This is the unedited version of the letter published in today’s Star newspaper:
The Sultan of Johor and many others have lamented the new Malaysia My Second Home (MM2H) requirements. Other than an increase in the liquid assets needed and dropping the visa’s validity from ten years to only five years, retirees now need a monthly income of RM40,000 instead of the previous requirement of RM10,000.
You may well ask how can a retiree earn RM40,000 per month?
To answer that question, let’s look at interest rates. In the past few years, interest rates have kept falling and with the pandemic have plummeted globally to almost zero. Many Malaysians now struggle to obtain a fixed deposit rate of above 1%.
So to earn RM40,000 a month based on a 1% return would mean that a retiree would need assets of RM48 million (40,000 x 12months = 480,000. Then 480,000/0.01 = 48 million). As such even many wealthy retirees will find it impossible to earn RM40,000 monthly based on interest earned on bank deposits. Even if they plunge into riskier investments, perhaps through units trusts or a bond fund, say with a return of 3%, they would need to invest RM16 million.
Stipulating a monthly income of RM40,000 means that only the super rich can retire in Malaysia. I wonder what was the purpose behind the changes. Are there too many foreign retirees in Malaysia so that we need to cull their numbers? Have they caused a social problem in this country? If we do persist with these new requirements, perhaps the MM2H program could be renamed MMUH, which would be short for Malaysia My Unaffordable Home!
It would be interesting to compare our program to what is on offer overseas. You can retire in the Philippines with a deposit US$10,000 (RM42,000) which can be used as part of a property purchase with no limit on your length of stay. Just across the border, Thailand offers an annual renewable visa with a deposit of 800,000 Thai baht (RM103,000) in a local bank, those funds being available to cover your expenses during the year.
Choosing to go further afield, you can retire in Portugal with the D7 annual visa merely with proof that you are earning 7,200 Euros (RM35,500) per year, which is to cover living expenses. There is also Panama where an annual income of US$1000 (RM49,800) gets you in. So our MM2H program which now requires an annual income of RM480,000 doesn’t stack up well against the competition.
So what does the new requirements mean for retirees already living in Malaysia?
When their visas do come up for renewal, most of them will be forced to leave the country. This would be pity as they would have made friends here and have become part of our community.. Some have married locals and these circumstances may well force them to live apart If they’ve bought properties locally, they would have to sell them which will take time, effort and may suffer financial losses because of our now softer property market. Some even have children enrolled in our schools and they will have to be uprooted.
To many foreign retirees, Malaysia is not their second home, but their only home. They are our guests and deserve to be treated fairly.
The writer is an author of numerous fiction and non-fiction books including A Vanishing (part of the Midnight Children trilogy), Scream to the Shadows and A Children’s History of Malaysia.