The Malaysia My Second Home (MM2H) residency visa program has recently undergone significant changes, leading to a notable decrease in interest from potential foreign applicants. The revised criteria, especially the compulsory property purchase requirement, have sparked apprehension among prospective buyers and industry professionals.
New property purchase requirement to obtain the MM2H visa
The latest update to the MM2H visa scheme requires participants to buy property valued between RM 1 million ($210,000) and RM 2 million ($420,000) and hold it for at least ten years. This new rule is intended to attract wealthy individuals and stimulate the local property market. However, it has also caused a significant decrease in interest among potential applicants. Many see the long-term financial commitment as a deterrent, leading to a sharp decline in prospective participants.
Agencies that handle MM2H applications have reported a sharp decline in interest since the new property purchase requirement was introduced. According to Farisa Athirah, a senior executive at My Expat MM2H agency based in Kuala Lumpur, the number of interested applicants has dropped from over 500 to less than 50. Similarly, Anthony Liew, president of the MM2H Consultants Association, noted that the mandatory property purchase criterion has been a deal-breaker for many clients. Reports indicate that up to 90% of prospective MM2H applicants have lost interest due to the revised regulations.
Changes in requirements impact the Malaysian economy
The new rules have been criticized by economists and industry experts. They argue that the rules may be too restrictive to achieve their goals. Dr. Geoffrey Williams, founder and director of Williams Business Consultancy, pointed out that while the measures were designed to attract wealthy foreigners and stimulate the property market, they might instead be turning away expats without significantly boosting real estate demand. The revised visa scheme now mainly targets high-net-worth individuals, potentially limiting its broader economic impact.
The initial iteration of the MM2H scheme, which was launched in 2002, successfully attracted 48,471 foreign retirees and their dependents. They contributed an estimated RM 58 billion ($12.18 billion) to the local economy over 17 years. However, revisions to the program in 2021 resulted in an estimated RM 9 billion ($1.89 billion) loss from 2020 to 2023. The most recent changes, including the property purchase requirement, further endanger the scheme’s ability to attract a diverse range of foreign investors and retirees. The overall economic impact could be diminished if the program fails to regain its previous appeal.
Additional changes to MM2H
The MM2H scheme has been updated to include a new property purchase requirement. The fixed deposit requirement has also been adjusted to between $150,000 and $1 million. The residency requirement has been increased to a minimum of 90 cumulative days per year, up from the previous 60 days. Furthermore, eligibility for permanent resident status has been removed. These changes are intended to strengthen the program’s criteria and ensure that participants commit significantly to Malaysia. However, they also impose additional requirements on prospective applicants, potentially discouraging many from applying.
In conclusion, the updated MM2H visa scheme has introduced several new requirements to boost Malaysia’s property market and attract high-net-worth individuals. However, these changes have led to a significant decline in interest from prospective applicants and raised concerns about the scheme’s effectiveness. The new regulations present opportunities and challenges for foreign property buyers and owners, requiring careful consideration before making long-term commitments in Malaysia’s real estate market.
2 Responses
I was going to retire there and all I would do is spend money. And not take any from Malaysia. But to force me to buy at house at the age of 66 and keep till I am 76. And only get a 5 year visa. And put 105k dollars in the bank. No thanks
What the Malaysian market needs is quantity, not quality to fill the properties with renters. Retirees spend more on experiences which create diversified jobs. Who would trust the Malaysian government now? Old saying: if it ain’t broke don’t fix it!