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MM2H / Malaysian Retirement Questions

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  1. #11

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    Do have to look into tax issues. I have a feeling that post covid spending, a fair few govts will be tightening up their tax collections to pay for the spending. Let's see where this ends up - in no rush to make any decisions either way. If you hold US stocks or assets there are bigger concerns in my mind compared to Malaysian tax system.
    From what i have seen so far, nothing suggests that tax system will change or there was even any proposal for that.. Capital gain tax on selling property, rental income tax around 25% and obviously regular income tax if any source of of income in Malaysia, no tax on income from outside Malaysia.. Other than that what happens in future is all probably a speculation..

  2. #12

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    Apr 2018
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    Quote Originally Posted by Taikoowan:

    I sold an apartment in KL 3 years ago, the taxation was straight forward. If I remember correctly the tax was deducted from the sale price, i.e. the buyer's solicitor needs to settle the capital gains on sellers behalf before the balance of sale proceed is handed over to the seller.
    Yes that's true - but for non Malaysia citizen/PR the applicable tax on gain is 30% (dropping to 10% after 5 years). You could keep life simple and walk away from the 30%. Currently there is an exemption on gains, but that only applies to citizens.

    However if, for example, you bought a condo as a fairly raw "shell" and spent a tidy sum to bring it into a livable state, that is a legitimate offset against capital gains. For that you need to submit a tax return I believe. Your solicitor can do that for you, and that's when you potentially enter into the "tax return for life" category. At least technically, as it was explained to me during the process.

    Probably nowadays this isn't such an issue as I notice condos are being sold in a far more finished condition than in years past. They're also a lot smaller than they use to be. One nice thing was even in KL the condos were extremely spacious compared to HK, and those in Penang were positively palatial. The monthly fees were also very low, I think I paid under HKD400

    If there is a MM2H 2.0 I would still look very carefully at the rules regarding withdrawing your investment and global taxation, as both issues were the topic of some political debate, with MM2H holders viewed by some quarters as "taking advantage" of ordinary Malaysians, and getting too good a deal.

    Personally I don't have an axe to grind because one of the generous aspects of MM2H 1.0 was you could withdraw most of your "deposit" to buy a car or property and I took advantage of that. I'm probably just stating the obvious about doing due diligence here, but I bring it up as I know a few people with considerable sums locked up in Malaysian banks, yet are unable to return to Malaysia right now to access it, even tho they may have decided to leave the scheme due to COVID or other life events.

    I expect MM2H 2.0, if it does come, will cost more, and have stricter rules around health insurance for seniors. In other words they will up the ante a bit to attract these so called "well heeled" investors, but Malaysia is not alone in that, the whole world seems to drooling over these mythical creatures

    I enjoyed my years in Malaysia, the country is very clean outside of the major centers, with long stretches of pretty uninhabited coastline, and a wonderful system of well maintained highways. MM2H 1.0 included a discount on the tax for new car purchases and I also took advantage of that and had a great time touring the country, with some very memorable destinations. It was definitely a welcome escape from the confines of HK.
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  3. #13

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    Apr 2018
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    58

    Another pro of MM2H I'd like to mention. According to my solicitor even tho my MM2H has expired, due to my having around MYR60k MM2H deposit "locked up" in my account in Malaysia, that entitles me to return at any time, renew my visa, and resume the MM2H program. Of course, within the bounds of current COVID restrictions.

    Although I haven't tested the solicitor's advice yet, I like that as MM2H inevitably evolves, participants in the program will be "grandfathered" in according to the rules when they signed-up. This certainly isn't always the case in other "retirement" destinations, and reflects very positively on the scheme in my book.

    Last edited by xhkge; 21-06-2021 at 10:17 AM. Reason: Deposit amount in ringett not renminbi
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  4. #14

    Join Date
    May 2021
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    @xhkge whats your take on people working/freelancing/running small business on MM2H! Officially MM2H allowed part time work for people over 50 but surely lot of expats must be doing something legit or under the radar to keep busy and make some bucks along the way!!! Even saw some videos showing expats were running small local hawker shop or things like that, how does it work?


  5. #15

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    Mar 2016
    Location
    Malaysia
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    @Taikoowan and @ndt: you're welcome.

    About the fixed deposit related to MM2H: it has to be deposited at a Malaysian bank. If one decides to leave the MM2H program you can't simply go to the bank to claim that money. First you have to inform the MM2H office that you leave the program. And ask them for a letter to release the fixed deposit. The bank will only give you the deposit once you show that government letter.
    I have not considered/investigated the case what happens if an MM2H holder passes away and the recipients of the inheritance have to go and get that deposit released. Most likely there is a procedure for that, I'm just not aware of it.

    About taxes from overseas income: under MM2H are you not allowed to have a job in Malaysia as Malaysia wants to protect its job market for their citizens. (There are some exceptions to this rule, allowing a Malaysian company to offer a part time job to an MM2H holder.) However, you are free to have a job outside Malaysia, or an online job. Income coming from abroad from these jobs into a Malaysian bank account are taxed at a rate of zero percent.

    shri, ndt and Cancellara like this.

  6. #16

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    Apr 2018
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    58
    Quote Originally Posted by ndt:
    @xhkge whats your take on people working/freelancing/running small business on MM2H!
    Working with your income remitted overseas hasn't been an issue in the past, I know many people who've done this for years without problems or questions. But I've started to see other countries sit up and take notice of digital nomads, and even come up with proposals/schemes to tax them. Some of these schemes are workable, others seem positively harebrained. I've no feedback on the Malaysian government's thinking on this, although it would surprise me if it isn't been at least considered, as it is in many other countries. The days when you were considered enough of an asset to a country simply by spending your money there are perhaps drawing to an end.

    Without taking the thread down a rabbit hole, I have a pet "conspiracy" theory the real reason for the recent G7 minimum corporate taxation scheme is to get people to buy into the idea that everyone should pay income tax somewhere. Begin by benignly going after "rich tax evading corporations" then extend the program to include individuals. I'm half joking about this "conspiracy", but I do think we'll see changes to the way global taxation on individuals works. That's why I mentioned MM2H 2.0 or 3.0 may introduce some changes, but that's nothing specific to Malaysia just my tinfoil hat speculation on the direction the world is going.

    As for actually working in Malaysia, I had one friend that did some consulting, but this was a specialised area and needed approval from MM2H. In such cases I reckon it will probably be simpler to just get a proper work visa (which also has the advantage of providing a path to PR).

    Pretty sure you can't work in a hawker shop on MM2H, but you touch here on the general attitude of the people towards foreigners. I think as long as you weren't obviously detracting from a nearby business most people in Malaysia wouldn't give a damn. This is in contrast with neighboring Thailand were there have been tales of people getting into trouble for the most ludicrous examples of "working without a permit" (home improvements and fixing your car come to mind). I guess what I'm trying to say as delicately as I can is on the whole I found Malaysians have a pretty good attitude towards foreigners living in their country, I never had cause to complain about the way I was treated, it was often better than I deserved

    CAVEAT: In general my experience in Malaysia is nearly 10 years out of date
    ndt and shri like this.

  7. #17

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    There is quite some discussion on this thread about MM2H and the Malaysian tax system. Basically the two are NOT necessarily connected.

    MM2H: allows you to move in and out of the country as often as you like, and stay in Malaysia as long as you like. There is no obligation to reside in Malaysia, and no requirement on the minimum number of days spent in Malaysia. (Note that the recent renewal of the Sarawak MM2H has changed on this point). Don't forget that MM2H was originally intended as an "extended tourist visa", which is why this program is/was handled by the Department of Tourism, not the Immigration Department. It was not marketed as a "retirement visa" and there is no minimum age requirement for the application.

    Malaysian taxes: everyone who is at least 183 days of a calendar year in Malaysia is considered a resident for tax purposes. You have to submit a tax form in case your taxable income exceeds a certain threshold.

    Combining the two: if you are residing in Malaysia on an MM2H visa and are in the country for at least 183 days you need to submit a tax form in case your taxable income exceeds the threshold. You don't need to submit a tax form if your taxable income is below that threshold. MM2H holders who are only a few days per year in Malaysia thus don't need to submit a tax form. As almost all MM2H holders don't work in Malaysia do they not have income from work, which would be taxable. However, MM2H holders could possess real estate rented out and thus have rental income. In that case is it likely that a tax form needs to be submitted.
    (disclaimer: I am not a tax expert or adviser)

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  8. #18

    Join Date
    Jul 2005
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    I moved with two medium sized schnauzers, and like all dogs, they had to quarantine for 7 days in a Government facility.

    The kennels are pretty basic and not air conditioned. Bring plenty of home comforts like beds/toys to make the bare concrete more homely.

    The staff there are first rate and had a genuine love of the dogs. Dr.Jerry @https://www.petexportvet.com/ arranged all our paperwork, and check ups on the dogs. He can give you the number of the main guy, sorry I have lost it.

    The legals-

    THIRD SCHEDULE
    STRATA MANAGEMENT ACT
    2013
    STRATA MANAGEMENT
    (MAINTENANCE AND
    MANAGEMENT)
    REGULATIONS 2015
    (REGULATIONS 5 AND 28)
    BY-LAWS
    The Cantonment By-Laws

    14. Keeping of animals
    (1) In a building used for residential or dwelling purposes, a proprietor shall not keep any
    particular animal in his parcel or on the common property thereof that may
    cause annoyance or nuisance to the other proprietors, or which may be dangerous to
    the safety or health of the other proprietors, or which contravenes any written law or
    rules and regulations of the relevant State or the local authority.
    (2) (2.5 Nuisances, Obstructions & Offensive Conduct – The Occupants shall not keep any
    livestock, pets, wild animals, non-domestic animals, or any other animal on the Common
    area which may cause annoyance to the Occupants. All pets shall be restrained or kept by
    the Purchaser within the Parcel.)
    (3) Animals should be restricted to the parcel unit and the cargo lift. No animal should be
    permitted to roam freely in any common area, including garden or car park, except for
    ingress and egress from the cargo lift to the compound gate or car park. In the event that
    the pet soils the ground, the owner must immediately clear up the mess.
    (4) A proprietor who is in breach of sub-paragraph 14(1) of these by-laws, shall within
    three days upon the receipt of a written notice from the management corporation
    remove the particular animal from the building. If he fails to do so, the management
    corporation may take whatever action deemed necessary to remove the particular
    animal from the building and
    (a) all cost incurred shall be charged to and imposed on the proprietor, and
    The Cantonment By-Laws

    The problem of course is defining annoyance and nuisance which can be open to massive interpretation.

    Also some management companies seem to be a law unto themselves, and need pretty aggressive legal prodding to get things changed.

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  9. #19

    Join Date
    Oct 2007
    Location
    Hong Kong
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    856
    Quote Originally Posted by Windmill65:
    There is quite some discussion on this thread about MM2H and the Malaysian tax system.
    Damn, I'm a Malaysian and I didn't even know we have to pay taxes. BTW MM2H is a visa not a PR. Also the misinformation about it being backward etc Just like every place, there's a Mid Levels and a MK. Figure out which is which and you'll be fine

  10. #20

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    Dec 2002
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    薄扶林
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    One more thing has popped up in a random discussion - being able to start a business as a passive investor.

    Came across this, and I understand this is the old scheme:

    MM2H visa holders aged 50 years old and above can work for up to 20 hours a week. This is applicable to visa holders who have specialised skills in certain approved sectors. We are advised the decision on whether to approve part time work is based on the approving committee view on whether a Malaysian could do the job.

    MM2Hers are permitted to set up and invest in businesses in Malaysia. They will be subject to the same regulations as other foreign investors but will not be permitted to become actively involved in the day to day running of the business. If they wish to do this they must switch their visa to a work permit.
    https://www.mm2h.com/3-frequently-as...m2h-programme/

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