ALMOST one-third of consultants and agents for the Malaysia My Second Home (MM2H) programme will likely close their business in three months, a survey has found.

The MM2H Consultants Association, which polled 108 consulting companies recently, found 31.5% of respondents indicating that they cannot last longer than three months if the government’s suspension of the programme continues to drag on.

Of those surveyed, 26.9% said they have no cash reserves, while 23.1% are unsure how long existing reserves can last. Only 12% said they can probably survive a further four to six months.

In terms of confidence in their business survival, 34.3% expressed defeat, the rest did not feel optimistic, and only 13% said they have a little hope.

In terms of recent revenue, 50% said they had zero earnings in the past three months, 27.8% said revenue had plummeted by 90%, while 19.4% said revenue dropped by between 50% and 90%.

Findings from the survey also revealed that 52.8% of MM2H consulting companies might suspend operations in the first quarter of 2021.

Another 19.4% said they would close down for good.

For a programme that has helped bring money into Malaysia since its launch in 2002, 75% of the consulting companies said they have not received any support from the government or from financial institutions, whether in terms of grants, government-backed loans or a moratorium on loan repayments.

The programme, which has netted Malaysia around RM40 billion from its start to 2019, was temporarily frozen in March for a review of its conditions and application processes, Tourism, Arts and Culture Minister Nancy Shukri said.

Earlier this year, she said the review should be completed in December, but to date there have been no updates from her or the ministry.

The Malaysian Insight reported yesterday how many MM2H consulting companies are facing closure soon.

MM2H Agent Association president Anthony Liew said the 108 who responded to the survey were from a total of 250 members.

To date, 30% of the MM2H consulting companies have scaled down operations and may proceed with more lay-offs in the next three months.

In terms of the number of employees affected, the poll found that 51.9% of companies had between two to four employees before the pandemic, 15.7% had between five and eight workers, and 12% had more than eight employees.

Around 19% categorised themselves as self-employed.

The Covid-19 pandemic also saw more consulting companies downsize and convert themselves to the self-employed category, which increased by 32.4%.

Others also reduced the number of staff, and only 1.8% of companies retained more than eight workers.

In terms of adapting to the pandemic and loss of revenue, 46.3% or 50 companies switched to flexible working hours and cut pay.

The second most common method to stay afloat was to diversify business and consultancy services, which 39.8% or 43 companies did.

Other steps taken included employee lay-offs, selling fixed assets to increase cash flow, merging branches, receiving moratoriums on loan repayments, and moving premises or sharing leases to reduce rental expenses.

Since new applications for the programme are frozen, Liew said most of the companies that are operating are in “semi-active state” and only deal with renewing visas for existing MM2H visa holders.

There is no clear indication in sight whether the government will revive the programme, which is also to some extent reliant on the reopening of Malaysia’s borders to tourists.

Applicants for the programme have to be physically present in Malaysia to begin the process. – December 19, 2020.