@senior123

Thanks a lot, that is exactly what I want to do, already spoke with an accountant in MY who says it's not a problem. They would even apply for me, I just have to make sure that I keep records of my 182+ days here (flights and what not, just in case).

Even better news for you - if you establish Tax Residency in Malaysia 4 years in a row you can drop the 182 Days requirement down to 90 Days. I use this all the time now. HASIL know about and accept this. Under certain circumstances you can even reduce your days to ZERO and still comply.
Get a good accountant who is familiar with Malaysian Expat Taxation.

Hello there,

I'm Liyana. May I have the permission and support from you to help me with my research about Malaysia My Second Home (MM2H) by answering my questionnaire below. All information will be use for my final year academic study.

Thank you in advance.

Regards,
Liyana

Hello everybody.
please,do you know any reliable MM2H agent that you guys recommend .
I do appreciate if any comment or advice.
Thank you

farhadalien wrote:

Hello everybody.
please,do you know any reliable MM2H agent that you guys recommend .
I do appreciate if any comment or advice.
Thank you

Hi Farhadalien, you can pm me.

Alter Domus - first ever registered agent and 100% reliable and efficient.

Thank you for your recommendation.
can you tell me how much was the total fee and how long does it take to get the visa,do you think i should stay in Malaysia for three month or more?
Thanks

farhadalien wrote:

Thank you for your recommendation.
can you tell me how much was the total fee and how long does it take to get the visa,do you think i should stay in Malaysia for three month or more?
Thanks

The application take around 6 months nowadays.
Please don't overstay. You can wait in your home country while waiting the approval.

The Agents fee for the principle applicant will be around RM7k and then about RM500 per additional person.

I did my own application - it's not difficult. The applicants have to go to the immigration Office in Putrajaya anyway.

thank you.

is there any difficulties that might pop out in the processing of documents without agent involvement that you know of ? is it really matter for Visa office in putrojaya who is handling the paper works ? do you think if i do it personally it might have less chance of success ?
Thanks

The success rate depends on whether you can show you qualify - not who does it. In fact the role of the agent is to advise how to present the best case and to check the paperwork so that it is correct and no delays are caused through omissions. They can tell you what action you need to take and discuss your situation fully. Alter Domus is about the most experienced agent you can get and their pricing is nowhere near as expensive as some companies.

It is the financial proof that is the most important and has to be clear and well documented.  There are no "nearly qualifying" situations - it has to be shown that you do have the required liquid assets and income*.

The qualifications were recently discussed in Parliament and everyone is expecting them to be increased soon (once again). The decisions are made at a committee that reviews applications each month and announces the outcome. It can take up to 6 months for clearance if the application has been done properly.

*The MM2H is more flexible for the 50s and over, as many retired/pensioners don't have government pensions (they may be private or corporate ones) or they are not of sufficiently high monthly value. Some are still working too and have an income. So placing a fixed deposit instead of fully qualifying with the monthly income of RM10k is the other option given.

thank you much.

Actually the cost you spend to travel to Malaysia do the application by your own is more expensive than you hire an agent.
- At least 2 times flight come and return to your home country.
- At least a week hotel stay to run here and there.
- Travelling from KL city to MM2H centre at Putrajaya cost. Around 40KM from city center.
- Travelling cost of looking for different department to certify documents.
 
You save a lot of time and energy to hire an agent.
Only 1 trip to Malaysia once your MM2H is approved.

@patrick
I guess it depends on where you live as well. For me a return flight to MY is $100.

I will definitely use an agent though, sounds like a headache to do it by myself. The cheapest I found so far was Joy, but she doesn't reply .

Most of them are in the 8k-10k range.

There was a public holiday in Malaysia yesterday (Monday)

floaton wrote:

@patrick
I guess it depends on where you live as well. For me a return flight to MY is $100.

I will definitely use an agent though, sounds like a headache to do it by myself. The cheapest I found so far was Joy, but she doesn't reply .

Most of them are in the 8k-10k range.

Ya, depends on where you located also. For your case, your flight is cheap.
Probably if you come to KL to apply MM2H,
you wouldn't wanted to just stay hotel at Putrajaya. It is expensive and boring there.

Why don't find Mayflower, is one of the largest Travel Agency in Malaysia do provide MM2H application as well. Price range is around 8k as well.

You should negotiate the fee the agent is quoting you. It's true that 8 - 10k is normally quoted, sometimes 12k too. But I think 6k tops is reasonable.

@senior123
Dear, applying for the COR certificate of residence  you have to stay more than182 days . In the form STM1 you have to show a "List of movements in/ out Malysia. My question concerning Your experience: how does HASlL handle the proof of your stay you have to show on the form sheet STM1?
You present a list of movements in and out of Malaysia. Do you need any record or document in addition?
Thank you for a reply

Another question Senior123 - isn't it necessary to have some form of income that originates in Malaysia in order to apply for the Double Taxation Agreement with another country?  If there is no income that is earned in Malaysia what would happen?