Revisiting MM2H Criteria: Making Malaysia a More Attractive Retirement Destination
Kepong MP Lim Lip Eng has called for a review of the 10-year holding criterion for property purchases under the Malaysia My Second Home (MM2H) residency visa scheme. His proposal aims to make Malaysia a more attractive retirement destination for foreigners, especially in light of recent guidelines that have deterred many prospective applicants.
The Current MM2H Scheme: Stricter Requirements
The revised MM2H scheme, introduced with stricter requirements, mandates higher bank deposits ranging from US$150,000 to US$1 million and property investments between RM600,000 and RM2 million. This contrasts sharply with the previous scheme, which required RM300,000 for applicants below 50 and RM150,000 for those above, without a mandatory property purchase.
Impact on Prospective Applicants
Lim highlighted that the rigidity of the current scheme makes it less appealing compared to more flexible options in neighboring countries like Thailand and Indonesia. Agencies processing MM2H applications have reported a dramatic 90% drop in interest from prospective applicants. This decline threatens to reduce the economic benefits previously enjoyed under the scheme.
Economic Contributions and Current Challenges
The original MM2H scheme attracted a diverse group of retirees and expatriates, contributing RM58 billion to the local economy over 17 years. However, the new scheme’s focus on high-net-worth individuals has significantly narrowed the applicant pool. Lim argued that the compulsory property purchases are unlikely to boost Malaysia’s housing market as intended and could leave many units unsold or unrented.
Balancing Attractiveness and Economic Benefits
Lim emphasized the need for the MM2H scheme to strike a balance between attracting high-net-worth individuals and providing enough flexibility to make Malaysia a desirable retirement destination. Economists quoted in a recent article by The Straits Times shared similar sentiments, suggesting that the new MM2H rules offer limited economic benefits due to their restrictive nature.
Proposed Revisions and Potential Benefits
Revising the 10-year property holding criterion could make the MM2H scheme more competitive and appealing. By offering more flexible terms, Malaysia could attract a broader range of retirees and expatriates, stimulating economic growth and enhancing the property market. This approach would align with successful models in neighboring countries, making Malaysia a top choice for foreign retirees.
Conclusion
The MM2H scheme’s stringent requirements have significantly impacted its attractiveness to potential applicants. Revisiting and revising these criteria, particularly the 10-year property holding requirement, could rejuvenate interest and bring substantial economic benefits. By striking a balance between attracting high-net-worth individuals and offering flexibility, Malaysia can solidify its position as a premier retirement destination for foreigners.
