MALAYSIA My Second Home (MM2H) pass holders have opted to cancel their visa applications due to the new regulations which require them to have large amounts in savings and high fixed monthly incomes, agents said.

They said that since the new regulation came into effect in October, there have been no new applications.

The new regulations also mean that less and less foreigners are choosing Malaysia as a destination for a second home, they added.

Under the new requirements, MM2H applicants must have a minimum of RM1 million in a Malaysian fixed deposit account. It was previously 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.

The programme was suspended pending review since 2019,but was reactivated in October.

U1 International (MM2H) Sdn Bhd managing director Anh Hye Seong said that  since the new regulation came into effect, no Koreans have applied and there have been only one or two enquiries.

Ten have cancelled their passes for three consecutive months, he said.

“Some have lived here for more than five years and successfully applied for renewal before the new rules came into effect. They have decided to cancel their visas because there is no guarantee that the government will not change the rules again,” she told The Malaysian Insight.

“Before they froze the MM2H application, at least two or three people applied weekly. Now there is zero.”

Anh’s company provides consultation which is recognised by the South Korean government.

She said many who successfully applied for passes had invested in real estate in Malaysia. Even if they didn’t settle here long-term, they were willing to deposit their retirement savings here for investments.

“Koreans are investment-oriented. They buy real estate, they come and stay here during the winter months back in South Korea and they planned to retire here. They like Malaysians and they live in their own properties.

“Now I have at least four customers who want to sell their property. Another 10 have withdrawn their fixed deposits and cancelled their passes.”

Anh said many have instead opted to go to Australia, Canada and Europe.

According to her company data, the number of Korean applicants increased every year but decreased significantly since 2010.

Her company has been around since 2007, with Koreans being the top five applicants for MM2H.

“We explained to them that they should not cancel their visa but they are concerned that the regulations will keep changing.”

Japanese pass holders cancel visas

Ryuji Ota, Lifestyle Coordinator (MM2H) Sdn Bhd director, said many have asked about updates on the programme but he was unable to answer as the government has not done anything.

Before the freeze in 2019, he said at least 20 to 30 applicants were interested in applying for MM2H.

After the revision, only five to six showed interest, he said.

“In the past two years, my company has not received any new applications. Many Japanese MM2H pass holders went back to Japan. Since November, six of my clients have decided to cancel their return to Malaysia.”

He said Japanese applicants can’t meet the RM1 million FD threshold. They also questioned the rationale behind the RM40,000 offshore income since MM2H is supposed to be a retirement programme.

Ota has been operating his consultation company for more than nine years and 90% of his customers are Japanese.

The Japanese also like to send their children to Malaysia to study at international schools as it is cheaper here and the kids get to experience different races and cultures, he said.

As of November, five have decided to cancel their visas, he added.

The Japanese, however, rarely buy houses here as they are less optimistic about real estate. They mostly rent, said Ota.

“They rent in Mont Kiara, Bangsar and Taman Tun Dr Ismail. They will rather pay a higher rent and spend on food to enjoy life in Malaysia.

“Many have lived here for 15 to 20 years. Now they are cancelling their passes and moving to Thailand, Canada and Australia.”

Consensusbiz (MM2H) Sdn Bhd managing director Daisy Ong said some foreigners living in Singapore can meet the requirements but they are small in number.

At the same time, the government has not opened MM2H for new applications, she said.

“This is a very small minority. They operate businesses in Singapore and plan to apply after retirement because they have family in Malaysia and hope to reunite with them.”

Ong said even if these new applicants can meet the criteria, they will choose to settle and work in East Malaysia.

“After the freeze, applications have dropped by 50%. Most of my clients from Europe and US are disappointed with the new rules.

“My company handles applications from 28 countries such as Japan, the United Kingdom, United States and South Africa.

“Some European and American pass holders have decided to cancel their visas and sell their businesses here because they feel the investment is too high and  the returns are low.”

Ong said most Europeans and Americans have incomes of up to RM20,000 per month after retirement.

“I have a customer who spent RM4 million to build a village here. However, after the government’s announcement, he decided to cancel his visa as he is  worried that the rules will change again.”

Many choose to settle here for the warm weather and to enjoy the culture and food, she added.

No news on new applications

MM2H Agents’ Association president Anthony Liew said that while the government announced that new applications will be opened in October, there has been no updates.

He, however, does not expect changes to the new regulations.

Liew regrets that after the new rules were announced, many foreigners decided to no longer apply for the programme.

“We can only wait and see how things will go,” he said.

Home Ministry data revealed the MM2H programme managed to stimulate the country’s economy with a cumulative gross value-added income of RM11.89 billion from 2002 to 2019 through visa fees, property purchases, personal vehicle purchases, fixed deposits and monthly household expenditure.

From the records of the Tourism, Arts and Culture Ministry, the MM2H programme brought RM21.1 billion revenue to the country from 2007 to 2019.

In September, the Home Ministry reported that there are currently 57,478 active MM2H holders. They comprise 28,249 main applicants with 29,229 who are family dependents. The number of Silver Hair Programme (for retirees) participants is 6,432. – December 10, 2021.