Malaysia My Second Home (MM2H): An expatriate's guide to living in Malaysia

In our previous article on Malaysia My Second Home Programme, we covered the general requirements and application process foreigners will have to go through. In this article, we will look at all you need to know about living in Malaysia as well as the perks MM2H applicants stand to benefit from.

1. Buying a House in Malaysia

During your stay in Malaysia, you can either rent or buy a property to make yourself feel at home. One clear advantage of the MM2H programme is that it provides cheaper property price tags to foreigners, where applicants are can secure a home from as low as RM300,000 in certain states.

*Zones in Selangor
Zone 1 – Districts of Petaling, Gombak, Hulu Langat, Sepang and Klang
Zone 2 – Districts of Kuala Selangor & Kuala Langat,
Zone 3 – Districts of Hulu Selangor and Sabak Bernam

NOTE: In the state of Selangor, foreign purchasers are prohibited from:
1. Purchasing landed residential properties unless said property is issued with a landed strata title (e.g. gated community). 
2. Buying auction properties
3. Purchasing agricultural land

You can choose to buy either a leasehold or freehold property – the former means you are leasing the property from the Government for 99 years which is renewable for a fee. Freehold, on the other hand, means you will own the property forever. The Government recommends that you buy a property which already has a Certificate of Fitness. However, if you desire to purchase your a new launch property from a developer, make sure it is a reputable company to avoid any discrepancy.

You must be wondering whether you are allowed to take a local home loan to finance your house. The answer is, Yes! You apply for loans from banks such as CIMB, Maybank and Public Bank. The loan tenure will depend on your the number of years left to the maximum age of 65 years or up to 30 years, whichever is lower. Make sure to apply for the State Authority’s approval to purchase a property before applying for the loan as it may take up to 3 months to secure.

You can expect a loan margin ranging from 60-80% depending on your borrowing profile with an average interest rate of 4.2-4.3%. The remaining amount must be paid by you from your personal wealth.

Lastly, if you decide to sell your house during your term of stay in Malaysia, you can enjoy the profit from your sale. However, your sale proceeds will be subjected to a 30% Real Property Gains Tax for the first 5 years and 10% from the 6^th year onwards.

FIND OUT MORE: Guidelines for foreigners buying a house in Malaysia

2. Car purchase

As an MM2H holder, you have the right to buy a car to commute in Malaysia. Petrol and car maintenance are relatively cheap in Malaysia. Moreover, securing a car loan is pretty straightforward – all you have to do is to fork up a maximum of 30% of the purchase price up front and the rest can be financed by a 10-15 years loan with an interest rate of around 3.5%.

Previously, you could import a car from your country of origin or buy a locally assembled car in Malaysia free of any taxes. Unfortunately, these options have been suspended from 1 January 2018 onwards. Now, you will be subjected to excise duty and sales tax for the purchases of new or second-hand cars.

As for a driver’s license, you can attend any driving school in Malaysia and sit for a driver’s exam to obtain a domestic driver’s license. This is applicable even if you had a driver’s license previously because foreigners are not allowed to convert their license unless they have diplomat pass or own a Singaporean driving license.

3. Credit Cards

You can apply for any number of credit cards as you wish considering that you have a good credit score and have an annual income of at least RM 30,000. Since your records are already showing a monthly off-shore income of RM 10,000 monthly and that you have a fixed deposit account for your MM2H program, you will not have any problem getting your application (s) accepted.

4. Part-time work 

If you are over 50 and looking for a way to fill in your day, the MM2H programme allows you to work a maximum of 20 hours per week. Foreigners with special skills are allowed to work part-time as a lecturer and such other positions. To know more on how to apply for this Work Permit, Click Here.

5. Business ventures

 MM2H holders are encouraged to set up and invest in businesses in Malaysia. Many MM2H agencies help the applicants to set up their business as part of their service by helping them to register their company license and run business operations.

You can own and run your business activities as the director of the company without having to employ any Malaysian national as a director. You can invest in Malaysia’s share market and unit trust to earn revenue too. You can even put your money into investment properties.

However, be warned that as a company’s investor, the Malaysian Government restricts MM2H holders to be actively involved in the daily activities of the business. It is only permissible if you are willing to change your visa status from MM2H to a Work Visa.

MORE: The Complete Guide to Gated & Guarded Communities in Malaysia

6. Education

Your children can get graduated from top class colleges and universities, both local and international. Malaysia boasts prestigious Public Universities such as the University of Malaya, University of Sains Malaysia. It is also home to a few local campuses of foreign universities such as Monash and Swinburne University.

7. Tax exemptions

As an MM2H holder, you will be a tax payable resident of Malaysia who has to report any income earned in Malaysia for tax purposes. However, any foreign income earned outside the country or interest gained from bank fixed deposits is tax exempted.

Edited by Reena Kaur Bhatt