MM2H

MM2H Overview The Malaysia My Second Home Programme allows people from all over the world who fulfil certain criteria, to reside in Malaysia for long-term stay. To qualify for the program, applicants must meet certain financial and medical criteria. Successful applicants are then entitled to enter and leave the country on a largely unrestricted basis, and also benefit from other incentives aimed at making their stay in Malaysia more convenient. The Malaysia My Second Home Programme replaced the Silver Hair Programme. The ten-year Social Visit Pass is extended to all Silver Hair and MM2H participants who were previously approved under the five-year Social Visit Pass, subject to the validity of their passports. Employment Pass holders who wish to participate in the MM2H programme are exempted from the “cooling off period” on the condition that their application to participate in MM2H programme is submitted 3 months before the expiry of the Employment Pass. ID-Cards will be issued to MM2H participants with permanent address in Malaysia. This is validated by submitting the Sales and Purchase Agreement or Tenancy Agreement in Malaysia.   MM2H - Incentives Participants of the Malaysia My Second Home Programme are provided with various incentives: House Purchase Please be informed that property purchase is not a pre-requisite for participating in MM2H programme.  Any foreigner may purchase any number of residential property in Malaysia, subject to the minimum rates established for foreigners by the different states. They start from RM500,000 per unit for most states, from 1st January 2010. Land is a state matter and it is important to check state laws before making any commitment, as the minimum purchase price is not standardised between states.  We advise buying homes which are already issued with certificates of fitness but if you intend to purchase from developers, ensure that it is a reputable company. Also ensure that your lawyer does a thorough check with the local land office that you have ownership rights to any property that you are purchasing. Profit made on the sale of property is 5% (Real Property Gains Tax). Quick comment: Foreigners are able to purchase as many properties as they wish, subject to their exceeding the minimum purchase price criteria, independent of whether they are on the Malaysia My Second Home Programme or not. Car Purchase Each participant is allowed to bring in their own personal car or to purchase a locally-assembled car without paying import duty, excise duty and sales tax. Car Import Application to IMPORT a motorcar from the participant’s country of citizenship/last domicile must be forwarded to the Ministry of Finance within a period of six months from the endorsement date of Malaysia My Second Home (MM2H) social visit pass. The condition for such importation is that the MM2H participant should be the owner of the motorcar prior to obtaining the MM2H visa, as evidenced in the motorcar registration document. Locally-Assembled Car An Application to PURCHASE a new motorcar made or assembled in Malaysia must be must be forwarded to the Ministry of Finance within a period of one year from the endorsement date of Malaysia My Second Home (MM2H) social visit pass. Note: 1 - Completed application forms with relevant documents which are submitted to Ministry of Finance will be processed within 10 working days. 2 - Do not make an outright purchase of the motorcar before obtaining approval for tax/duty exemption from the Ministry of Finance. However, a booking for a motorcar may be made prior to obtaining approval from the Treasury. 3 - Importation or purchase of motorcar must be for personal use only and not for commercial use. 4 - 'Personal Car' is referred to a car which was purchased by participant before joining the MM2H programme. 5 - Participants are only allowed to sell their imported/locally purchased car after 2 years' stay on the programme. Quick tip: This is a great incentive. But it can be difficult and expensive to import your own car - there's also a lot of hassle involved. It can be easier and more cost effective just to buy a locally-assembled car - Toyota, Honda, BMW, Mercedes, and Volvo all assemble some of their models in Malaysia. Domestic Helper Each applicant is allowed to apply for one maid subject to the prevailing guidelines of the Immigration Department of Malaysia. Education Applicants are allowed to bring their children who under 21 years old and not married as their dependants under this programme. Children who intend to continue their schooling in Malaysia are required to apply for a Student Pass and should be insured throughout their stay under this programme. Tax Participants are bound by the policies, systems and regulations of taxes of this country and they do not have exemption qualifications as granted to Diplomatic Missions in Malaysia. However, tax exemption is given to pension remitted into Malaysia. Participants are required to obtain the endorsement from the Authorities in their country of origin as to the total amount of yearly pension received. A copy of this letter has to be submitted in their application. MM2H - Eligibility The Malaysia My Second Home Programme ("MM2H") is open to all citizens of countries recognized by Malaysia regardless of race, religion, gender or age. Applicants are allowed to bring along their spouse and children as dependents (unmarried children aged 21 years and below, step-children, disabled children and parents). Age limit of unmarried dependent children is raised from 18 years to 21 years. A declaration stating that the child is unmarried and all expenses during the stay in Malaysia will be borne by the principal participant of the MM2H program is required. Foreign spouses of Malaysian nationals are eligible to apply for MM2H, subject to the terms and conditions of the MM2H programme. Alternatively, they have the option to apply for the Spouse Programme. Financial Requirements Successful applicants are required to comply with the following financial criteria upon receipt of the conditional approval letter from the Malaysian Immigration Department: 1. Aged Below 50 years Open a fixed deposit account of RM300,000. After a period of one year, the participant can withdraw up to RM240,000 for approved expenses relating to house purchase, education for children in Malaysia and medical purposes.  The participant must maintain a minimum balance of RM60,000 from the second year onwards and throughout their stay in Malaysia under this programme.  2. Aged 50 years and above Can either choose to: Open a fixed deposit account of RM150,000 ; or Show proof of monthly offshore income of RM10,000, such as pension scheme.Only applicants who are drawing from Government Approved Funds can be considered for the monthly offshore Income criteria. The definition of such approved funds is very narrow. Thus very few applicants manage to qualify under the monthly offshore income criteria. After a period of one year, participants who fulfil the fixed deposit criteria can withdraw up to RM90,000 for approved expenses relating to house purchase, education for children in Malaysia and medical purposes. The participant must maintain a minimum balance of RM60,000 from the second year onwards and throughout their stay in Malaysia under this programme. Effective 1 July 2008, new applicants who have purchased and owned residential property which were bought at RM1 million and above in Malaysia are eligible to apply for exemption from placing the full FD amount required of MM2H participants. They only have to comply with the basic financial requirement of FD or RM 60,000. This amount may not be withdrawn until the participants decide to terminate their participation in MM2H programme Note Successful applicants need to open their fixed deposits in Ringgit Malaysia (RM) only. Participants need to obtain prior approval from the Ministry of Tourism before proceeding to withdraw the fixed deposit  Participants under this programme may withdraw their entire fixed deposit anytime should they decide to terminate their stay in Malaysia under this programme. However, they must obtain prior approval from the Ministry of Tourism. Medical Report All applicants and their dependents (spouse and children) are required to submit a medical report from any private hospital / registered clinic in Malaysia. Medical Insurance Approved participants and dependents (spouse and children) must possess a valid medical insurance policy which is applicable in Malaysia. Restrictions Qualified MM2H participants aged 50 and above with specialised skills and expertise that are required in the critical sectors of the economy, are allowed to work not more than 20 hours per week. The approval to work part-time is subject to the following conditions: the application is approved by the MM2H Special Committee; the work contract needs to state that the MM2H participant is working part time and to attach the work schedule; and total number of hours of week does not exceed 20 hours.  MM2H - How To Apply Effective 9 January, 2009 foreign citizens may apply to participate in MM2H programme directly, without going through any other third party, OR may continue to use the services of MM2H agents licensed by the Ministry of Tourism, Malaysia. Effective 9 January 2009, there will be a freeze on issuance of new MM2H agent licenses by the Ministry of Tourism, Malaysia. New Applications All applicants who wish to apply to stay in Malaysia under the Malaysia My Second Home Programme must submit the following documents: 1) Letter of Application (with a cover letter). The application must include details of: Personal background with an indication of your intention to join the Malaysia My Second Home Programme Who is applying with you under the application  Briefly explain how you will be financially self-sufficient in Malaysia  Which financial criteria you wish to use: either Fixed Deposit or monthly offshore income (for 50 years and above) 2) Two (2) copies of Form IM 12 (Social Visit Pass Form) 3) Two (2) passport-sized photographs 4) Personal bond (if applicants appointed sponsors) 5) Certified copy of Passport / travel document (all pages) 6) Certified copy of Marriage Certificate (if accompanied by spouse) 7) Certified copy of birth certificate (if accompanied by children) 8) Resume with 10 years of working experience 9) Certified copy of latest bank statement /other related financial document to indicate financial capability to support your stay in Malaysia 10) At least 3 months' certified copies of payslip/pension slip/income statement etc. Notes Items 2-4 are also required if accompanied by spouse and children as dependants Age limit of unmarried dependent children is raised from 18 years to 21 years. A declaration stating that the child is unmarried and all expenses during the stay in Malaysia will be borne by the principal participant of the MM2H program is required. Dependants’ include unmarried children aged 21 years and below, step-children, disabled children and parents. Participants from selected countries who are entering Malaysia with Tourist Social Visit Pass prior to approval of Malaysia My Second Home programme are required to pay for Journey Performed Visa (JP) (RM500) . The payment should be made to the Immigration Department Putrajaya before they get endorsement of the Malaysia My Second Home Sticker in their passport. Certification can be done by Notary Public/Commissioner of Oath/Government Official  The processing and approval process will take 10 weeks from the date of submission of the application (provided the documentation is complete) Renewing Applicants Renewal can either be submitted directly by the individual participant or through a licensed company to the Immigration Department, Putrajaya or The State Immigration Office which issued the initial Social Visit Pass.The following documents are required for the renewal: IM 55 Form Copy of the old and new passport. Copy of the fixed deposit certificate Copy of the valid medical insurance. MM2H - FAQs FIXED DEPOSITS  Q. Can I withdraw my fixed deposit at any time during my stay in Malaysia? A. Participants are not allowed to withdraw their fixed deposit during the first year, unless for emergency purposes and with prior approval from the Ministry of Tourism.  Q. Can I place my fixed deposit in a Malaysian bank located in my country? A. No. Participants must open a fixed deposit account in any Malaysian local bank or financial institution in Malaysia.  Q. Can the purchase of a house in Malaysia which is valued at more than RM250,000 be considered as having fulfilled the financial criteria for this programme? A. No. Participants are required to fulfil the fixed deposit requirement or monthly offshore income for age 50 years and above.  Q. Am I allowed to withdraw my fixed deposit for a few months and then top it back later? A. No. Participants are not allowed to do this, unless for emergency purposes and with prior approval from the Ministry of Tourism. Q. When can I withdraw my fixed deposit? A. After a period of one year, the participant may withdraw their fixed deposit for approved expenses relating to house purchase, education of children in Malaysia and medical purposes OR when they decide to terminate their stay in Malaysia by first informing the Ministry of Tourism of their intention. Participants can apply to withdraw part of their fixed deposit for emergency cases such as medical purposes, etc. with prior approval from the Ministry of Tourism.  INVESTMENTS Q. Can I open a restaurant, bookshop or clinic in Malaysia under this programme? A. MM2H participants are allowed to invest and actively participate in business, subject to existing Government policies, regulations and guidelines which are in force for the relevant sectors. EMPLOYMENT Q. I am a qualified doctor in the US. Can I work in a Malaysian hospital or a private hospital? A. Qualified MM2H participants aged 50 and above with specialised skills and expertise that are required in the critical sectors of the economy, are allowed to work not more than 20 hours per week. The approval to work part-time is subject to the following conditions: a) the application is approved by the MM2H Special Committee; b) the work contract needs to state that the MM2H participant is working part time and to attach the work schedule; and c) total number of hours of week does not exceed 20 hours. EDUCATION Q. Do kinder garden level children need a Student Visa to attend kinder garden here? A. Children below the school-going age (that is 7 years old) are not required to apply for a Student Visa. They need only apply for a Social Visit Visa.  Q. If my children are already married and want to study in Malaysia with their spouse, do they need to pay the fixed deposit? A. This is not necessary. They can apply for a Student Visa once they have obtained places to study in Malaysia. HOUSE PURCHASE Q. Are the participants entitled to any special entitlements? A. Foreigners are able to buy as many properties (residential and commercial) as they wish whether or not they join the Malaysia My Second Home Programme (subject to the minimum price criteria). Q. Do I have to pay the yearly assessment and quit rent for my houses like the local? A. Yes.  Q. In the event of unforeseen death is the participant able to hand over his Malaysian assets to any of his beneficiaries smoothly. Does the Government have any restriction on this matter? A. Yes, provided they have a Will which indicates clearly to whom the properties are to be given. If not the next of kin of the participant will have to apply to the Government to have their properties released to them as the rightful heirs.  Q. Must foreigners buy new Malaysia property only, such as from developers, or can they purchase any property, such as from individual owners (second-hand or third-hand property)? A. Participants can purchase any type of properties provided that it has been issued with a CF (Certificate of Fitness).  Q Does the RM250,000 foreign property ownership regulation apply to landed property only? A. No. It also applies to other properties with strata titles such as condominiums, apartments and service apartments.  Q. If I buy a piece of land costing RM200,000 to build a house costing RM200,000, which is less than the RM250,000 regulation, am I breaking the regulation? A. No, since the total cost of the whole house purchase is RM450,000 which is more than the RM250,000.  Q. Do I need to obtain prior approval from the Foreign Investment Committee (FIC) for the purchase and sale of my house? A. FIC approval is no longer required for foreigners whether they are under the Programme or not. Q. Am I subjected to property gain tax if I make a profit from selling my house? A. No. Property gains tax has been abolished for both Malaysians and foreigners from April 2007.  CAR PURCHASE Q. Is a participant who buys a second-hand local car eligible for tax exemptions? A. Second-hand cars are transacted on a willing buyer, willing seller basis and the government does not levy any sales tax and excise duty on such transactions. Therefore tax exemptions do not arise. However, second hand cars which are imported are subject to sales tax and import duty at the point of entry.  Q. If I had a car accident and as a result I need to change my car, do I have to pay back the tax exemptions? A. Given the following situations: i. If the car is repaired and sold it will be subject to the applicable tax/duty according to the prevailing rates. ii. If the car is written off, taxes will be waived. iii. If the participant wishes to buy another car, their application will be processed on the merit of each case. Under normal circumstances a participant of this Program is allowed tax exemption for one car only.  Q. When can I sell a car which has been given all the tax exemptions? A. Cars that have been exempted from taxes and duties under this Program can be sold or its ownership transferred provided the prevailing taxes and duties on the car have been paid prior to the transaction. However, for imported cars the condition stipulated in the AP should be complied before any sale or transfer can be permitted.  INCOME TAX Q. What kind of taxes are the participants of this programme normally subject to? A. Income tax is imposed on income earned from investments in local companies and the local share market. Real property gains tax has been abolished Please refer to www.hasilnet.org.my for more details on the tax structure.  Q. Is the interest on their fixed deposit taxable? A. Interest earned by an individual from their fixed deposit account is exempted in the following situations:- i. Period exceeding twelve months or more – any amount of interest. ii. Period not exceeding twelve months – interest on fixed deposit account of up to RM100,000.  Q. Is income remitted from abroad taxable? A. Before the year of assessment 2004 income remitted from abroad to Malaysia (apart from pension) was subject to tax. However, from the year of assessment 2004 all income remitted from abroad is not subject to tax.  Q. Does the participant have to submit any personal tax declaration to the Income Tax Department of Malaysia, as Malaysians have to? A. Yes.  Q. If the participants have to submit income tax returns to the Income Tax department, are they entitled to any exemptions under the programme? A. They will only be taxed on the income earned in Malaysia after taking into account the personal tax allowances. The income will be taxed according to a progressive tax rate structure.  Q. I am German and my country has a `double taxation agreement’ with Malaysia. I have an early pension and if I stay in Malaysia for at least 184 days, my pension scheme will not be taxed by the German Government and will also not be taxed by the Malaysian government. Is this correct? A. Under this Programme, pensions remitted to Malaysia are exempted from Malaysian tax.