Sabah MM2H

Old Apr 29th 2019, 1:17 pm
  #31  
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Default Re: Sabah MM2H

This is way off topic. And perhaps the moderator would want to create a new thread for it?

Yes, you pay taxes on your pension (the argument is that was untaxed while you were working); Social Security is taxed but only if you make above a certain amount of other income and then at a lower rate than Earned Income would be); Medicare is not taxed...but you cannot receive it unless you live or return to the US and to get full coverage you must continue to pay a Premium. THIS latter is the most ridiculous, irrational and unjustified aspect...as the Medicare System (which covers about 20% of a seniors healthcare costs) would actually save money by subsidizing and encouraging people getting cheaper healthcare outside the USA. IMO The US government and the citizen both lose in this situation.

Now why be a citizen of such a country? Well, while it's easy to renounce (one simply goes into an embassy and makes a formal written statement of renunciation whereby you'll love your passport, and visas in that passport, and any other protections as a citizen)...it's damn near impossible to renunciate one's citizenship affordably. They will still tax any assets you haven or have earned in the US (the taxation occurs whether or not one is a US Citizen or US Resident). I think your question (because of the Tax Agreements and the Tax Deductions on foreign income) principally applies to the wealthy. You can renounce but there will be a period of several years where one is still on the hook and they will audit the hell out of a renunciate on whether they have secretly laundered $$ abroad to avoid taxes or avoid legal obligations (alimony, child support, paying of creditors). Most of the renunciations occur with "accidental Americans" who hold dual citizenship and may never have even visited the US. The others are usually wealthy who have been able to get citizenship in another country.

https://en.wikipedia.org/wiki/International_taxation

There are some nations (tax havens) that have no personal income tax at all- whether citizen or non-citizen or whether you earn that in the country or outside...these are the famous Caribbean ones (Antigua, Bahamas, Cayman Islands, St. Kitts & Nevis, Turks & Caicos) and several in the Persian Gulf (Bahrein, Kuwait, Oman, Qatar, UAE) and some small monarchies (Brunei, Monaco, Vatican City) and other oddballs (Maldives, Nauru, Pitcairn, St. Barthelmy, Vanuatu).

There are 4 tax categories:
  1. Countries that tax citizens and legal residents on their worldwide income no matter where they live. These countries also tax residents on their worldwide income. That includes the US, Myanmar, Hungary and North Korea. Some countries tax residents and citizens on overseas income but at much reduced rates.The US and Hungary have a lot of tax treaties that exempt their citizens from foreign taxes. Several countries will continue to tax their citizens for a period of some years (Finland or Sweden), while others will tax their citizens for several years if they move to a "tax haven" (Spain, Portugal, Italy, Mexico, and France to Monaco). Turkey will tax foreign earnings unless tax has been applied by the resident country. The UK will tax foreign earned assets on anyone that owes on a Student Loan at a 9% levy, until paid off or 30 years..
  2. Countries that tax residents on their worldwide income. This is called a residential or physical presence tax system. Most countries use this system.
  3. Countries that tax citizen residents on their worldwide income but not foreign residents. This includes the Philippine (territorial taxation for foreigners) and Saudi Arabia.
  4. Countries that tax residents on their local source income but not foreign source income. This is called a territorial tax system. These are mainly in Central America, some African countries and Hong Kong, Singapore, Malaysia
Tax treaties complicate things, and it's not so easy to say in individual situations that US citizenship is better or worse that other citizenship. It depends on where you live and the sources of your income. Oh and the benefits of citizenship that may be conferred.

Last edited by RedApe; Apr 29th 2019 at 1:19 pm.
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Old Apr 29th 2019, 3:54 pm
  #32  
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Default Re: Sabah MM2H

Oh and as well as giving up your passport (make sure that you have your new citizenship in order), there is now a relinquishment tax" of $2350, and a tax (for those with net worth over $2 million or an income of $160,000/year for the past 5 years) on Capital Gains based on the value of your assets above $699,000 (i.e. if they were sold on the day of your renunciation/relinquishment). I don't know how much it costs too acquire a foreign citizenship in one of those tax havens but I doubt they are looking for folks in my income class.
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Old Apr 30th 2019, 7:44 am
  #33  
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Default Re: Sabah MM2H

Originally Posted by RedApe View Post
Medicare is not taxed...but you cannot receive it unless you live or return to the US and to get full coverage you must continue to pay a Premium. THIS latter is the most ridiculous, irrational and unjustified aspect...as the Medicare System (which covers about 20% of a seniors healthcare costs) would actually save money by subsidizing and encouraging people getting cheaper healthcare outside the USA. IMO The US government and the citizen both lose in this situation.
Yes, it is off our topic on Sabah, but thank you for very good points on the citizenship and taxation. Thank you!

Regarding the Medicare System, there are certain considerations on why it is the way it is in the US.
Half of all U.S. hospitals loose on Medicare patients. You would think that it would be so much beneficial for the Medicare to reimburse expats for their medical bills abroad than to pay for the same patients at home.

If you have a private US based insurance, you can be reimbursed for some of your foreign medical bills, if the amount exceeds your deductible, which is usually several thousands dollars. It doesn’t look like the government wants to create an incentive for the Medicare patients to leave the country.
Even though the Medicare system will be out of funds in just 15 years, the government still doesn’t encourage you to leave the country. Why?

1) If you live in the US, you spend not only on your healthcare but also on your house, shopping, services and etc. Therefore, if you leave, all this revenue is gone.

2) If thousands of retirees will move abroad in order to get a better healthcare for less, this would be an embarrassment for the U.S. to admit that its healthcare system, in which people paid for several decades, is broken.

3) Medicare represents 1/3 of the healthcare load. Healthcare is 1/6 of the US economy. Big healthcare lobbyists work hard to increase their profit.
- A family practice physician can make a living on Medicare patients alone.
https://truecostblog.com/2010/03/10/...y-on-medicare/
The American Medical Association was the biggest spender for lobbying operations among health care groups. They definitely don't want their patients to move abroad.
- Drug lobbyists. Do I even need to comment on this?

4) Healthcare insurance companies are also among the largest lobbyists. Many older adults look forward to fulfilling their travel bucket list during retirement. Since Medicare will not cover international medical bills, travel insurance and evacuation insurance can be purchased for your travel at private health insurance companies. This is a big industry. I think if Medicare attempts taking this “bread” out of private insurances’ ”mouth”, they will react very strongly on this.
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Old May 1st 2019, 5:12 am
  #34  
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Default Re: Sabah MM2H

Yeah off topic, but I've done considerable research on this topic and have lobbied (as a citizen, not a member of any group) various politicians who assert they are interested in "Saving Medicare". The big problem is 3 & 4 (the Medical Establishment Lobbyists). They frequently assert, without evidence, that the quality of healthcare abroad is horrible, that allowing Medicare portability overseas would be subject to rampant fraud, and even that the government would be subject to liability suits if they "encouraged" Health Tourism. All absurd claims or easily resolved. But of course it's really about campaign contributions.

But let's just take one aspect of the Medicare system and how that portability would save the systems billions of dollars each year. It's forecast that there will soon be over a million hip/knee replacement procedures annually in the US. Typical costs are $50-$60,000, Ignoring the co-pays, deductibles and Plan B monthly premiums...Medicare will pay 80% ($40-$47,500) of the cost for the operation, the patient pays 20% ($10-12,500). Usually they have to wait until the problem reaches an excruciatingly level that can't be dealt with by walkers, or braces. Years of pain before approval (which impacts health in other ways). But if you get the procedure done in Thailand or Malaysia it can be under $10,000 total, done quickly, and with better post op rehabilitation care. Medicare could pay 100% and still save $30-$40,000 per procedure. Multiply that by 1 million. Thirty to Forty billion dollars...for one type of procedure. And they are worried by a few million in "fraud"?
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Old May 1st 2019, 12:55 pm
  #35  
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Default Re: Sabah MM2H

Originally Posted by RedApe View Post
The big problem is 3 & 4 (the Medical Establishment Lobbyists). They frequently assert, without evidence, that the quality of healthcare abroad is horrible...
There are only a few areas where the US is better than the developed countries where healthcare is socialized :
https://www.healthsystemtracker.org/...ity-index-2016
Democrats in the US may break the power of big healthcare lobbyists and will adopt the same system as in these successful countries.

Originally Posted by RedApe View Post
Years of pain before approval (which impacts health in other ways). But if you get the procedure done in Thailand or Malaysia it can be under $10,000 total, done quickly, and with better post op rehabilitation care.
Overall healthcare in the US is still better than in Thailand and Malaysia where it can be cheaper, but not necessarily better:
https://www.photius.com/rankings/healthranks.html
The ratio of patients per nurse is very important for postop recovery. Even if your surgery will go well, you have a higher chance to die in the US after a surgery simply because there are not enough nurses to take care for you. I wonder how postop care is in Malaysia.
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Old May 6th 2019, 11:19 am
  #36  
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Default Re: Sabah MM2H

Originally Posted by StillSearching View Post
There are only a few areas where the US is better than the developed countries where healthcare is socialized :
https://www.healthsystemtracker.org/...ity-index-2016
Democrats in the US may break the power of big healthcare lobbyists and will adopt the same system as in these successful countries.


Overall healthcare in the US is still better than in Thailand and Malaysia where it can be cheaper, but not necessarily better:
https://www.photius.com/rankings/healthranks.html
The ratio of patients per nurse is very important for postop recovery. Even if your surgery will go well, you have a higher chance to die in the US after a surgery simply because there are not enough nurses to take care for you. I wonder how postop care is in Malaysia.
actually pretty bloody good. I had vascular surgery in February. 9k RM for one leg, day case. Had an assigned Malaysian nurse to sit with me during my recovery, and make sure all my vitals etc were normal.
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Old Jun 24th 2019, 5:15 am
  #37  
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Default Re: Sabah MM2H

Still Searching,

Just curious : what attracted you to Kota Kinabalu / MM2H in Sabah, over Kuching/ MM2H in Sarawak?

I've looked at Malta and Cyprus, but in the end rejected both, and am looking seriously at MY now.
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Old Jun 24th 2019, 6:57 am
  #38  
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Originally Posted by hamski View Post
what attracted you to Kota Kinabalu / MM2H in Sabah, over Kuching/ MM2H in Sarawak?
Sarawak is a great place to retire as well as Sabah. We just picked Sabah.
It is the best to stay for some time in Sarawak and Sabah just to see what works the best for you.
I will list our considerations, which are obviously different for other applicants.

MM2H process:
- In Sarawak, the Personal bond must be sworn by a Sarawakian. I guess, we could find a Landlord, who is willing to "trust" us in order to sponsor us and go to the Immigration for an interview. In order to do this, we would need to start renting a flat or a house before applying for MM2H, because a Certified copy of sponsors ID (MyKAD) card is required. We were reluctant to search for a sponsor at that time.
- A visa is only for 5 years. It is 10 years for Sabah.
- Wait time for getting an approval was much shorter than in Kuching. We needed to get an approval asap, because we already relocated to MY. This may not be an issue for other applicants.

Place to live:
- We like to live in a low density apartment 1900-2200sf, with a big well maintained lap pool, away from the noisy roads, and within 5 min-drive to grocery stores. I couldn't find anything to our taste in Kuching. Most of the apartments are high-density and relatively small.
- We like green hills, mountain view and close proximity to the beaches in Sabah. We can see the ocean, green hills, mountain Kinabalu, and amazing sunsets from apartment. This is really nice. We take Grab and we get to a beach in 7 min. But Kuching is flat and doesn't have many easily accessible sandy beaches.

I found that cost for comparable apartments is a little lower in Kuching. Other factors like quality of shopping, hospitals, air quality, level of development are similar according to my on-line research. I've never been to Kuching. Hope to visit soon.

We've been considering Malta and lived there for several months through cold, windy and damp 6 months and hot and firework-noisy warm months. It is a much better choice to retire in Sabah (or Sarawak)!
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Old Jun 24th 2019, 8:15 am
  #39  
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Default Re: Sabah MM2H

Thank you.
We will visit both KK and Kuching for a long vacation
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Old Jun 24th 2019, 10:25 am
  #40  
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Originally Posted by hamski View Post
Thank you.
We will visit both KK and Kuching for a long vacation
Good idea. Keep in mind though that if you decide to apply in Sabah, their MM2H officers don't like a passport stamped in West Malaysia, Kuala Lumpur or Penang. They take it as a reason to deny the application.
If you decide on Sabah, you are very welcome to send me a message and I can share details of our process in getting a visa and etc.
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Old Jun 24th 2019, 11:26 am
  #41  
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Default Re: Sabah MM2H

SS,
Very kind of you.
I have read this thread carefully, and noted some of the quirks, but thanks for the reminder.

I'll be in contact with you after our trip, which will probably be in February 2020. I will visit Immigration
in both cities, and post details if anything is of help to the board.
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Old Jun 24th 2019, 2:44 pm
  #42  
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Default Re: Sabah MM2H

Another advantage to living in Malaysia is they have no inheritance tax, I believe. FD accounts average 4% for my Sabahan wife. KK is my home, well i little outside of the city when i finally retire. I have a heart condition and have seen two cardiologists who say the medication prescribed to me in Japan is available there and both are willing to take up my case.
Ok i am biased and have never been to Sarawak or West Malaysia outside KLIA but Sabah suits me fine. Many fine restaurants with modern cuisine as well as traditional fare. Great food, great shopping, great people.
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Old Jun 24th 2019, 8:41 pm
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Thank you, Hovite
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