VISAS FOR FOREIGNERS

In Sam Choong’s experience over the past year, Malaysia is still drawing long-stay foreign visitors. In fact, apart from the traditional British long stay visitors, visitors from a wider range of nationalities are beginning to make Malaysia their home. Previously, visitors were attracted to Malaysia because it is safe, affordable (its advantages include a reasonable cost of living and high business potential) and is a good base if you are keen on visiting various destinations in the region for work or play. However, places like Penang, Malacca, Sabah & Sarawak have consistently been featured in international media by travel gurus and are attracting a lot of foreign interest. As such, there are many more enquiries on the various visas and passes that are available.

Malaysia My Second Home

This scheme is probably the most publicised visa and, consequently, the most requested one. It is also the most misunderstood. Some of the common misconceptions are that you need to qualify for the MM2H scheme in order to own a home in Malaysia; that it is only applicable to old people; or that it comes with arange of privileges. In a nutshell, MM2H is a long term visa which allows the holder to stay in Malaysia for up to 10 years whilst certain successful applicants are permitted limited work. Typically, my clients who apply for this visa are successful entrepreneurs who are well invested in properties or stocks within or outside Malaysia and have a more than adequate income source. There are also some who ply their trade outside Malaysia and visit Malaysia for its warmth during the winter or for certain tax considerations. Whatever the reason, those in this category don’t need to engage in employment in Malaysia. A fringe benefit of this visa is that it allows the successful applicant the right to purchase certain cars tax free. For instance, a brand new Volvo V40 would cost a Malaysian RM173,888 but is available to the MM2H visa holder for only RM108,193. This benefit does come with a condition that you are not to sell the car for 2 years from the date of purchase. (www.mm2h.gov.my)

Employment Pass

This pass is for those who are looking to engage in full time work, whether as an employee or undertaking a hands on management role for the company he sets up (if the investor elects to merely hold shares and/or sits on the board of directors in a non-executive or non management role then an employment pass is not necessary). Either way, the employer or the investor’s company need to apply to the Immigration Department for an employment pass and justify the need for such an expatriate. If the foreign investor were to set up a 100% wholly foreign owned company it should be capitalized to at least RM500,000 or more, depending on the industry, prior to the application. Typically, a successful applicant gets a two-year employment pass.

(www.imi.gov.my)

TalentCorp’s Resident Pass

This is a pass that was introduced by the government in 2011 and is applicable to highly qualified Malaysians working abroad and expatriates as well as top foreign graduates who have completed their tertiary education in Malaysia. If the foreign expatriate qualifies for this pass, this would be a good one to go for from a cost point of view as it allows the holder and his spouse to work in Malaysia for up to ten years. There is no requirement for a deposit and I’ve been made to understand that this is a relatively easy application for the applicant to make on his own so the applicant also saves agency fees. Furthermore, unlike the employment pass, this pass is not specific to one employer so the holder can move employment without needing to reapply. Advantages for returning Malaysians working abroad include lower income tax and a limited tax exemption on a locally made or imported car. (www.talentcorp.com.my)

Other visas

As I mentioned, there are many more visas that may suit the foreign applicant. These include visas commonly known as the Guardian visa (I came across this visa when I advised a developer on a development project catered exclusively for foreigners. During my research, I realised that there are a number of foreign mothers who reside in Malaysia just so that they can accompany their children who attend school in Malaysia. Holders of the Guardian visa are granted a long term stay visa provided their child attend an educational establishment in Malaysia), the Spouse visa (as the name suggests, this is available to spouses of Malaysians) and visas available to foreigners seeking medical treatment in Malaysia etc.

The above hopefully gives you an insight into the variety of options available to foreign visitors. Do send Sam a note to Sam@ckylegal.com if you require clarification on the above.

PROPERTY PURCHASE BY FOREIGNER (INCLUDING UNDER MM2H):

Just to be clear, although having MM2H does have benefits (see below), a foreigner does not need MM2H to purchase a property. This article will focus on the technical side of property purchase in Penang by foreigners including those holding the MM2H visas.

1) THE LAWS GOVERNING FOREIGN PURCHASE UNDER MM2H:

The main laws governing ownership of property include, the National Land Code 1965, The Housing Development (Control And Licensing) Act 1966 & Regulations 1989, The Strata Titles Act 1985 and The Strata Management Act 2013.

The National Land Code 1965 sets up the registry in the land office for how titles are to be registered and ownership of land are recorded. The Housing Development (Control And Licensing) Act 1966 & Regulations 1989 guards purchasers of properties pending construction and prior to completion of construction. Whereas the National Land Code is a general law that regulates land or land and building, the Strata Titles Act 1985 facilitates the issuance of individual titles for units in a building block called strata titles and their transfer to the purchasers. Last but not least, once the unit is delivered and owned by the purchaser, the Strata Management Act 2013 ensures that the building and its common areas are taken care of, such as management of common properties and collection of payments of maintenance fees and sinking funds, amongst others.

2) TYPES OF PROPERTY AVAILABLE TO FOREIGN PURCHASERS

Purchase of property by foreigners are regulated by Section 433B of the National Land Code. Section 433B requires a foreign purchaser to apply to the State Authority in which the property is located for their consent to the acquisition. Each state, in turn, has its own guidelines. In Penang, the fee for such an application is RM10,000* (* applicable for individual purchaser purchasing residential property and for each lot of title) with a further 3% of the purchase price being payable on the consent (effective from 1st February 2014). Registration fee for transfer of title has also been increased to RM10,000 for the first RM1,000,000 of the purchase price and 0.5% subsequently. The respective States may further impose restrictions as to the type of property a foreigner can purchase. For instance , on Penang Island, foreigners can only acquire apartments above RM1,000,000 or landed properties above RM2,000,000 and may also attach conditions of ownership (For example, the state may require the property to be owner occupied or not be sold within 3 years of purchase).

However, if a foreigner holds a MM2H visa, he is allowed to purchase two units of residential properties in Penang at the lower minimum threshold of RM500,000 each.

Other things to look out for when purchasing property are whether the property is leasehold (the balance number of years left to run on the title may be critical as banks are reluctant to lend on titles with approximately 50 years or less) or freehold, whether the individual titles have been issued and whether there are any restrictions on the title which would require State Consent prior to sale (a typical restriction would be the requirement for the State to approve the transfer and charge of the title, whereby delaying the completion of a conveyancing transaction).

3) CONVEYANCING PROCEDURES & TIMELINES

For residential properties under construction (“off plan”), the Housing Development (Control & Licensing) Act requires the Developer to utilize a standard format agreement that aims to protect the Purchaser’s interest. The timeline from the time of signing to vacant possession is 24 months for landed units & 36 months for stratified property.

For ready built properties, a sale and purchase agreement is to be drawn up by a solicitor on terms mutually agreed between the seller and purchaser. Typical terms & procedures include a land search conducted on the property, negotiations on commercial terms such as whether the purchase price include deposits with the developer, fixtures & fittings or is the purchase with vacant possession. Usually a deposit, being 10% of the purchase price is paid upon signing a conditional (on State Authority approval) sale and purchase agreement. The usual timeline for completion of a sale and purchase transaction by a foreigner would take between 3 to 6 months from signing to vacant possession.

Loans by local financial institutions are available to foreign purchasers for up to approximately 70% of the purchase price, provided that financial documents are submitted to support the application of the

loan. Release of loan sums would usually take between one to two months from bank’s letter of approval. 

The Solicitors’ Remuneration Order 2006 regulates fees for the solicitors acting on behalf of a purchaser in respect of the purchase and/or loan.

This concludes our article. Whatever your reasons for reading this, I hope that this will give you an idea of what goes on in the purchase of a property in Malaysia by a foreigner.

Sam Choong Khuat Yau is an Advocate & Solicitor based in Penang whose areas of practice include advice on the purchase of Malaysian property, setting up and/or purchase of companies, representative office and the application of related visas or passes such as the Malaysia My Second Home scheme and employment passes. Sam practices at Messrs Khaw Cheow Poh & Associates (www.ckylegal.com) and can be contacted at Sam@ckylegal.com

The above article is correct as at the 27th, November 2014.

www.ckylegal.com

Property Ownership in Malaysia

 SAFEGUARDS TO PROPERTY OWNERSHIP IN MALAYSIA – THE LAWS:

1) THE NATIONAL LAND CODE

This is the main law that sets up a registry where ownership of land and property can be recorded (ie. the land office) and a title issued to the owner to reflect his interest in the property.

2) THE HOUSING DEVELOPMENT (CONTROL AND LICENSING) ACT 1966 & REGULATIONS 1989

This is the law that guards purchasers of newly launched properties (pending construction). One of its main features are the regulation of developers by the Ministry of Housing, a Tribunal to hear claims against the developer and the standard format agreements a developer has to sign with buyers which contain terms such as:

• The specification of the property;
• A deadline for delivery of vacant possession of the Property of 24 months (landed properties)/36months (apartments and/or stratified landed properties) from the date of the sale and purchase agreement, failing which interest at the rate of 10% per annum on the purchase price shall be payable by the developer;
• The purchase price is to be paid progressive in stages and the completion of each stage is to be certified by the developer’s architect;
• The retention of a stakeholding sum of 5% of the purchase price for up to 24 months to ensure that any necessary rectification works are carried out by the developer.

3) STRATA TITLES ACT 1985

Whereas the National Land Code is a general law that regulates land or land and building, this Act facilitates the issuance of individual titles for units in a building called strata titles and their transfer to the purchasers. This Act also:

• Contains provisions for the regulation of the building and its common areas;
• Sets up the Strata Titles Board to hear and determine any disputes under this Act, for example any dispute that may arise between purchasers of adjoining units. 

4) THE BUILDING AND COMMON PROPERTY (MAINTENANCE AND MANAGEMENT) ACT 2007 (SOON TO BE REPEALED UPON STRATA MANAGEMENT ACT 2013 BEING IN FORCE)

Once the unit is delivered and owned by the purchaser, this is the law that ensures that the building and its common areas are taken care of. This Act, amongst other things:

• appoints an officer called the Commissioner of Buildings to implement the provisions of this Act (namely to ensure accountability of the developer and the Joint Management Body/Management Committee);
• requires that the developer deposits the maintenance funds it collected into the Building Maintenance Account;
• sets up the Joint Management Body (“JMB”) to oversee the management of the building. This body is made up of the developer and elected unit owners;
• the house rules & payment amount for maintenance of the common property and the building will be determined by the JMB;
• an annual general meeting and audited accounts are to be held and presented; 

Now that I have hopefully convinced you that your property investment in Malaysia will be safe, lets move on to the types of Property available to foreigners in Malaysia.

Sam Choong

1st December 2014

TYPES OF PROPERTY AVAILABLE TO FOREIGN BUYERS / THINGS TO LOOK OUT FOR

Purchase of property by foreigners is regulated by the respective State Authorities (Section 433B of the National Land Code). Each state also has their respective guidelines so it is best to check prior to buying. Generally, houses, apartments and land parcels developed specially for building your own house in the state of Penang can be purchased provided (effective from 1st July 2012) that they cost RM1,000,000/- minimum for any property except for landed properties on Penang Island, whereby the threshold is RM2,000,000/-

Other things to look out for when purchasing property are:

• whether the property is leasehold or freehold;
• whether the individual titles have been issued;
• whether there are any restrictions on the title (some titles, especially leasehold titles requires State Consent prior to sale)

 Now that you have chosen your property, let’s look at the sale and purchase agreement procedure. 

SALE AND PURCHASE AGREEMENT (“SPA”) PROCEDURE, TIMELINE, FEES & COSTS (*see table)

Property pending construction:

A standard format as prescribed by the Housing Development (Control & Licensing) Act is to be used by the Developer and the Purchaser. The timeline from the time of signing to vacant possession is 24 months for landed units & 36 months for apartments.

Ready built property

A sale and purchase agreement to be drawn up by a solicitor on terms to be agreed between the seller and purchaser. Typical terms & procedures are as follows:

• a land search is conducted on the property;
• negotiations on the property ie. does the purchase price include deposits with the developer (sinking fund etc), with fixtures & fittings, vacant possession or subject to tenancy? Can the purchaser come in to take measurements for renovation?
• 10% of the purchase price is paid on signing (if outside Malaysia, before a notary public or the Malaysian High Commission) a conditional (on State Authority approval**See table for fees and disbursements) sale and purchase agreement;
• a private caveat is lodged;
• an application is made to the State Authority (1-3 months for consent to be obtained);
• 3 months for payment of 90% of the purchase price starts to run from date of the State Authority consent;
• Once State Authority consent obtained, payment of stamp duty on the Transfer and Loan;
• On the expiry of the 3 month payment period, payment of the 90% purchase price and delivery of vacant possession. 

** State Authority Approval – cost based on purchase of residential units by individuals (for company purchasers the rates would be higher & all rates are subject to change from time to time):

STATE	TIMELINE	COST	RESTRICTIONS
PENANG	2 months	RM10,000/- on submission, 3% of purchase price upon approval	-Property must be more than RM1,000,000/- for all property excepted landed properties on Penang Island: RM2,000,000/- -No sales within 3 years
FEDERAL TERRITORY/KUALA LUMPUR	1 month	RM100/-	Property must be more than RM1,000,000/-
JOHOR	2 – 3 months	RM1,000/- on submission, 2% of purchase price upon approval	Property must be more than RM1,000,000/-

LOAN PROCEDURE, TIMELINE FEES & COSTS

Foreign buyers of Malaysian property can apply to Malaysian banks for loans of up to 75% of the market value of the property in exchange for a charge/mortgage on the property. Foreign owners of Malaysian property who are interested to take advantage of more competitive rates from alternative financiers, can re-finance their existing loans (do check to see whether there are penalties for early termination of the existing loan). Malaysian banks typically loan to borrowers below the age of 65 years and limit the period of their loans to this age limit.

Procedure:

• issuance of a letter of offer is approximately 2 weeks from the receipt of all necessary documents*;
• payment of loan fees & stamp duty (**See table for fees & disbursements);
• release of the loan is approximately 1 to 2 months from the signing of the letter of offer;
• loan documents can be ready within 1 week of the letter of instructions from thebank & signing of the loan documents is before a notary public or the Malaysian High Commission if outside Malaysia;
• *Documents required for a loan application:
• photocopy of passport;
• salary slip for the last 3 months if under employment or the bank statement for the last 6 months plus your certificate of incorporation if self employed;
• the latest income tax declaration;
• other forms of investment eg. Savings, bonds. 

SAM CHOONG

MESSRS KHAW CHEOW POH & ASSOCIATES

ADVOCATES & SOLICITORS

SUITE 7-2, 7TH FLOOR, MENARA PENANG GARDEN

NO. 42A, JALAN SULTAN AHMAD SHAH

10050 PENANG, MALAYSIA

TEL: 604-2270777 & 604-2273077

FAX: 604-2274077

E-MAIL: sam@ckylegal.com

Malaysia My Second Home Programme (MM2H)

In a nutshell, MM2H is a long term visa (up to 10 years) which allows the successful applicant, his spouse, children under 21 years and parents above 60 years multiple entry and exit from Malaysia. MM2H is overseen by the Ministry of Tourism in conjunction with the Ministry of Finance (Treasury Department) and the Home Ministry (Immigration Department). It is open to all foreign citizens save for citizens of Israel.

Other benefits:

a) Foreigner purchase of residential property from RM500,000/- and above in Penang state instead of the minimum purchase price of RM1,000,000/- for any property except for landed properties on Penang Island (whereby the threshold is RM2,000,000/-) without having to apply to the Foreign Investment Committee. An application to the State Authority is however still required for purchase by foreigners (Limited purchase of 2 units for each application).

b) Purchase of locally assembled cars/Import of applicant’s car without tax. For instance a locally assembled Honda City (S) normally being sold for RM85,493/- can be purchased by an MM2H visa holder for RM54,935 or a locally assembled BMW520i normally being sold for RM358,800/- can be purchased for RM253,156/-. There is however a restriction that the car cannot be sold for a period of 2 years from purchase.

c) Bring in a foreign maid from countries approved by the immigration policy of Malaysia.

d) Invest or start a business in Malaysia (subject to existing Government policies, regulations and guidelines which are in force for the relevant sectors)

e) Qualified MM2H participants aged 50 and above with specialized skills and expertise that are required in the critical sectors of the economy, are allowed to work not more than 20 hours per week.(eg. Doctor)

f) Foreign spouses of Malaysian nationals are eligible to apply for MM2H, subject to the terms and conditions of the MM2H programme.

g) Employment Pass holders who wish to participate in the MM2H programme can only submit their MM2H application 3 months before the expiry of the Employment Pass.

Note:

The MM2H applicant does not have to be present in Malaysia on submission of the application although he (and his spouse & dependants, where applicable) needs to be present with his passport upon approval for endorsement on to his passport at the Immigration Department.

1st DECEMBER 2014

PROCEDURE

First stage (Submission):

We will provide you with a list of items required and forms to be filled in and signed. Upon receipt of the same from you along with the initial fees, we will then submit these to the Ministry of Tourism on your behalf.

	No. required	Document/Particulars required
i)	5	Coloured passport size photographs each of the applicant, dependants and spouse (where applicable).
ii)	1	Copy of Passport/Travel documents (all pages) with certification on the pages with personal particulars of the applicant’s, dependant’s and spouse’s (where applicable). Note: Copy of previous passport is required if applicant/ dependent (s) has renew his/her passport within the last 12 months.
iii)	1	Certified true copy of the marriage & birth certificates of dependants (where applicable).
iv)	1	Certified true copy of the applicant’s latest 3 month’s bank statement/other related financial documents to show financial capacity during stay in Malaysia (each month credit balance of minimum RM500,000/- (in liquid assets) for aged below 50yrs and RM350,000/- (in liquid assets) for aged above 50yrs).
v)	1	Certified true copy of the applicant’s bank account statements that shows the latest 3 months deposit for monthly income (either from salary / rental / interest earned / shares / etc) or government approved pensions into the applicant’s bank account. (must show minimum of RM10,000/- per month).
vi)	1	Letter of application stating how the applicant intends to financially support his stay, why and with whom do you intend to reside in Malaysia.
vii)	1	Resume which include the following information; * Academic qualification * Working experiences * Skills or expertise acquired.
viii)	2	Application form for the MM2 duly filled in (with our assistance) and signed. Note: Applicant and all the dependents have to complete the Form individually.
x)	1	Authorization letter from applicant to Malaysian My Second Home Centre to verify the financial documents with the relevant financial institutions.
xi)	1	Self declaration on your /dependants health conditions. (Form RB I).
xii)	1	Letter of Good Conduct from your relevant government agency; i) The police authority of the applicant’s home country; OR ii) The Embassy of the applicant’s home country based in Malaysia provided that the LGC issued by the Embassy has made a reference to the respective police authority and the LGC must be attested by the Embassy.
xiii)	3	IM.12 Form (1 original copy & 2 photostated copies). We will fill up for you and signed on behalf of you as your sponsor. Note: Applicant and all the dependents have to complete the Form individually

NOTE:

All copies must be certified TRUE COPIES OF ORIGINAL DOCUMENTS by EMBASSY /HIGH COMMISSION / SOLICITOR/ JUSTICE OF PEACE / NOTARY PUBLIC / COMMISIONER FOR OATHS / GOVERNMENT OFFICIAL.

• Where original documents are not in English, translation must be done by a qualified translator.

• Dependent (s) refer to spouse and children aged below 21 years old (maximum 6 months before reaching 21 years old) and not married, parent(s) aged 60 years old and above.

• For applicants with children nearing the age 21, they must submit their applications at least 3 months before their children reaches the age 21.

Second Stage (Conditional Approval)

Upon the receipt of the approval letter from the Ministry [estimated to be 90 working days after submission of the application in the First Stage (provided the documentation is completed)] we will forward you a copy of the said letter and provide you with a list of items to be fulfilled within 6 months of the date of the Ministry’s letter of approval. Upon fulfillment of the items below, we will then accompany the applicant to have his passport chopped.

	Items to be done within 6 months of the date of the Ministry’s letter of approval:
i	Approved participants and their dependants must possess a medical insurance that is valid in Malaysia (Foreign insurance eg. BUPA are valid provided the term of the insurance extends to the applicants stay in Malaysia) except those who face difficulty in obtaining a medical insurance due to their age or medical condition
ii	All applicants and their dependants are required to submit a medical report to be done in Malaysia
iii	Aged Below 50 years Open a fixed deposit account of RM300,000/- . After a period of one year, the participant can withdraw up to RM150,000/- for approved expenses relating to house purchase, education for children in Malaysia and medical purposes. Must maintain a minimum balance of RM150,000/- from second year onwards and throughout stay in Malaysia under this programme. Approved participants who have purchased and owned property which were bought at RM1 million and above in Malaysia may comply with the basic fixed deposit requirement of RM150,000/-. This amount may not be withdrawn until the participant decides to terminate his participation in MM2Hprogramme. (Refer to below *Conditions) Aged 50 years and above Open a fixed deposit account of RM150,000/- or show proof of government approved pension funds of RM10,000-00 per month; After a period of one year, participant who fulfils the fixed deposit criteria can withdraw up to RM50,000/- for approved expenses relating to house purchase, education for children in Malaysia and medical purposes. Participant must maintain a minimum balance of RM100,000/- from the second year onwards and throughout stay in Malaysia under this programme. Approved participants who have purchased and owned property which were bought at RM1 million and above in Malaysia may comply with the basic fixed deposit requirement of RM100,000/-. This amount may not be withdrawn until the participant decides to terminate his participation in MM2H programme. (Refer to below *Conditions)
iv.	Applicant to be present in Malaysia with passport for having approval chopped onto his passport at the Immigration department

* Conditions:

a) The property has been fully paid and ownership documents such as title have already been issued. This amount does not include legal fees, transfer fees, commissions and any other related payments.

b) The property must cost a minimum of RM1 million OR

c) Several properties totaling RM1 million and above can be accumulated for this exemption.

The following documents are required to be submitted for the financial exemption:

* Certified copy of Sale and Purchase Agreement

* Certified copy of Transfer of Ownership / Transfer of Deeds (if applicable)

* Proof of mortgage loan payment (if applicable)

* Proof of Quit Rent / Assessment Rate Bill payment (if applicable)

* Certified copy of Title Deed / Land Title (if applicable)

The supporting documents must be submitted together with the new application to Malaysia My second Home Centre

Fees

Social Visit Pass – RM90.00 per year. (Maximum 10yrs subject to your passport’s validity)

Benefits:-

Each participant of MM2H is allowed to bring in one of his personal car OR to purchase one new locally - assembled car without the need to pay import duty, duty and sales tax.

I. Import Car:-

Applicant to IMPORT a motorcar from the participant’s country must be forwarded to the Ministry of Finance within a period of six (6) months from the endorsement date of Malaysia My Second Home (MM2H) social visit pass.

Conditions:-

The participant should be the owner of the motorcar for at least 6 months prior to obtaining the MM2H visa, as evidence in the motorcar registration document.

2. Purchase Car:-

An applicant to PURCHASE a new motorcar made or assembled in Malaysia must be forwarded to the Ministry of Finance within a period of one (1) year from the endorsement date of Malaysia My Second Home (MM2H) social visit pass.

Note:-

1. Applicant must have obtained MM2H visa before placing order/import car to enjoy tax exemptions.
2. Do not make an outright purchase of the motorcar before obtaining approval for tax/duty exemption from the Ministry of Finance. Hence 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 purchase car after 2 years from purchase.
   

PROCEDURE FOR CAR PURCHASE

Applicant must have obtained MM2H before placing order within 1 year from the endorsement date of Malaysia My Second Home (MM2H) Social Visit Pass.

STAGE:-

1) SUBMIT FOR APPROVAL:- (2-3 weeks to obtain)

I)    FORM MM2H/07 (1) (Applicant)

II)  A certified true copy of letter of approval from the Immigration Department.

III) A certified true copy of the international passport of;-

- the page with personal particulars; and

- the page with multiple entry visa as well as the word MM2H Programme

IV) Quotation for the motorcar

IV) Motorcar purchase order form

2) SUBMIT FOR APPROVAL CUSTOMS CLEARANCE;-

Upon securing approval at Stage 1, the successful applicant has to furnish the car company, i.e. the Mercedes/BMW headquarter the approval letter to obtain the details of the car purchased, i.e. a specific motorcar allocated for him, chassis number and engine number and to be returned to the Ministry of Finance.

3) CAR COMPANY TO PROCESS & DELIVER YOUR CAR TO YOU

HERE ARE A LIST OF FREQUENTLY ASKED QUESTIONS. SHOULD YOU REQUIRE FURTHER INFORMATION, PLEASE DO CONTACT US.

Can successful applicants be allowed to work in Malaysia?

Qualified MM2H participants aged 50 and above with specialized skills and expertise that are required in the critical sectors of the economy, are allowed to work not more than 20 hours per week.

What would the status of my Visit Pass be?

Successful applicant will be issued with a Social Visit Pass and a Multiple Entry Visa for up to 10 years.

Do I need to be in Malaysia when applying for a renewal?

Submission of applications can be done on your behalf for a fee although applicants (including spouse and dependants where applicable) must be in Malaysia at the Immigration Department for their passport to be endorsed.

How long are my children permitted to stay in Malaysia once approved under this program?

All children are permitted to stay in Malaysia under MM2 until 21 years old.

What is the minimum requirement to stay or visit Malaysia per annum?

There is no need for minimum stay or visit to Malaysia per year.

I would like to import my own car to Malaysia and invest in some properties. How do I go about it and what are the regulations?

For a separate fee, we will assist in the application to the Treasury department to import your existing car into Malaysia free of excise and import duties. Please do not hesitate to contact us with your specific questions on the procedures, costs and timelines for the purchase of property.

What type of Insurance policies & medical check-ups are required?

The insurance policy (whether by a foreign or Malaysian insurer) should insure you against illness, accident or death during your stay in Malaysia. We can point you to the appropriate insurer and doctor for a medical check-up.

Is the Visa on an annual renewal? If yes, what is the procedure and cost per application?

The Visa can either be on an annual or 10 year period. In the event that your visa or passport expires, we can assist in renewing your visa/endorsement on to your new passport for a nominal fee.

Is our income generated from Oversea or outside Malaysia subjected to Malaysia Income Tax?

Generally, all income generated outside Malaysia is free from Malaysian Tax although this is not our area of expertise and you are advised to seek the advice of tax consultants. Again, we can point you in the right direction should you require this advice.

Can I withdraw my fixed deposit any time during my stay in Malaysia?

Some banks allow periodical withdrawals of interest earned on your Fixed Deposit. This is subject to the bank's policy and negotiation at the time of opening your account with the bank concerned. Please refer to banking portal www.bankinginfo.com.my for current rates and terms.

Can I place the fixed deposit in a Malaysian bank located in my country?

No. The fixed deposit account must be opened in any Malaysian bank or financial institution located in Malaysia.

Am I allowed to withdraw my fixed deposit for a few months and then topped it back later?

No. Participants are required to place their fixed deposits on annual auto renewal basis.

When can I withdraw my fixed deposit?

After a period of one year, the participant may withdraw his/her fixed deposit for approved expenses relating to house purchase, education for children in Malaysia and medical purposes OR when he/she decides to terminate his/her stay in Malaysia by first informing the Ministry of Tourism of his/her intention at Malaysia My Second Home Centre. Participants can apply to withdraw part of their fixed deposit for emergency cases such as medical purposes, etc. with prior approval of the Ministry of Tourism.

Do kindergarten level child need a Student Visa to attend kindergarten here?

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.

If my children are already married and want to study in Malaysia with their husband, do they need to pay the fixed deposit?

Not necessary. They can apply for a Student Visa once they have obtained places of study in Malaysia

Do the participants have any special entitlements?

All participants are allowed to purchase residential properties at the minimum purchase price for foreigners established by the respective state governments. The current minimum price (January 2010) is RM500,000.00 for most states.

Can I purchase a house for residential purpose and a shop lot to be rented out?

No, you are only allowed to purchase residential properties.

Do I have to pay the yearly assessment and quit rent for my houses like the locals?

Yes.

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?

No. Participants may transfer their property to their next-of-kin provided they have made a will to this effect. In the event of lack of documentation, the next-of-kin may claim the inheritance upon proof of identity and kinship.

Can I keep pets in my condominium?

The By-laws of the Strata Title Act state that a parcel proprietor is not allowed to keep any animal in his parcel or on the common property which may cause annoyance to any other proprietor.

Is a participant who buys a second-hand local car eligible for tax exemptions?

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. As such tax exemptions do not arise.

If I had a car accident and as a result I need to change the car, do I have to pay back the tax exemptions?

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 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 a car on a one time basis.

When can I sell the car, which has been given all the tax exemptions?

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.

What kind of taxes are the participants of this programme normally subjected to?

Income tax is imposed on income earned from investments in local companies and local share market. Please refer to www.hasil.gov.my for more details on the tax structure.

Is the interest for their fixed deposit taxable? Some say it is taxable, other it is not taxable. If the deposit amount exceeds RM100, 000.00 OR if the deposit period is one year. What is the exact regulation?

Interest earned by an individual from 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 a maximum of RM100,000.00.

Is income remitted from abroad taxable?

Before year of assessment 2004 income remitted from abroad to Malaysia (apart from pension) is subject to tax. However, from year of assessment 2004 all income remitted from abroad is not subject to tax.

Does the participant have to submit any personal tax declaration to the Income Tax Department of Malaysia, like Malaysians have to?

Yes.

If the participants have to submit income tax return to the Income Tax department, are they entitled to any exemptions under the programme?

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.

I am a German in which 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 Malaysia government. Is this true?

Under this Programme, pension remitted to Malaysia is exempted from tax.

FEES & COSTS

Application for MM2H Pass:

Fees: RM8,000/- (for main applicant, subsequent dependents RM500/- per person) [Prior to submission: upfront RM4,000/-, balance on obtaining approval depending on nationality]

Telephone, courier & miscellaneous charges: RM300/-

Travel: RM500/-

Social Visit Pass: RM90/year

Application for Treasury Approval:

Fees: RM3,000/-

Travel & Misc: RM150/-

Application for Maid Approval:

Fees: RM3,500/-

Travel & Misc: RM50/-

Journey Performed Visa (for countries with no visa treaty with Malaysia e.g. India and Non-Commonwealth countries) – RM500 /-

RESUME

Name :

Passport No :

Address :

Place of Birth :

Date of Birth :

Age :

Nationality :

Marital Status:

EDUCATION

WORKING EXPERIENCE

SKILL

[NOTES TO THE COVERING LETTER]

[Your address]

Date:

Malaysia My Second Home Centre (MM2H)

Ministry of Tourism Malaysia

Level 23 B, Menara Dato Onn

Putra World Trade Centre

60695 Kuala Lumpur, Malaysia

Dear Sirs,

Application to join Malaysia My Second Home Programme

I refer to the above.

[Tell the Ministry of tourism:

- why you like to participate in the MM2H programme/why you like Malaysia;

- who you will be bringing with you to Malaysia under the MM2H programme (eg. Spouse and/or dependants under 18yrs)

- how you intend to finance yourself (state & show evidence your source of finance) and your dependants during your stay]

Yours faithfully,

[SAMPLE COVERING LETTER]

[Your address]

Date:

Malaysia My Second Home Centre (MM2H)

Ministry of Tourism and Culture Malaysia

Level 1, No. 2, Tower 1,

Jalan P5/6, Precinct 5,

62200 Putrajaya,

Malaysia

Dear Sirs,

Application to join Malaysia My Second Home Programme

I honourably refer to the above mentioned subject.

I am a _______________[** nationality] born on _____________[**date] in ________________[**country of birth]. After I finished my education I worked as a ___________________[**occupation] in different companies. In __________[**year started work] after further education in _________[**type of degree/diploma] I was offered a job as ________________ [**occupation] at the Dept of__________[**state department] at __________[**state name of present company/government ministry etc] in _______________[**name of country] where I’ve been working for the past ______[**number of years] years. As my retirement is approaching soon, I’m very excited in joining the MM2H Programme with my dear wife [**and (number of children under 18yrs if applicable) children]. When I visited Malaysia for the first time in _____[**year/if applicable] it was clear that if I ever would get the chance to stay there for good after my retirement, I wouldn’t hesitate a second. Meanwhile, I have been in Malaysia for more than ___[**number of occasions] times and it would be really a dream come true if I would be accepted in this programme. I especially appreciate the great food, the friendly, helpful people and the high standard of living. My stay in Malaysia would be fully supported with my savings, the pension from my employer, the old age insurance (AHV) and last but not least I’m owning a fully paid condominium at ________________[**address] in Penang/Kuala Lumpur (purchase price of RM……..)[**amend as appropriate]. As for the financial criteria requirement, I would comply with the fixed deposit of RM150,000.00/RM300,000.00[**amend as appropriate]

Yours faithfully,

Source: 

Messrs KHAW CHEOW POH & ASSOCIATES

Advocates & Solicitors