The Home Minister has defended the stricter requirements for a long-term residency programme for foreigners. He expressed it netted nearly RM1.0 billion. The Malaysia My Second Home (MM2H) programme has had its financial requirements tightened and the country has attracted some 800 “quality” applicants.
In April, FMT reported that the MM2H programme saw a 90% drop in the number of applicants because of tougher conditions imposed. Applicants are now required to have permanent savings of at least RM1 million and liquid assets of at least RM1.5 million. Previously, they only needed savings of between RM300,000 and RM500,000. They must now also show an offshore income of at least RM40,000 a month, up from RM10,000. Why not go under the Premium Visa Programme (PVP) which has similar requirements (or even better features) and you could stay for 20 years (option of another 20 years) instead of 5 years under MM2H?
Let’s look with a bit more in-depth at the recent statement and numbers (This was reviewed by Andy Davison on ExpatGo). The Minister said 375 MM2H visas were approved under the revised programme. This was since it was launched some 20 months ago. During its peak time in 2017 and 2018 the programme generated some 6,000 approvals a year so during a 20-month period, it could have theoretically approved over 9,000 applicants had the requirements remained the same.
The spending contribution of those 9,000 people would have far exceeded that of the 375 approved under the new version of MM2H. The main contribution under MM2H has always come from the participants’ annual spending and the purchase of capital items like homes and cars.
Research among English-speaking MM2H visa holders who came from over 30 different countries was conducted by ExpatGo. Their average monthly spend was a little over RM10,000 a month and about 60 percent of them purchased houses and even more acquired local cars. That was a valuable contribution to the country. They were also overwhelmingly positive about the programme and Malaysia.
The Home Minister is looking only at the data on the positive side; if 375 new applications were approved but 2,000 participants have left the programme, there is a huge net loss. The Minister was also quoted as saying under the former programme some applicants were actually spies. Raising the income and fixed deposit requirements cannot reduce the risk of “spies” being approved. Vetting applicants is a security function, not a financial one.
Several countries have identified the benefits of attracting foreigners with reasonable incomes and offer attractive residency programmes with far less stringent conditions. Not only have people left Malaysia and gone to these countries (Thailand, Indonesia or Vietnam), but many potential applicants have selected other countries because they were considered not welcome anymore. The well-respected annual index of ‘best places to retire’ published by International Living dropped Malaysia from the top of the list in Asia after the new rules were announced.
According to the last Home Minister, some Malaysians were concerned about large numbers of foreigners moving into the country. Hence, the cap on the total number of approved applicants to one percent of the population. Approving some 6,000 people a year could hardly be that disruptive, especially when the Malaysian population has been increasing by roughly 500,000 a year.
If the Malaysian government wants to attract foreigners to the country, then please re-do the MM2H. Otherwise, the PVIP is a better programme or for that matter the one from Sarawak. Perhaps, the Minister may want to give each state the ability to design their own “MM2H” programme. And if the ringgit is depreciating, the Minister could make his small contribution and improve matters by a well crafted MM2H that brings in FDI. If not, he is proven to be no better than the previous Home Minister!
References:
New MM2H rules paying dividends, say Home Minister, Pradeep Nambiar, FMT,
7 June 2023
Minister claims new MM2H programme working well. We don’t agree, Andy Davison, ExpatGo, 8 June 2023
No comments:
Post a Comment