As a melting pot of cultures, Malaysia’s allure lies both in its bustling streets and in its stunning skylines. This Asian peninsula was once home to the tallest buildings in the world, the Petronas Twin Towers. While they no longer hold that record, they remain a monument to Malaysian forward thinking. Signs of Malaysian innovation don’t stop there. All you have to do is visit some of the country’s bigger cities to experience its contemporary way of life.
Andrew will tell you himself that Kuala Lumpur is one of his favorite Asian cities. As one of his bases around the world, Andrew spends a lot of his time in KL. With the MM2H visa, he benefits from the lifestyle that Malaysia offers him as a digital nomad. Not only did Andrew get his MM2H by himself, but he has helped other people to do so as well through the holistic planning services that Nomad Capitalist offers.
Whether you’re the outdoorsy type or more of a city slicker, Malaysia has something for expats of every kind. Beyond being a jewel of Southeast Asia, Malaysia has a reputation for being very tax-friendly. This makes it especially attractive to entrepreneurs and business people looking to keep more of the money they earn. With relatively relaxed tax laws, Malaysia is a great place for nomads looking to maintain their offshore income.
As the country continues to develop, it becomes an increasingly more attractive destination for expats. The Malaysian government has made it easy for foreigners to do business, invest, and live in their country. Fortunately for you, turning this Southeast Asian gem into your second home is a pretty straightforward process. There are three main ways to live in Malaysia. What you are searching for determines which method best fits your needs. These methods include:
- An easily-obtained travel visa
- The Labuan work permit
- And the Malaysia My Second Home (MM2H) visa program.
There are different advantages and disadvantages to each process. Nomads looking for a long-term residence should focus on the MM2H visa program. This article will give you an in-depth look at this particular visa. If you have a business plan in place, a work permit could be the way to go. And expats merely looking for a short breath of fresh air or who want to explore Malaysia as a potential future base can enjoy the country on a tourist visa.
The Malaysia My Second Home program is a great fit for expats frustrated by the large amounts of money expected from other second residence programs that often demand that you actively manage a local business. However, the program isn’t ideal for entrepreneurs who are just starting their careers. This visa program demands that you have funds (approximately $120,000 in liquid assets and $72,000 to invest) and time to spare while completing the process.
In this article, we’ll discuss:
- The Best Places to Live in Malaysia
- The Economic Benefits of Living in Malaysia
- The Malaysian Tourist Visa (Brief Overview)
- The Labuan Work Permit for Business Owners (Brief Overview)
- How to Get the MM2H Visa (The Ultimate Guide)
- Should You Get the MM2H Visa?
If you’re interested in visiting Asia, but not sure if Malaysia is for you, read our list of the 7 Cheapest Cities in Asia. While this Southeast Asian jewel is a hit with plenty of expats, there are other options out there, as well. If you’re interested in learning more about investing in Asia, be sure to check out Andrew’s guide on emerging market investment strategies in Asia.
The Best Places to Live in Malaysia
If you’ve yet to visit Malaysia, there are three main cities you’ll want to visit: Kuala Lumpur, George Town, and Langkawi. They are easily the best places to live in Malaysia.
The capital, Kuala Lumpur, is both modern and traditional. From the centuries-old Chinese Thean Hou Temple, you can still catch a glimpse of modern KL skyscrapers.
This mix of tradition and innovation is something that sets Malaysia apart from its neighboring countries. An exhilarating blend of cultures, nationalities, and religions give Malaysia – and Kuala Lumpur in particular – its unique energy. Westerners who are accustomed to this style of life will feel right at home on this Southeast Asian peninsula.
Filled to the brim with fantastic dining, shopping, architecture and monuments, Kuala Lumpur is a destination for nomads who love big cities. Not to mention, the cost of living is significantly less than similar capitals around the world. That means that this city is an ideal place to save and still enjoy yourself at the same time. It certainly ticks all the boxes for expats looking to go offshore.
Visitors to Malaysia also flock to the island of Penang. The picturesque capital of the island, George Town, was named a UNESCO World Heritage Site over ten years ago. Some of George Town’s charm comes from the fact that it hasn’t changed much since the colonial era. Strolling down the streets of George Town feels like traveling backward in time – though the city is not without its modern touches.
This Malaysian city is famous for its street food and unique dining experiences. It is also home to one of the world’s largest reclining Buddhas. In recent years, George Town has become known for its impressive street art. Still, it is the pristine, tropical beaches and beautiful natural sites like Penang Hill that capture the hearts of those who visit.
Malaysia’s archipelago of ninety-nine islands, also known as Langkawi, draws travelers from near and far. From its rolling hills to its lush jungles to its beautiful blue beaches, Langkawi often gets called heaven on earth.
Located just 18 miles off the coast of mainland Malaysia, only two of the islands in this archipelago actually have residents. The island of Langkawi has a population of approximately 65,000 people which means you won’t have to worry about any rush hour traffic.
In terms of prices, the fact that these islands are duty-free certainly makes them a haven for shopping. Island hopping and adventure sports are just some of the outdoor entertainment these islands offer.
The Economic Benefits of Living in Malaysia
Malaysia isn’t just a beautiful country to live in, it also grants significant economic benefits. Those economic benefits range from its open economy to its rather relaxed property ownership laws.
The benefits that Malaysia provides make it a great alternative to Singapore, even while its proximity to Singapore provides certain advantages. Singapore boasts the second freest economy in the world, and probably the most accessible economy for Westerners in terms of investment.
However, while Singapore has a reputation for being the ideal place to go offshore, it demands a significant amount of cash. If you have a million dollars to burn, you might be keen to invest in some real estate from the Lion city. Nonetheless, most other foreign investors can expect to hit a wall when buying real estate in Singapore.
The restrictions on foreign real estate investment in Singapore detract from the country’s economic grandeur. Annual property taxes coupled with stamp taxes mean that expats investing in Singapore can expect less bang for their buck. Foreigners must also pay a rental income tax of 20%, which puts them at a great disadvantage compared to Singaporean residents looking to invest.
Malaysia, on the other hand, has fewer ownership restrictions. Your investment is likely to go much further there. As long as the property is worth at least one million Malaysian ringgit ($240,000), it’s fair game for foreigners. However, in areas like Selangor or Johor, the threshold can be closer to about 2 million MR ($480,240).
Getting a Malaysian Tourist Visa
Before you decide to get a Malaysian residence permit, you should first visit the country on a tourist visa to decide whether or not you want to live there.
Malaysia has a long list of countries that can travel there with visa-free entry. Individuals from these countries can get an automatic 90-day visa to enter and enjoy the country. Some of these countries include the US, Canada, and most countries in the European Union.
Some countries only get a 30-day visa-free stay, including Ukraine, Mexico, and the Seychelles. Most of the countries in this category are from Europe (but outside of the EU), South America, Africa, and Asia.
Finally, there’s a third tier of visa-free countries that only get a 15-day visa. This tier is only made up of two countries: Iran and Libya. The limited visa-free travel, in this case, is due to political sanctions from the US which caused embassies to start rejecting visas from these countries.
Citizens from countries that do not have visa-free travel must apply for a visa. To find out if your country needs a visa, see this list.
Probably the most significant advantage of the tourist visa is how painless it is to use. There are numerous countries for which there is no paperwork involved. Nationals who do need to fill out paperwork have a streamlined procedure available to them online. When entering Malaysia, simply show your passport, get a stamp, and you’re in.
Tourist Visa Requirements
If you come from a visa-exempt country, then the visa requirements are minimal. All you need is a passport that is valid for at least the next six months following your date of entry. Visitors using the Travel Visa must be able to show that they have a return ticket or a ticket to another country – often known as proof of onward travel – since immigration officials want to confirm that you won’t be overstaying your welcome.
For travelers that do not come from a visa exempt country, such as Israel or Afghanistan, the process to get a visa is still relatively simple. You can get a Tourist e-Visa online that has a validity period of 90 days and allows for multiple entries and exits. However, once you are in Malaysia on this visa you have a maximum stay of 30 days per entry. The visa cost and service fees add up to about $100. Luckily, this visa process is quite quick and your visa will often be processed within 24 hours.
In a nutshell, getting the Tourist Visa for Malaysia is easy, regardless of whether you are exempt or not.
It is a great way to see the country, and if you’re trying to follow Andrew’s strategy of having multiple home bases as a nomad, you could easily come here for three months a year before going off to your other bases.
However, many of our six and seven figure entrepreneur clients have been telling Andrew how much they love the level of productivity they’re able to achieve by staying in one place. While travel visas are easy to get and excellent for short trips to Malaysia to get to know the country, they won’t make sense for people looking for a more permanent solution. Expats looking to live in Malaysia full-time should explore other venues for Malaysian residency.
Malaysian Labuan Work Permit
Obtaining a work permit for Malaysia can be a good option for entrepreneurs or businesses with a decent amount of capital.
While you might have a difficult time starting a company elsewhere in Malaysia, the federal territory of Labuan offers work permits geared towards professionals looking to start their business in the country.
This is an easy way to help fast-track your business into the Malaysian market.
This work permit is good for two years and can be renewed for another two to three year period.
Laubuan’s work permit comes with other perks as well. It allows 100% ownership of the business by a foreigner and gives the right to hire a few foreign employees without extra costs. The permit also has the benefit of giving business owners the opportunity to grant a yearly multiple entry visa for family members.
Overall, Labuan is a company jurisdiction that competes with Hong Kong and other offshore jurisdictions while providing you a place where you will pay a very nominal amount of tax. But, the added bonus is that Labuan is a part of a real country with tax treaties.
If you do not want to set up a business in Malaysia but still want to spend a significant amount of time in the country each year, the better option would be to invest in the Malaysia My Second Home visa…
How to Get a Malaysia My Second Home (MM2H) Visa
If you want to live in Malaysia long-term without the onerous requirements of the Labuan visa, you can apply for the Malaysia My Second Home program. The MM2H visa has basic financial requirements of liquid assets, a minimum offshore income, and a passive investment.
Occasionally, there are rumors that this program is going to go away. For instance, a couple of months ago, an article from Andrew’s friend Christian at IMI Daily discussed how the program had been suspended. However, we got in touch with him and determined that the rumor didn’t hold any water.
The program is still in effect. In fact, Andrew currently holds an MM2H residence permit.
As with most things in the world of second residencies, though, the targets are always moving. The program may change in the future, so we’ll do our best to keep this ultimate guide up to date with the latest information.
What has also long been rumored, and Andrew believes is long overdue, is that they’re actually going to increase the cost of the program. But more on program costs in a minute.
Often referred to as MM2H, this program is similar to many retirement visa programs, but it is not restricted to retirees. This program can help all expats with the necessary means to acquire a residence permit in Malaysia for up to 10 years at a time.
Naturally, before applying, you should check your passport expiration date since your passport validity plays a role in determining how long your residence permit will be valid.
Additionally, while the MM2H is a great program, it not equal to a Permanent Residence permit and it will not lead to permanent residence, either. The MM2H visa is a Social Visit visa that allows for multiple entries and exits. This program allows you to live in Malaysia and bring your family along with you, as long as you can provide the right paperwork and financial standings.
Compared to the two other Malaysian visas, the MM2H has more perks. One of the more significant upsides is the financial benefits Malaysia provides to new businesses or individuals looking to retire within its borders. Income tax is low and the local business laws are very straightforward. This visa program can open doors for entrepreneurs and business people who are hoping to increase their financial gains by going offshore. As it is quite close to both Singapore and Hong Kong, Malaysia is also a great location for business travel.
Similar to the Labuan work permit, the MM2H visa program can help you bring your immediate family into the country. Parents or in-laws can also receive a yearly Malaysian visa. You can sponsor your worker maid and import your vehicle into the country and even beloved pets can make their way to Malaysia with you on this visa. In essence, you can pick up and transport your life to Malaysia. It also helps that this program is more affordable than other second home residency programs.
Qualifying for the MM2H Visa
The MM2H visa is not restricted by age, gender, nationality, or religion. In the seventeen years that the program has been in existence, Malaysia has approved over 40,000 visas from 130 different countries. That may not seem like a lot when you consider that one million individuals have applied during this same time, but the approval rate has increased over the years.
Most applicants come from Asian countries, followed by European countries and then the Americas. By far, the country with the highest approval rate is China, with Japan and Bangladesh in a close tie for second.
While anyone can apply for the MM2H visa, meeting the financial threshold is crucial to determine if you qualify for the visa. Applicants under 50 must prove that they have a minimum of 500,000 MR ($120,000) in liquid assets and must make a fixed deposit or passive investment of 300,000 MR ($72,000). Applicants over 50 only need to prove that they have 350,000 MR ($84,000) in liquid assets and make a passive investment of 150,000 MR ($36,000).
In both cases, the money has to be placed in a Malaysian bank account. You’ll incur some fees while you make the transfer, but there are plenty of banks for you to choose from where you can get your own banker. Depositing this amount will give you a priority relationship.
When you make the deposit, you have to change that balance into Ringgit because, after all, that’s why they want you there. The funds cannot be touched for at least one year. After that, you can petition for the use of those funds for housing, medical, or child tuition reasons.
This visa also requires you to provide a source of income. Just as with the Labuan work permit, you should have a minimum monthly income of at least 10,000 MR ($2,400).
If you file as an employee, you must include certified copies of three months’ worth of pay slips. If you are retired, the monthly amount remains the same, but you can submit your pension slip as well as rental income and interests of dividends from investments. These should be supported by the latest six-month or one-year statement that mentions the invested amount or dividends received.
To prove your financial assets, you must submit copies of your last three bank statements. You can also send other relevant documents if they further prove that you can support your stay in Malaysia.
You will also need a medical checkup. As with many countries, the Malaysian government wants to be sure foreigners aren’t bringing any serious illnesses into the country. Just like submitting a passport photo and a letter of good conduct, this is a basic requirement of the process. You must also include a self-declaration of your health condition. If you are applying with a spouse or dependents, they’ll also need to submit this document. You can find this form on the MM2H visa website.
Along with these documents, you’ll need to submit an MM2H application form and a letter of application. If you are filing for dependents, you should include subsequent application forms for them as well. However, if you wish to add a spouse, they can be on your personal application form. You must also submit your resume for the immigration office to review.
On top of that, you need to include three copies of the IM.12 or Social Pass form. Everyone who is applying must also have a passport photo of themselves with a blue background. While the specific reason behind this color is not clear, it likely has to do with the Malaysian government tightening their security.
Furthermore, you have to submit a copy of your passport or your travel document and all pages with a stamp. If your passport has been renewed in the last twelve months, you must also submit a copy of your previous passport. A notary must certify the information page of your passport as a Certified True Copy.
In terms of background checks, you must submit a Letter of Good Conduct from your country of residence. Malaysia no longer accepts Malaysian Letters of Good Conduct. Any applications from Hong Kong or Singapore will no longer receive a supporting letter to obtain their Letter of Good Conduct. In the past, applicants from these countries were able to receive supporting letters to request their Letter Of Good Conduct, but that is no longer possible.
You can request a Letter of Good Conduct from the embassy of your country of residence. Keep in mind that this document is only required from the principal applicant.
A certified copy of your birth certificate should accompany your application as well. If you are applying with dependents, you’ll also need to include their birth certificates. Of course, that is only if they are under 21 years of age. Should a dependent be close to turning 21, they must submit their application six months before their birthday.
If you are applying with a dependent that has disabilities and is over 21, you need to submit their birth certificate, too. You’ll also have to provide a Letter of Confirmation from a medical practitioner to be eligible for this exception. As the principal applicant, you need to submit a statutory declaration that states that you agree to bear the financial requirements for all your dependents.
Once you have all that, you simply go and get a medical insurance policy and show them where you’re going to be living.
You can find a full list of required documents on the MM2H website.
Program Costs & Fees
As far as fees go, you will need to pay a security bond and a personal bond. The security bond is only 10 MR ($2.40) and works as a safety deposit for your application. Whereas, the personal bond is 2,000 MR ($480) and has to be paid for the visa to be issued. While these fees are nominal, you’ll have to ensure that they get paid for your application to go through.
Should you wish to enter the country while you are applying, you’ll need to get a Conditional Approval Letter. In this case, there are some added costs. This requires a one-time Personal Bond payment and you are also liable to pay 90MR ($21) every year for the Social Pass under the MM2H.
While the MM2H is more affordable, it still requires a considerable amount of cash. 500,000 Malaysian ringgit (about $120,000) aren’t exactly peanuts. That’s also just the liquid assets you have to prove. Your passive investment, fees, and bonds will add up to more than that.
Probably the biggest downside to this program is the fact that your passive investment has to be in Malaysian ringgit. Of course, it makes sense that the Malaysian government requires the funds to be in their denomination. However, from an investment point of view, you can expect depreciation. Just last year, there was a significant dip in the currency. On the other hand, compared to other Southeast Asian countries, Malaysia has a much lower inflation rate.
Malaysian MM2H Application Process
You should begin by registering on the Check N Track system, which provides you with all the appropriate forms and helps manage all the paperwork for you. After you have signed up, you’ll need to decide if you want to do the application process by yourself or with the help of a licensed agent. One benefit of having an agent is that they can double as your sponsor. All MM2H applicants must have a Malaysian national sponsor and the payment of your Personal Bond of 2,000 Malaysian ringgit ($480) must come from the sponsor.
There are plenty of agencies and packages available to assist you with the MM2H visa. Although they know their way around the Malaysian government and the visa application process, they are not lawyers. These agents are merely professionals approved by the Ministry of Tourism and Culture to help foreigners apply for the MM2H visa.
Different agents charge different fees. You can expect to pay about 8,000 MR – 10,000 MR ($1,900 – $2,4000) for an agent. If you are familiar with the process and the Malaysian government offices, you can skip the agent and apply directly online. The online application or eVisa process only became available recently.
Once you or your agent have gotten all of your documents together, it’s time to submit your application. After your application has been approved, you’ll receive a Condition Approval Letter, which can take up to four or five months to arrive. Your Conditional Approval Letter or digital eVAL will allow you to travel to Malaysia legally. You then have six months to follow up with any missing documents.
In 2018, the Immigration Department of Malaysia introduced electronic letters for approved MM2H applicants. They hoped to simplify the application process for foreign nationals. The eVAL (Electronic Visa Approval Letter) makes it easier for applicants to obtain their visas.
Furthermore, this online service has an application monitoring program, which allows applicants to receive notifications about missing documents. With rising application numbers, this online service was the government’s solution to help reduce and locally delegate some of the work.
Once you arrive in Malaysia, the first thing you ought to do is set up your fixed deposit account. Once you have done that, you need to submit a Fixed Deposit Certificate to the MM2H Center.
Aside from setting up your bank account and depositing your Malaysian ringgit, you’ll need to consider medical coverage. The Malaysian government requires that both you and your dependents have health insurance. You are allowed to purchase any coverage, as long as it is valid in Malaysia. After you have done that, you’ll need to submit the appropriate documentation to the MM2H Center.
You will need to have your medical examination done when you first arrive in the country as well, for both yourself and your dependents. This examination can happen at any registered clinic or private hospital in the country. The Medical Report that the practitioner provides to you must also be submitted to the MM2H Center.
In terms of education, dependents planning to attend a school in Malaysia will need a Student Pass. In order to get this pass, the dependent needs to complete a Student Personal Data Form. Both this form and the application for the pass have to be submitted to the MM2H Center
Getting Your Visa
When you have successfully submitted all the remaining documents, you can get your official MM2H visa at the Immigration Center. Remember that this visa is valid for a maximum of 10 years. You will now have a Social Pass and can enter and exit Malaysia as you wish. Extending this visa is simple if you have the appropriate documents and capital available.
Withdrawing from Your Fixed Deposit Account
After a year, if you decide to make a withdrawal from that bank account, some documents are necessary. First of all, the only approved reasons for withdrawal are the purchase of a house, medical insurance, or a child’s educational expenses. Second, there are limits to how much you can withdraw. MM2H visa holders under 50 must maintain 150,000 MR ($36,000) in their Fixed Deposit bank accounts. Those over 50 only have to maintain 50,000 MR ($12,000) in the account.
To legally make this withdrawal, you need the following documents:
- Your MM2H visa (copy)
- A Letter of Intention to Withdraw from your Fixed Deposit account
- The front page of your passport (copy)
- Your Fixed Deposit Certificate (copy)
- Your Conditional Approval Letter (copy)
You will also need to provide a copy of the proof of payment for your residential property purchase (i.e., the complete Sales & Purchase agreement and a receipt). If you are using the funds for tuition, then you’ll need a copy of the proof of payment for the child’s education in Malaysia. Should the funds be for medical care, you must submit a copy of the proof of payment for medical expenses.
Two years down the road, you will be able to make withdrawals for your vehicle. You’ll need the same documentation mentioned above and the purchase grant of your car. However, the minimum for your Fixed Deposit account remains the same – $36,000 for those under 50 and $12,000 for those over 50. That amount should remain for the rest of your stay on the visa.
Should I Consider an MM2H Visa?
Whether you are considering the MM2H visa because of the lifestyle benefits for you and your family or you are looking to start an offshore business with low income tax rates, Malaysia offers many benefits. Retiring in Malaysia is especially tempting as well, as offshore pensions are exempt from tax. The proximity to Singapore is another definite plus for up-and-coming entrepreneurs. Not to mention that with two international airlines based in Kuala Lumpur, you’re well poised to travel just about anywhere in the world.
Malaysia is an incredibly diverse and captivating country. Nomads looking to make it their second home won’t be disappointed by the lifestyle it offers. The Malaysian government has a history of innovating and looking towards the future. Malaysia’s capital already meets the standards of a developed country, and the government is committed to becoming a fully developed country by 2030. In Andrew’s opinion, you can already enjoy the same quality of life in Kuala Lumpur as in some countries in the EU.
However, before you head east, it’s vital to learn more about Malaysian culture – especially when it comes to business practices. Business norms can be very different in Asia than in the West, so you should be prepared for a bit of professional culture shock.
Additionally, while Malaysia is highly multicultural, it’s still a predominantly Muslim country, which means that Malaysian society is much more conservative than the US, Europe, and even some of its neighbors. While this conservatism is less pronounced in larger cities like Kuala Lumpur and George Town, you should take the time to understand how Malaysia’s Muslim roots influence its culture – especially when interacting with officials.
If you’re interested in visiting or even living in Malaysia, we have covered your your three main options in this article. You may only want to dip your toe in for now, or you might be looking at Malaysia as a potential base for your nomadic lifestyle. You might even want to develop a long term relationship here.
No matter what you’re looking for, there are quite a few benefits to consider Malaysia as a place to live.
Whether it’s on a work permit, a shorter term basis, or ten years through MM2H, Malaysia is worth the relatively nominal investment you have to make.
Overall, the MM2H program is straightforward and the visa is a great thing to have. Just remember, the MM2H is not equal to a permanent residence permit and can’t lead to one either. It’s a social visit visa that allows for multiple entries and exits.
Should you decide that a Malaysian second residence is for you, then Nomad Capitalist is a great source of information on the subject. Through our holistic planning services we’ve helped people get an MM2H visa for themselves and their family. While the process is straightforward in theory, it can be frustrating at times. Hiring someone to help you with the application process may provide the guidance and peace of mind you need to make the transition smoothly.