KUALA LUMPUR: The Malaysia My Second Home (MM2H) residency visa scheme is losing its appeal due to newly imposed stringent regulations, says Kepong member of parliament Lim Lip Eng.
"Agencies processing MM2H applications report a dramatic decline in interest, with a 90 per cent drop in prospective applicants," he said.
He said the scheme had to strike a balance between attracting high-net-worth individuals and providing flexibility to make Malaysia a desirable retirement destination.
The increase of bank deposits, requirement for mandatory property investment, and property purchases that must be held for at least 10 years, among others, all make the scheme less appealing compared to more flexible options in neighbouring countries, he said.
"While the introduction of mandatory property investments can be seen as a positive step to boost the real estate sector, the requirement to hold these properties for at least 10 years is proving to be a significant deterrent.
"Reassessing the 10-year holding requirement could be a crucial step in revitalising interest," he said in a statement.
MM2H applicants are categorised into three tiers — Platinum, Gold and Silver — based on specific criteria and conditions.
https://www.nst.com.my/news/nation/2024/06/1063943/new-mm2h-participants...
The general conditions for all three categories include being open to foreigners from countries with diplomatic relations with Malaysia, being at least 25 years old, and staying in Malaysia for at least 90 cumulative days a year.
Detailed criteria and application requirements for the Platinum, Gold and Silver categories are as follows: the Platinum category requires a fixed deposit of US$1 million, the Gold category requires US$500,000, and the Silver category requires US$150,000.
Lim said under the previous MM2H scheme, applicants enjoyed greater flexibility with lower financial thresholds.
"The scheme required bank deposits of RM300,000 for those below 50 and RM150,000 for those above, without a mandatory property purchase.
"This approach attracted a diverse group of retirees and expatriates, contributing RM58 billion to the local economy over 17 years. Although the new scheme's focus on high-net-worth individuals represents a policy shift, its stringent requirements have significantly narrowed the applicant pool," he added.
He said economists had also argued that the new MM2H rules offered limited economic benefits due to their restrictive nature.
"The compulsory property purchases are unlikely to boost the housing market as intended and may leave many units unsold or unrented, as highlighted by an economic research house ," he added.