Malaysia: MM2H restructured into four tiers

Malaysia's long-stay residence scheme allows a foreigner to settle in the country without taking up local employment, on the basis of a fixed deposit in a Malaysian bank and, depending on the tier, a property purchase.

Fixed deposits range from $150,000¹ for the entry category to $1,000,000² for the highest category.

The participant must purchase a residence with a minimum value of MYR 600,000³, an amount that may vary by Malaysian state, as land policy is partly a matter for the federated states.

An age threshold of more than 50 years⁴ separates the applicant categories, with different conditions on either side.

The permit does not confer the right to work for a Malaysian employer. It is a residence status, not a work permit, and this distinction applies across all tiers.

The scheme is therefore aimed at a specific profile: someone with capital to tie up and income from abroad, who is looking for a living environment rather than a job market. Any other project falls under different routes, whether professional or entrepreneurial.

The programme was suspended, then reopened with significantly stricter conditions, before being restructured into tiers. This sequence played out over just a few years.

Participants admitted under the previous conditions faced the question of whether their rights would be maintained on renewal. This is the most important precedent to be aware of: a scheme of this type does not necessarily grant vested rights.

This instability is at odds with the kind of project it is supposed to support. A family that moves its life and puts its children in school cannot plan around a permit whose conditions change with each budget.

We do not publish the duration of each tier, the renewal conditions or the property amounts specific to each state: the programme has been amended several times and we were unable to verify its current version in an up-to-date official source.

The practical rule that follows is simple: no earlier documentation more than a few months old can be considered reliable, and verification must be done with the Malaysian authority, never with an intermediary.

The Malaysian rate schedule ranges from 0%⁵ on its first band to 30%⁶ at its top marginal rate.

Tax resident status is assessed in particular on the basis of presence of 182 days⁷ during the year. A non-resident is subject to separate rules, generally less favourable for employment income.

Dividends received by an individual are now taxed at 2%⁸ above a dividend income threshold, ending the previous full exemption.

Corporate income tax stands at 24%⁹ at the standard rate.

Finally, Malaysia applies a territorial system whose scope has been adjusted several times for certain categories of foreign income. It should be checked on a case-by-case basis rather than taken for granted.

• The fixed deposit is tied up and is not a productive investment.
• The minimum property price varies by Malaysian state: it must be checked locally.
• The permit does not confer the right to work for a local employer.
• The programme has already been suspended once: vested rights are not guaranteed.
• Tax residency is acquired beyond 182 days⁷ of presence per year.

The trade-off is therefore clear. Malaysia offers a very favourable cost of living, a good-quality private healthcare system, widespread use of English and a convenient location in South-East Asia. What it does not offer is predictability in its residence scheme, and that is precisely what a family relocation needs.