The new Malaysia My Second Home (MM2H) conditions will dent the country’s revenues, frighten off investors and affect the country’s image overseas, Johor Ruler Sultan Ibrahim Sultan Iskandar warned.
Stressing that the government should be more compassionate and lenient towards foreigners keen on settling down in Malaysia, he said foreigners would lose confidence in Malaysia if the government keeps “shifting the goalposts.”
“This is not the right time to raise fees,” he said in a Facebook post.
“When we continue to flip-flop on conditions, how can we promote Malaysia as an investment destination?
“Drastic changes like this will tarnish our image and will make us a laughing stock of the world,” he warned.
Calling the recent revisions “very negative”, he added that it was “ridiculous” to subject even existing MM2H pass holders to the new conditions, and predicted that they would now leave the country.
“The review was supposed to make things better. But the new criteria are only going to drive investors and tourists away,” he said.
Sultan Ibrahim said the government should also consider reverting to the original MM2H conditions as they have been effective in promoting Malaysia as an international retirement destination.
After being frozen last year for “review and further improvements”, the home ministry announced on Aug 11 that the country’s long-term visa programme for foreigners would be back online in October.
Established in 2002, MM2H allowed foreigners to stay in Malaysia for 10 years, after which period it is renewable. The duration has now been reduced to five years, which was one of the 10 changes announced by the home ministry earlier this month.
Among the other changes are an increase in an applicant’s compulsory fixed deposits (FD) in local banks from between RM150,000 and RM300,000 to RM1 million, and an increase in offshore monthly income from RM10,000 to RM40,000.
Applicants would also need to have at least RM1.5 million in liquid assets, compared with between RM300,000 and RM500,000 previously – conditions which stakeholders agree would deter potential applicants.
Successful applicants, who numbered nearly 39,000 as of last year, have brought in RM40.6 billion throughout the 19 years of the programme, mostly from property purchases and compulsory FDs in local banks.
The programme’s participants spent an estimated RM4.9 billion in 2017 and RM4.4 billion in 2018 on property, rent, vehicles and immigration fees. Among the other sectors they have contributed to are medical, education, travel, hospitality, retail, F&B (food and beverage) and entertainment.
Last week, the Malaysian International Chamber of Commerce and Industry (MICCI) said MM2H residents were “hard pressed” to meet the new rules, warning of a significant outflow of funds sparked by existing participants opting out.
Donal Crotty, the general manager of the Irish Chamber of Commerce in Malaysia, also last week labelled the new rules “disastrous” for the country and called for a review before October, when they are due to come into effect.
This article originally appeared on Free Malaysia Today.