Here are the updates on the latest MM2H.
Please send us an email (click here mm2h@alterdomus.com.my) if you have any questions but bear in mind that we have no details yet like
Can I use my existing property?
What is the time frame that I have to buy a property in Malaysa?
When can I start the application?
What are the fees? The RM40,000 being floated is the ceiling price.
Many other questions that needs to be answered
Alter Domus has no problems with re-licensing. We will submit our re-licensing documents as soon as it is open for re-licensing.
We will send another email when we have the details. In the meantime, please bear with us.
The content of this blog is meant for you only. Please do not share this on Facebook, forums, or the internet. However, you can forward this link https://www.alterdomus.com.my/mm2h-blogs to your friends who are interested in staying in Malaysia.
For those who are already on the MM2H, your requirements are grandfathered, and you don’t have to worry about renewals. We have done hundreds of renewals for our clients, and they are all using the same set of conditions that they have used during their initial application.
The new requirements for MM2H are listed here: https://www.alterdomus.com.my/new-mm2h-requirements
**************
This will be a long blog where I will explain the new MM2H. If you do not like to read, please skip to the last section. It took me a lot of work, especially mental effort and critical thinking, to come up with the following: Yes, it is all speculation and conjecture, but they are all very sensible and plausible. This newsletter is objective, and it is not meant to offend anyone. The government may U-turn or I will be wrong on many things, but perhaps there is still hope that there is some intelligent life on the third rock from the sun.
Revisions may be forthcoming, but I doubt so. At first glance, the requirements seem onerous. Tearing them apart, there seems to be some extremely long-range thinking involved. Please bear with me as I must present some back stories first.
It is unthinkable for anyone to deny that collectively, the West is experiencing an accelerated moral decay and has been wallowing in political morass for the last decade. No country is an exception, although Malaysia seems to have less, and with the current administration, things are certainly brighter. Sanity is still prevalent here. Social order is in place, and it is peaceful, and calm here compared to many parts of the world, especially the developed West. The push for foreign citizens to leave their home country is very strong due to numerous issues in their home countries. The pull of Malaysia is always strong (nice weather, great people, low cost of living, etc). The first question that begs to be answered is: Is Malaysia ready for the deluge of refugees from these countries (China included)? The answer is no. No country in the world is ready for any influx of people coming in en masse in a short period of time. Cue the open borders of many developed countries. See what happens….
In the early days of MM2H, 2007 to be exact, the Ministry of Tourism informally told us that they were not going to promote MM2H. They want organic growth where it would spread by word of mouth. With this slow growth, the infrastructure and the people would be ready to take on more MM2H residents over a longer period of time. Well, now we have the hospitals, roads, airports, and more than sufficient residential properties to welcome the new residents of Malaysia. Phuket was a classic case study for unbridled boom. Movies such as The Man with the Golden Gun, The Beach, and many more that showcased the beauty of Phuket did more harm than good to Phuket. MM2H was not going to follow the same path.
Now, it seems that the entire Latin America is not really a great place to stay anymore, as their residents seem to be fleeing their own country. Sri Lanka, Thailand, and Indonesia have their own niche markets. Malaysia does not compete with them. Based on my knowledge and experience, only a small fraction of people is comfortable staying in Thailand and Malaysia. The large majority is "OR,” not "AND." One of Alter Domus’ staff read a post on Facebook. The person asked a question: “Why is it that there is a different feeling when you mix with expats in Thailand and Malaysia?”. A very snarky reply from one of the posters: The expats in Malaysia are of higher quality.
Perhaps Malaysia learned the lesson of COVID, where many MM2H holders bailed out of Malaysia because Malaysia did not treat them well. I fail to see this reasoning where the only countries that did well were the under-developed nations of Africa, where there were no unwarranted draconian government actions. Being objective, all developed nations treat their citizens even worse than Malaysia. Malaysian banks have to bear the brunt of converting Ringgit into foreign countries as these former MM2Hers leave. It was indeed painful for Malaysia for reasons that bear no logic. From the “frying pan” into the fire. Quotes are used because they think the frying pan is hot when it was not. It was all perceived.
Malaysians and foreigners alike love to condemn the Malaysian Ringgit as a lowly depreciating currency. They love to perpetuate the myth. The Malaysian Ringgit did not free fall like the Turkish Lira or the Argentinian Peso. People like to compare the Ringgit to the appreciating US and Singapore Dollar, Chinese Yuan, Thai Baht, and Hong Kong Dollar, but for reasons unknown, they don’t want to talk about the Ringgit appreciating against the Japanese Yen, Indian Rupee, and many other currencies. For the last two to three decades, the ringgit was range-bound (plus or minus 10%) against the Australian dollar and euro. Perhaps these people do not want to talk about it because it does not fit their favorite narrative or because their investments are only in USD or SGD. Nevertheless, these currencies appreciated because they were linked to the rising USD and not the depreciating ringgit. If a currency is bad, it goes down against all currencies, not just selected currencies. Malaysia has bountiful natural resources like land, air, water, crude oil, food, and a low population. These are all much more important for life, especially for those who are retired or those who want a peaceful life.
Malaysia does not have a financialized economy, which means less speculation and a higher quality of life. Properties are not overly expensive and the cost of living is reasonable. Excessive material wealth is never a major contributor to a higher quality of life. Inflation in Malaysia is lower than in other developed countries. Prices don’t double. There is no “hot money” flowing into Malaysia because Malaysia is deemed backwards and a Muslim country. This is a good thing because one of the causes of the 1997 Asia Financial Crisis was hot USD flowing out in a very short period in some SEA countries. Ringgit is not valid outside of Malaysia; thus, there is no profitable way to for speculators.
With the back story in place, let us dive into the new MM2H. Do note that if the requirements are easier, it will be extremely beneficial to Alter Domus. Will it be better for all the stakeholders and Malaysia as a whole? I have my doubts. Alter Domus will do well, but not extremely well with these requirements. Those who cannot afford or do not want to invest that kind of money can apply for S-MM2H.
My wife and business partner, Roselind provided the basis, and I agree with her. It seems that the Malaysian government is looking for serious long-term MM2H residents who are committed to staying here rather than bailing out anytime they want, regardless of the reasons. The new MM2H is geared towards people who are making Malaysia their primary home. There are three (3) clauses inside the new MM2H that are written down in black and white:
Transfer of principal. If the main applicant passes away, the next of kin can take over his or her place. It can be your spouse, unmarried children <34 years old, or even your parents.
Foreign income remitted into Malaysia is not taxed.
It is renewable, and the list of documents for the renewals is also listed below: the latest passports, medical checkup reports, and medical insurance.
With the above, it is reassuring that you can stay here in Malaysia even if the main applicant passes away and the renewal process is spelt out clearly. Isn’t it?
If the applicant intends to stay here long-term, the upfront commitment of buying a property will be beneficial for the applicant. I have met people who have stayed here for 10 years, renting at RM4,000 a month. If the person is financially strong, it makes sense to buy a property rather than rent one. Rumours are flying around that this decision of mandatory property purchase benefits the developers. I think this is being perpetuated without any critical thinking. Post-COVID, there are only a handful of new projects in Penang (or even no new projects at all). I believe a large majority of property purchases are from the secondary market (i.e., second-hand). So, how is it possible that the developers will benefit from this new requirement? Even if they start now, it takes years to get approval and the construction to complete, and they may not even be in the place that foreigners want to buy.
Personally, I, Toh Ghee or TG, believed that the government wanted only those who were committed to staying in Malaysia, not speculators. That is why they put in the clause that you cannot sell for 10 years, and there is a 90-day minimum stay requirement. For those who plan to buy a property and make Malaysia their only home, these are non-issues. In the past, there were MM2H applicants who applied for the program, put in RM300,000, never stayed for a single day, and cancelled the visa ten years later. They withdrew RM400,000 (with compounded interest). Malaysia paid them interest for nothing. They never spent a single sen in Malaysia other than coming here to get and then cancel the visa.
The fixed deposits are currently quoted in USD and not Ringgit Malaysia. It puzzled me for a few days, and I got enlightened (somehow, but I don’t know how). Maybe they will change to Ringgit perhaps but maybe not. However, I felt that if they had very long-term goals, then it make sense.
Putting in USD tells potential applicants that their money is in the strong USD rather than the weak MYR. Perhaps a false sense of security.
The money does not enter Malaysia and thus causes no increased inflation. Imagine if Alter Domus helped 1000 applicants in 3 months. That means RM500 million will be pumped into the economy in 3 months. The inflation rate in Malaysia is lower than in many other countries. By the way, the debt to GDP for Malaysia is only around 66%. https://www.imf.org/external/datamapper/CG_DEBT_GDP@GDD/CHN/FRA/DEU/ITA/JPN/GBR/USA (click on VALUE on the right side to sort by descending order).
This MM2H inflow does not distort the currency exchange rate.
If this money flows out, it does not impact the Malaysian Ringgit and Malaysia in general.
Malaysia will have a low profile. It does not attract unwanted attention from countries that will not be happy when their citizens leave their country without paying any taxes there. It is kept in USD and not Ringgit.
Moving forward, the new MM2H will attract those whom you don’t mind as neighbours. They are of a certain level of financial strength and will be staying in Malaysia long term. They will be part of the community here.
Peering into my crystal ball which I am not sure of its clarity - Properties in Penang may be an uptick as the slack will be taken up. However, the rental market will decline since foreigners are going to buy and stay. Technically, landlords can only rent out to those who have long term visas. Those who are going to rent are either (1) those who are on the old MM2H, (2) new MM2H who had properties elsewhere like in KL or JB and chooses to stay in Penang (3) Expatriate who are working in Penang. KL and JB have different property dynamics and I cannot foresee what will happen there are the land area is very large and they can afford to build more.
I would think that within a year, these new conditions would normalize and accepted just like 2006/2007 when the requirements for those less than 50 years old were raised from RM100,000 to RM300,000.
The demographic and profile of those who are on the new MM2H will be different, for better or for worse, I think it is for the better.
**************
Here are your options :
If you cannot meet the new MM2H financial requirement but still want to stay in Malaysia then S-MM2H is your own option. Please write to us. We can help you with S-MM2H. We have a sister company there. Going straight to a Sarawak company directly on your own make sense if you know the company is reputable but we have done this for decades and have the resources and experience to help clients. Furthermore, if you plan to stay in Penang, we are here to assist you. So, it makes a lot of difference if you can get help from somebody nearby, who is highly rated and are already in business for 20 years.
If you have the financial means to meet the new MM2H requirements
1. If you have decided to stay very long term in Malaysia and Malaysia is your PRIMARY residence – The New MM2H
2. If you are resistant to the idea and that it will cost you a lot, then please read https://www.alterdomus.com.my/post/will-the-future-mm2h-be-more-difficult
My clients and future clients find this blog useful in understanding the bigger picture. Please read: https://www.alterdomus.com.my/post/will-the-future-mm2h-be-more-difficult
Lately there are missing emails. If you did not get an expected response, please send a WhatsApp text to TG at +6012-4937270