Drop latest changes to MM2H scheme

Give the foreign retirees a break and spare the local economy

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The MM2H programme was launched in 2002 - MM2H.CO

Much controversy has arisen over the new requirements for the Malaysia My Second Home (MM2H) programme.

The new requirements will see the compulsory fixed deposit in local banks being raised to RM1m. It was previously RM150,000 for MM2H applicants aged 50 and above and RM300,000 for those below 50.

New applicants are also required to show a minimum offshore monthly income of RM40,000 (previously RM10,000), declared liquid assets of RM1.5m (previously RM500,000) and a minimum 90-day stay in the country every year. The five-year pass may be renewed for another five years.

Home Minister Hamzah Zainudin said the stringent new regulations were a matter of national security. The authorities would review existing visa holders on a case-by-case basis with a view of protecting national security.

But what guarantee is there that potential MM2H applicants flushed with cash will not use illicit funds to meet the new requirements? Who will know if the funds they are bringing into the country are clean?

I would rather trust ordinary retirees with a clean record than those with questionable backgrounds.

While the minister may have a justified reason for tightening the MM2H programme, perhaps it could take the form of attaching explicit conditions to the approvals. For example, if a visa holder is involved in undesirable activities in the country or if the government finds out that the holder has a criminal record in his or her home country, then the approval can be revoked at once. Further, if the government has information that the visa holder is a threat to national security, it could cancel the approval immediately.

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As it stands, ordinary foreign retirees will probably look to other countries in the region for their post-retirement homes. When I was in Can Tho, Vietnam in 2019, I came across many Australians who had retired there. Obviously, they found the conditions there favourable despite the language barrier.

Just compare our MM2H programme with what neighbouring countries are offering.

In the Philippines, a deposit of just $10,000 (RM42,000) is required, and this can be used to buy property. It also allows unlimited stay in the country.

Thailand also draws foreign retirees with an annual renewable visa: they need to have a deposit of just 800,000 baht (RM103,000) in any local bank. Retirees must also have enough funds to cover their expenses during their stay.

For all our shortcomings, Malaysia has many plus points for foreign retirees: a conducive climate, the absence of major natural disasters, attractive holiday resorts, affordable travel, an enormous variety of cuisine and an affordable cost of living. The crime rate may be a concern, but it has not got out of hand.

Malaysia has faced many challenges from the Covid pandemic. Low fixed deposit interest rates have made life difficult for local retirees. Many Malaysians are now struggling with low fixed deposit rates of 1% – 2% per annum only (that is, if they have any savings left). Such paltry interest rates have also hit foreigners.

Not long ago, we were passionately promoting the MM2H programme overseas, encouraging foreigners to retire in Malaysia. Why did the government suddenly change its policy? What happens to the nation’s credibility if we suddenly implement such a drastic change? What is the driving force behind this change?

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Do we want to drive away foreign retirees who wish to spend their golden years in our country? What will the new requirements mean for MM2H retirees who are already living in Malaysia? When their visas come up for renewal, will most of them be forced to leave the country because of this change?

Many of them have already bought properties in our country. If they are forced to leave the country, they will have to sell these properties. But they will have a tough time selling when the property market has slumped.

If these foreigners now have to leave Malaysia, the outflow of funds could worsen our already flagging economy. Do we want this to happen? Even the Sultan of Johor has slammed the change, warning that it would hit the local economy. He said he would raise the matter with the prime minister.

Many of the MM2H foreign retirees have integrated well into our society. Most are not a social menace. Some have lived in Malaysia for a long time, and many actually feel more comfortable here than in their home countries.

For them, this is their home away from home. Some of them are married to locals and can speak the national language fairly well, even using local slang and accents. They are as ‘Malaysian’ as we are.

Malaysians are renowned for their warm-heartedness, friendliness, and hospitality. We have a rich history of welcoming foreigners from all corners of the globe. During my stints and visits abroad, many foreigners often highlighted these rare traits of ours, which we should treasure.

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So, do we want our international image to be dented? Definitely not.

The only practical option is for the government to rescind the latest MM2H changes to protect our country’s global image.

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Benedict Lopez was director of the Malaysian Investment Development Authority in Stockholm and economics counsellor at the Malaysian embassy there in 2010-2014. He covered all five Nordic countries in the course of his work. A pragmatic optimist and now an Aliran member, he believes Malaysia can provide its people with the same benefits and privileges found in the Nordic countries - not a far-fetched dream but one that he hopes will be realised in his lifetime
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