HLG Retiree Guide to Living Overseas: Malaysia

IS MALAYSIA A GOOD PLACE FOR FOREIGNERS TO RETIRE?

With great weather, natural beauty, a low cost of living and a favourable tax regime, Malaysia is a tempting destination for retirees. Furthermore, due to its British heritage and the fact that most children learn English from early grades in school, there is really no language barrier. 

It is a lovely country, with gorgeous beaches, stunning verdant rainforests, soaring mountains, and a spectacular capital, Kuala Lumpur. Strategically located for travel, there are more than a dozen countries within a two-or three-hour flight. Capital flow restrictions are also minimal, which is crucial for retirees with assets abroad. 

What is the cost of living in Malaysia Like?

Malaysia is very attractive for those who are aiming to make their funds go further. Looking at housing costs, utilities, travel, and day-to-day living expenses, this is one of the best options for a better standard of living. Numbeo, a website that examines pricing data, for countries around the world, says that the average cost of living in Malaysia is 54% and rent is 80% lower than in the United States; 43% and 68% less versus the United Kingdom; and 48% for cost of living and 62% for rent less than in Australia.

WHAT IS THE COST OF HOUSING IN MALAYSIA FOR A RETIREE? 

Quite simply, the low cost of living allows you a much more luxurious mode of living and you can still save money. For example, rental of a one-bedroom apartment in the capital, Kuala Lumpur, is approximately USD 440 to USD 640 or USD 270 to USD 370 in the suburbs. In Ipoh, a city 200 kilometres to the north it would cost only USD 205 per month, outside the city centre. The equivalent in a major American city is USD 1,600 to USD 3,600 (numbeo.com; livingcost.org).

CAN FOREIGNERS CHOOSE TO OWN A HOME IN MALAYSIA?  WHERE IN MALAYSIA DO THEY BUY?

Kuala Lumpur, the capital, and Johor, the coastal gateway to Singapore, are popular, and many foreigners live on the island state of Penang, with its glorious beaches and low costs.  In Kuala Lumpur, a large 1,000 to 1,200 square foot home will probably cost between USD 220,000 and USD 250,000; in George Town, the capital of Penang, it is about USD 140,000 to USD 160,000. A similar property in New York is 7 to 10 times that amount or more!  One acquaintance recently bought a luxury 3-bedroom home with a garden, beautiful coastal views, and a pool for just over USD 400,000, so a lifestyle upgrade is possible for many.

CAN I LEGALLY BUY A HOUSE IN MALAYSIA?

Yes, you can, though there is a minimum property value threshold in Kuala Lumpur of MYR 600,000 (USD 125,000 at the time of writing) and less in some other parts of the country. But this should not be a problem, as it is designed to not inflate prices for poorer local citizens, and the properties affected are probably not ones a foreigner would consider.  

The buying process is a little different. Simply do your research to identify where you want to live and what type of house best meets your needs, then brief a real estate agent. They will give you an idea of prices, find possible properties and take you through the whole process. You will then need a down payment (approximately 10%) when you have found the house and negotiated the price, as well as some processing fees: stamp duties, lawyers and legal fees, and a sales and purchase agreement fee. Malaysian banks will also give you a housing loan, if you want one, on similar terms to other countries. From beginning to end it can take as little as two to three months.

ARE TAXATION RATES IN MALAYSIA HIGH?

To start, only income earned in Malaysia is taxed by the Malaysian government, at a top marginal tax rate of 30%, typically well below US rates. You will not be required to pay tax on capital gains, royalties, interest, or other income from offshore sources, including pensions and other social benefits. There are also no inheritance taxes. You may even be able to take advantage of some provisions to legally reduce taxes in your home country.  

DOES MALAYSIA HAVE GOOD HEALTHCARE?

Malaysia is quite well known for its affordable and quality healthcare, which ranks highly on worldwide indexes, and it maintains the highest western standards.  It is also a simple system. Visiting a GP or specialist can be done in advance or simply show up and wait to be seen. Initial visits cost around USD 20 to USD 50; follow up visits are often less than half that; and a private room for a night in a hospital is around USD 200. There are no months-long queues for treatments, and costs for medicines are frequently around one third of what the US charges for the same drug. 

SO, WHAT DO I NEED TO DO TO RETIRE TO MALAYSIA?

To retire in Malaysia the solution would be the MM2H or Malaysia My Second Home is a Residency-by-Investment program that grants a 5-year, renewable, multiple-entry visa. It covers the applicant and, if you wish, your spouse (including a de facto) and dependent children. 

WHAT DOES MALAYSIAN RESIDENCY COST? 

First, you will need to make a fixed deposit of MYR 1,000,000 (approximately USD 210,000), plus an additional MYR 50,000 (USD 10,000) for each dependent (depending upon some age restrictions). After 1 year, up to half of this amount may be withdrawn for healthcare, education, or a real estate purchase in Malaysia. The remainder can be withdrawn if you decide at anytime to relinquish your residency rights. (Note: you must also have an income of at least MYR 40,000 (USD 8,000) per month and liquid assets of at least MYR 1,500,000 (USD 300,000). There are several other requirements in terms of health insurance and paperwork, but the above covers all the main costs. 

If you are interested in living in or retiring to Malaysia, or you are interested in other Residency and Citizenship-by-Investment programs, please visit https://harverylawcorporation.com/malaysia-residence-by-investment-programme/.

For more information or if you would like to talk to one of our professional staff, please email us at contact@harveylawcorporation.com.