New MM2H rules driving clients to Thailand, say agents
THE government is sending the wrong signal to foreign nationals looking to make Malaysia their second home by imposing new regulations targeted at multi-millionaires, Malaysia My Second Home (MM2H) agents and participants said.
The agents told The Malaysian Insight since the announcement of the new requirements, interest in the programme has dried up and, to date, they have not received a single application.
Malaysia’s neighbour to the north, Thailand, is now capitalising on this and introducing a slew of measures to woo wealthy foreigners to the country.
They said the biggest loser now will be Malaysia. From 2002 to 2018, the MM2H programme generated RM40.6 billion for the country.
Under the new requirements, MM2H applicants must have a minimum of RM1 million in a Malaysian fixed deposit (FD) account, and an increase from RM150,000 for applicants above 50 years old and RM300,000 for those 50 years old and below.
Applicants must also have an offshore income of at least RM40,000 a month, compared with RM10,000 previously.
They must also show proof of an additional RM1.5 million in liquid assets and spend at least 90 days a year in Malaysia.
Kamal Abd Ghafur Korusamy, the owner or AG Infinity Malaysia (MM2H) Sdn Bhd said the new requirements will not encourage foreigners to come here, instead it will drive them away.
“Many of my clients are disappointed and have decided to leave. I’m currently in the middle of helping a client who is originally from Switzerland sell all his properties in Malaysia and move to Thailand,” Kamal said.
Those who decided to settle in Malaysia were mostly middle-income earners in their home county and not wealthy enough to afford the new requirements, he said.
Kamal said MM2H residents have contributed a lot in buying property overhangs, which are not affordable to most Malaysians.
“Singaporeans purchased property in Danga Bay and Forest City in Johor. They are the only ones who can afford it, our locals won’t buy,” Kamal, who has an office in Johor, said.
Since many of those who enquired about the programme have pulled out, Kamal said he is contemplating closing down this business and moving on to something else.
“We have been doing so much marketing to promote MM2H, then suddenly they make the new requirements and we don’t have a business. There is no point in keeping this going.”
No new applicants
Since the announcement of the new requirements were made, MM2H consultants said they have not received a single application as most applicants are now looking at other countries.
Gideon Yap, the owner and managing director of Alliance (MM2H) Sdn Bhd said he used to get around 10 to 20 enquiries a month on average, but not now.
“They said with RM1 million they can get citizenship in other countries. With that amount of money, they prefer to move to Canada, United States or Portugal. Turkey is an option too.
“If they invest in a US$250,000 (RM1.05 million) property there, within three months they are given full citizenship. With MM2H, all you get is a social visit visa, which is no different from being a tourist,” he said.
This, Yap said, meant MM2H pass holders have to lug their passports around wherever they go in the event they are stopped by the police.
Yap has around 1,000 clients who are mostly from China, South Korea, Japan and Bangladesh.
“Under this new requirement no one has signed up yet. I think this year I might only get five clients when before I used to get 10 clients every month.”
Thailand is now capitalising on Malaysia’s blunder and has introduced new measures including long-term residency visas for four categories of foreigners who are rich global citizens, wealthy retirees, professionals working in Thailand and high-skilled workers.
The country is looking to attract 1 million wealthy foreigners within five years, generating about 1 trillion baht of spending (RM125 billion), 800 billion baht of investments and 270 billion baht in income tax.
MM2H participants don’t feel welcome
Long time MM2H participants are disappointed with the government’s decision to impose new regulations that render them unable to continue to stay in the country due to the high cost.
Those who came here with the expectation of living out their retirement said they feel unwelcome and are facing the prospect of having to pack up and move elsewhere.
Nicolas, 63, originally from France, came as a MM2H pass holder in 2009. He had fallen in love with Malaysia during his frequent trips to the country starting in 1994 for his job as an architect and urban planner.
“I used to travel here four or five times a year, starting in 1994. My children really like the country so in 2009 we moved here under the MM2H programme,” he told The Malaysian Insight.
“Both my children went to the French international school here. We love the weather, the food and the people are nice.
Nicolas, who lives in Mont Kiara, Kuala Lumpur, said the government’s decision shows that foreigners like him are no longer welcome in the country.
It was also not fair that the government reneged on their initial MM2H agreement, he said.
“We signed a contract with the government, which promised us that it was good to retire here and it is not honouring the agreement.
“This is their country, if they don’t accept us, we will leave and we will take our money, our homes, cars, and stop employing our maids and drivers. This decision (by the government) is what you call shooting yourself in the foot.”
While he renewed his visa in 2019, Nicolas is unsure if it is valid for five or 10 years.
Even if the government decides to U-turn on its new MM2H policy, Nicolas has made the decision to leave the country nonetheless.
“I already have an option of moving to Portugal. I am a European citizen, it’s cheap there and I don’t need a visa or buy a property. I can rent an apartment and just live there.
“I’m sick and tired with the sword above our heads, if the government changes, we will be treated differently. You should not treat foreigners like this, we are just contributing to the economy, we are not involved in politics, we just live here,” he said.
Fatima Ferdaus from Bangladesh first came to Malaysia in 1983 on a work permit as she was working for the United Nations Food and Agriculture organisation based in Kuala Lumpur.
Upon her retirement in 2015, she applied for permanent residency, but it was declined. Following that, she was advised to apply for the MM2H programme and received her pass in 2017.
“I came to this country as a young lady and now I’m 68. I even got married in 2002 to my husband of 15 years who is from Iran,” she said.
Malaysia may not be the country in which she was born, but it is one in which she grew up, fell in love with and where her friends are, she said.
“I didn’t take a single sen from Malaysian coffers and I’m still contributing to the country by serving as a fishery expert, I know the ins and outs of the fishery sector. I’m bringing in foreign currency and whatever we make we spend here.”
All of Fatima and her husband’s investments are in Malaysia and if the government does not change its mind, she fears they will have to move out, even though they are not young.
“I took all my savings and we bought a place in Setiawangsa. Ten years ago, we took out EPF as an investment and bought a condo here.
“We are hopeful the government will reconsider. It’s an agreement between the pass holder and the government, and we hope they will honour it.”
Meanwhile, Gary Allen, a MM2H participant from the US, described the new requirements as something only millionaires and billionaires can afford.
“MM2H is for retirees not multi-millionaires. They should have come up with MM2H ‘elite’ for those they now want to attract,” he said.
Allen, who came here in 2002 to work at Lotus engineering on the Proton Gen 2 car, applied for MM2H in 2006.
He said the new stipulations are a slap on the face for people like him who cannot afford the sum required.
“People are looking for a better place to go to, when you raise the price, you are going to lose out,” he said, adding that while Malaysia wants to attract the super-rich, it does not have the infrastructure or social setting that will cater to that lifestyle.
THE MALAYSIAN INSIGHT