Malaysia eager to reel in Asia’s wealthy with tweaks to visa scheme

[KUALA LUMPUR] After interest in a long-term visa scheme for wealthy foreigners in Malaysia waned due to harsher rules, observers say the government’s plans to ease the criteria should bring in more applicants over the long run.

The Malaysia My Second Home (MM2H) programme, as it is called, will undergo a review this year, with officials hoping that more foreigners will relocate to the country and live there for an extended period of time.

In April, Malaysia’s Tourism, Arts and Culture Minister Tiong King Sing announced a review of the scheme after applications plunged by 90 per cent in 2021, adding that the goal was to make the programme more attractive by offering more “flexible” options.

Currently, those who are successful in their MM2H applications get a social visit pass and a multiple-entry visa from the Immigration Department, which is valid for 10 years and is renewable.

The programme allows applicants to bring along their parents, spouses and dependents, including children below 21 years old.

In August 2021, the government imposed stricter conditions for applicants, including the need to show RM1.5 million (S$445,688) in liquid assets and having a minimum monthly salary of RM40,000. Previously, they only needed savings of between RM300,000 and RM500,000.

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They must now also place a fixed deposit of RM1 million in a bank account in Malaysia and spend at least 90 days a year in the country. The annual visa fee also increased to RM500 (from RM90 previously), with a processing fee of RM5,000 for principal applicants and RM2,500 for each dependent.

Since the scheme’s inception in 2002 until 2019, nearly 49,000 people have been successful in their MM2H applications. The peak was in 2017 when more than 6,000 people were approved.

Over RM40 billion flowed into the economy through visa fees, fixed deposits, purchase of properties and private vehicles, as well as household spending, according to data from the MM2H Programme Agents Association.

An agent of the MM2H programme, who requested not to be named due to the sensitivity of the issue, said the “ridiculous tough criteria” imposed in 2021 forced many interested applicants to look to other countries instead for these golden visas.

Anthony Liew, the president of the MM2H Consultants Association, said there have been fewer than 100 applications since January this year.

“Malaysia’s diverse culture and languages are big advantages in attracting foreigners who are looking for a retirement destination, especially those from China, Hong Kong and South Korea,” he told The Business Times. “However, the current higher requirements for MM2H has put many people off, so a review (of the criteria) is definitely a good move.”

NK Tong, the president of Real Estate and Housing Developers’ Association Malaysia, echoed this view and he hopes the government will take a “pragmatic approach” to restore the scheme’s long-term appeal.

“There has been a damaging impact on the MM2H programme and Malaysia is losing out to its neighbours. There is also a negative perception among foreigners who are looking to invest in Malaysia,” he said.

He noted that the government’s intent to review the criteria, and to expedite the processing of applications via a one-stop centre, are steps in the right direction.

Geoffrey Williams, economics professor and dean of the Institute of Postgraduate Studies at the Malaysia University of Science and Technology, said: “To change the scheme, the minimum financial thresholds should revert to the old levels. The opportunities to work and invest should be improved, and pathways to permanent residency status should be put in place.”

Gary Crestejo, who currently holds a MM2H visa and is a consultant of the scheme, said it was in the government’s interest to attract more of these wealthy foreigners as there will be many positive spillover effects on the economy.

“The interested applicants will spend when they are living in Malaysia as they are used to a certain lifestyle, and they will want to maintain that,” he said.

“These foreigners are coming (to Malaysia) for their retirement. They need security and they don’t want surprises at their age. If they don’t have confidence, how much money will they be willing to bring with them?”