columbine

Thank You, Merlinman for the latest report.
With the increased liquid asset requirement raised to RM600k seems to me the govt wants solid proof of one's cash availability and the FD raised to RM500k also indicates to me the govt wants the lump sum cash in the country.
Good part is the exemption of the monthly RM10k for over 60s.

RedApe

Which is useless for those who are on government, investment (in US the 401K or Roth IRA), or Social Security type plans. Few of these folks have money in liquid assets, and unless they sold their house they would not have it.

They will exclude a large number of retirees (over 60's) who were able to scrape together enough to demonstrate RM350K in liquid assets (now they must show almost double that ~ US$154,000) and were willing to take RM150K of that and place it in a Malaysian (illiquid) Fixed account. Now they must place almost THREE Times that into the fixed account (~US$130,000).

It might benefit a few very wealthy over-60's of independent means..."quality not quantity".

But mind you, NO ONE that can meet these new requirements were prevented from applying under the old program. All it does in reality is hone away the number of qualified applicants. It's a bit like saying "we're increasing prices for the football tickets because the waits at the concession stands are too long and or employees are working too hard".

I think that whoever is in charge of the program believes that because they rank so high in the Asian "retirement ranking" (although this was back in 2016...not last year) that they can "charge more". But that ranking was largely based on the AFFORDABILITY of the program, the size of the expat retiree community, and some perks (like the now deleted vehicle tax benefit). I bet the ranking plummets as a result of the changes.

Of course, there's always the "back door" (Sarawak) which will hopefully maintain (or even liberalize) their requirements. Maybe Sabah will also maintain the old standards. I'll need to visit their immigration/tourism in an upcoming visit.

rogerluli

Isn't it funny how different people are...I can meet the RM 10K government income but I am never going to pull everything out of investments just to show CASH and then invest a big chunk in a Malaysian bank earning zippadeedodah...

SushiFan

Is the 4% interest rate on a Malaysian Fixed Deposit account so much worse compared to where you are?

columbine

Some one who attended the E&O tea time meeting posted in the Fbk MM2H that half the FD can be withdrawn for medical, property purchase and kids schooling. Which means RM250k would still be in FD. With many banks raising the limit to qualify for Premium banking then it might be a disadvantage for interest rate negotiation if one does not have a Premium banking account, wouldn't it?

We are fortunate to get our MM2H in the early days 14 years ago with Conditions/Requirements like Sarawak. But, the test will come when and if I need to re-apply for myself and whether the govt will raised further the liquid asset and FD requirements.
This drastic increase will be the Biggest jump in both requirements. It's also mentioned in Fbk that the British high com is going to try to do some lobbying. Maybe the Brits here would be able to update us when there are new developments on the lobbying.

RedApe

Well investments can be savings (which is generally abysmal in the US and Europe) or the stock-market (my "conservative" 401K's were, until recently gaining on the order of 12%/annum). But if you reach into those you face massive tax disadvantages. That's recorded as $130,000 in taxable income which even under Trump's tax realignment would be quite a thumping vs. taking it out in US$10000 installments. (virtually tax-free).

Plus there's the risk of putting everything into a Malaysian bank.

RedApe

For over 50's the amount (under the old rules) you had to maintain (after withdrawals) was RM100,000. The amount you must maintain in the deposit is UP RM150,000 to RM250,000.

Plus there is less opportunity for withdrawals now that they've done away with the vehicle purchase deduction. Over 50's likely don't have children attending schools here...so that leaves the medical and property purchase withdrawals. I guess I gotta hope I get very sick ;-)

BTW I have suggested to the CM office in Sarawak that they broaden the scope of withdrawals to include a whole range of dDOMESTIC (meaning Sarawak) purchases- from rent, housekeeping, home improvement, domestic tourism, club memberships, adult education (fitness classes, language classes), restaurants, event tickets, etc. This would likely have a far greater direct benefit on the local economy than an investment account that might go to loans in palm-oil ventures in Brazil or building investments in Australia. Theoretically one would want the Fixed Account to be fully spent in the "host country" rather than walk out (with interest) at the end of the retirees stay (or claimed by their next-of-kin).

SushiFan

I didn't take into account that you are subject to the US tax system. That will influence your options and selection of your best choice substantially.

eCdD

We should not compare the stock market with FDs, two totally different worlds. And taking about US tax law, well there are about 10 MM2H participants from the US every year, so not worth to think one second about them for the Ministry.

I am very happy with the interest rates in MY, because I don´t want to put all my money in the stock markets and there are not many countries with a quite stable currency where you can get a decent interest rate.

Actually when I was allowed to put out 150k of the 300k FD, I did not put it out, but kept two 150k FDs, one earmarked, one not. With the 4,2% interest rates, the profit is RM 12600 which allows me to enjoy 2520 Laksas this year

But I have to say that FD rates in China are better and I actually have more trust in the CNY than in the MYR.

RedApe

Not making the comparison except that in order to obtain the money from the fixed account to place the increased amounts into a FD then one might have to liquidate higher yield stock to place it into a lower yield FD. I have no idea if other countries have investment plans like the US IRA/401K systems. But if they tax large withdrawals from these funds as income, it's the same effect. I doubt that the Ministry even considered this issue. How does the UK and other European nations do it? The Japanese? The Chinese? Australia? Or are there no long-term supplementary tax-deferred accounts that can be invested in to supplement any government pension program?

There certainly could be a benefit in taking ones SAVINGS and placing it into a Malaysian Fixed Account. I've actually considered doing that...independent of the MM2H. Of course, In my case it would be voluntary, not compulsory (I'm on the pension option). And I could decide the amount that I could afford to place in "cold storage" for a decade.

It may be that few people have the wherewithal to place RM500,000 into an account that they cannot withdraw from (except for limited purposes) for a decade.

eCdD

I have no idea what the US IRA/401K is, but in some European countries there is some kind of "tax friendly supplement to government pension program". But it is only suitable if you are sure you will live the rest of your life in the EU, if you are leaving you have to pay all the tax-deferred amount back - immediately! In China this kind of thing does not exist, the tax system is very simple (but efficiant) as is the government pension system.

stepen

Where have you found good FD rates in China? I've only found around 1.75% for 1 year.
RMB Deposit Rate－Financial Information－ICBC China

Deposit Rates | HSBC Bank (China)

WiredTight

As with any gov't policy, changes can happen at anytime. As it stands right now, I don't see the Proposed changes as a reason to change my MM2H status.
But... If in the future their was other changes (tax FD, yearly fee's, etc...); One single change won't push me over the limit, but a succession of changes might be enough to start thinking about looking else where.

RedApe

Back in July of last year the Minister of Tourism RMohamed Nazri Abdul Aziz was also talking about some of the fees going up as well. He spoke about the FD "possibly" going up to RM500K and the Liquid Assets going up to RM600K. The elimination the Over 60 required monthly income was also mentioned as a possible change being considered, along with the allowances for spousal parents and extension of parental visas to 12 months. All of those have, in fact, been authorized, it seems.

But he also mentioned proposals increasing the annual Visa fee from RM90 to RM270, and a new RM1000 application fee to MM2H, and a RM150 fee to immigration. Anyone know if those changes will also be introduced. That's almost RM3000 in additional fees that they were considering. Are those out the window?

eCdD

These FD rates are set by the government and every bank has to follow. But actually it is the same like in MY, it is all about promotions.

One example: 华夏银行-正在发售的理财产品信息

ICBC had 5,6% for 12 months last February when I was around.

The best offers are never nationwide, but you can see the signboards when you pass. Our our China FDs are all in the range 5,6 to 6,2% for 12 months. Depending on the bank it can be done online.