global investment competition
Malaysia’s pursuit of wealthy investors is part of a larger global race among countries to secure foreign capital and talent. In 2022, global foreign direct investment (FDI) flows reached US$ 1.3 trillion. In the case of Malaysia in particular, FDI accounted for 61.7% of the total investments approved in the country last year, or RM163.3 billion (US$34.8 billion).
The infusion of wealth and capital from wealthy investors could have a transformative impact on Malaysia’s economy. These investors bring not only financial power, but also expertise, networks, and contacts that can revitalize local industries.
One of the key strategies Malaysia has implemented to attract overseas retirees and wealthy investors is the Malaysia My Second Home Program (MM2H).
Launched in 2002, the program grants eligible participants a multi-entry social visit pass, allowing them to stay in Malaysia for up to 10 years with the option of renewal. Between 2002 and his 2019, nearly 50,000 foreigners were approved under his MM2H program.
However, surprisingly, the government introduced stricter requirements in 2021, reducing the uptake of the scheme. This includes increasing the minimum monthly income to RM40,000 for those four times his salary and extending the required period of physical stay to 90 days a year.
That wasn’t all. What was even more troubling was that the new bank deposit requirement was increased from RM1 million to RM300,000, up from RM150,000 previously, and the liquid assets requirement was increased to RM150,000 (previously RM350,000). (increased from RM500,000 to RM500,000).
The revised MM2H appeared to be an attempt to deter potential applicants, as other countries in the region have less stringent standards. Since restrictions were tightened in 2021, the number of applicants has fallen by 90%.
The second program to attract wealthy foreigners is the Premium Visa Program (PVIP). This program has less stringent requirements than MM2H’s program, requiring applicants to open a local fixed deposit account of approximately RM1 million.
PVIP differs from MM2H in that applicants can conduct business and seek employment. There is no minimum length of stay in Malaysia and you do not need to provide proof of liquid assets.
At first glance, one wonders why a country trying to attract wealthy investors would need to raise the threshold. And why should we put our country in a less competitive position than other countries in the region?
Calls for the relaxation of MM2H regulations have been raised from all quarters, and the Sultan of Johor has repeatedly urged the government to reconsider the conditions. In April, the government confirmed it would review the program’s criteria.
