After endless months of correspondence, emails and sample documents, the time for Diane and I to file our MM2H Application is finally arriving next week. Technically known as“Malaysia My Second Home”, the program is a government sponsored plan that allows applicants unlimited entry in and out of Malaysia for ten years, renewable indefinitely. Although not the same as residency, the program is mostly designed for middle class folks that want to live or retire time in the country but not work. Limited opportunities are available for those wishing to engage in certain business activities but that requires special permission and extra paperwork . With an application requiring almost 100 pages of backup documentation, Diane and I don’t see ourselves starting an online enterprise anytime soon anyway. (For those interested, there is a 20 hour per week work permit for main applicants age 50 and over but only in certain sectors subject to government approval).
Considered one of the better programs for expats searching for a warm climate, stable government, low crime and high standard of living, the MM2H Program has been mentioned many times in notable financial publications along with other countries like Ecuador, Costa Rica and Panama. Offering benefits such as exemptions on import duty for vehicles, unlimited opportunities to buy property, education for children in public or private schools and even a foreign live-in maid, there are other countries that offer even more (Panama is probably the world’s best) but Malaysia makes a perfect base for exploring Southeast Asia at a fraction of the cost when compared with other expat destinations.
Unfortunately, the MM2H doesn’t come cheaply. Applicants not enrolled in a qualified government pension must agree to submit a fixed deposit held in a Malaysian bank of RM $150,000 (about $42,000 USD) and keep it there for as long as they stay in the program. Earning interest at prevailing local rates, dividends are deposited or reinvested to an applicant’s local bank account. Only accessible for medical emergencies or investing in property, this probably keeps the program’s members low relative to others expat havens but we think i’s worth it. The fixed deposit amount doubles for applicants under age 50. Other requirements are proof of liquid assets over RM 300,000 (about $85,000 USD) and RM 10,000 per month in “continuous income”. (about $2,700 USD)
With two possible options for applicants, you can either choose a DIY (do it yourself) application or appoint a government licensed agent that will submit on your behalf. Having heard all arguments for and against using an agent, now that the time has come for filing, I can only offer our reasons for using an agent. While not inherently complicated, the main problem I see is the ambiguous nature of some requirements. Americans have the strictest privacy rules for release of personal financial information and using an agent will help make sure you don’t waste time sending something across the ocean only to find you didn’t submit something exactly the way the ministry requests.
We recommend and highly endorse the agency known as Joy-Stay, Enjoying an amazingly great email relationship with Yvonne, the owner of the agency, they are generally accepted as the best among the hundreds of licensed agents. Always acting professional and friendly, one of our contacts on an old forum recommended we start as far as one year ahead of the intended filing date given our timing with close of escrow. Seeming a bit far ahead, it turned out to be very helpful given that we close escrow ten days after our filing, As homeless early retirees, it’s comforting to know we have about a 99.9% chance of receiving our conditional approval letter about 90 days after we file thanks to all our advance preparation and Yvonne’s willingness to answer all questions and give suggestions, advice and guidelines along the way.
Summarizing the process, applicants will need to submit to the ministry three months worth of financial documents proving cash in hand and bank statements proving minimum continuous income of RM 10,000 per month. Luckily for us, a co-applicant’s income is admissible to satisfy the income rule which helps if you get laid off unexpectedly as I did. Be ready to go through a rigorous procedure of verifying what makes up an “original” document or a “certified true copy”.
Citing an example of why an agent works best for overseas applicants, especially Americans, take the case of California. “Certified true copies“ are not permitted by state statute except for trial documents and it took many email conversations and sample letters to find out that we can use “jurats” as a substitute. Similar to a notary stamp, we basically showed an authorized clerk a color copy of certain documents, paid $10 per page, swore we’re not lying (about what? No idea) and they placed an official stamp that MUST BE STAPLED to the document to be valid.
Using another example, the ministry prefers applicants have all their cash in hand in “cash and equivalents”. Anyone not living under a rock since 2008 knows that it’s ludicrous for most middle class folks to keep over $100,000 USD in Fixed deposits like CD’s or GIC’s and checking accounts. Especially true for Americans, our interest rates are the lowest in the world, Diane and I would never be at this point had we kept all our cash tied up in fixed investments earning a few pennies a year. Securities are technically allowed but highly discouraged especially if you hold mutual funds where balances are subject to underlying securities that fluctuate with the market.
Knowing your way around the rules goes a long way, however, and that’s where Joy-Stay helped us immensely. Posing each question to the ministry individually, she eventually got them to accept sample our brokerage statements, verification letters (another nightmare for Americans) and other essential documentation in an acceptable format. Designed to almost guarantee acceptance, Joy-Stay will agree to check every item required ahead of filing to make sure it’s in proper form and will not file any application until every document meets their satisfaction. With little time to waste, I’ve compiled all the documents over the last year to save time. Since Diane and I are leaving our house soon after escrow closes and well before the visa’s approval, it would have made little sense to chance a DIY filing.
Once my third consecutive bank statement becomes available later this month, we’ll send all our documents via DHL and wait for confirmation of submission by Joy-Stay. Only at that time will they even invoice us for the submission. Financially speaking, market conditions play a role. DIY filers must post a bond of about $800 USD anyway and Joy-Stay includes the fee in their basic service package (RM 3,800). Given the unprecedented strength of the USD recently, this means our fee is only about $1,043 or $243 more than a DIY application but with the knowledge that everything in the application package is exactly as the ministry wants. Practically a no-brainer for “anal” people like myself that hate having no control over their situation, going the “agent” route makes obvious sense for us.
Addressing the specifics all applicants need to complete, below I’ve listed all the items on our MM2H Application checklist. Each time we obtained a new piece of documentation, we emailed Yvonne for review. Commenting along the way when certain information was incomplete, she updated each item once she approved it as a ” good copy” and we began keeping the documents to be submitted in a presentation folder that’s grown to the size of a thesis. I’ve briefly summarized all 14 items.
1) Agent appointment agreement – summarizes the program requirements and agent fees
2) MM2H Application forms – not very complicated
3) Resume/CV – requested by the ministry even for laid off schleps like myself; Protects against deadbeat applicants (?)
4) Cover Letter – Joy-Stay can help with this
5) Five 3.5cm X 5cm color passport photos taken within the last 6 months on a white background.
6) Passports – Notarized COLOR copies of Diane’s and mine AND the ridiculous part: Copies of EVERY PAGE of all passports including blank pages; mostly to make sure you have no stamps from Israel which equates to instant disqualification. (Enter your own political opinion please. Diane says I can’t have one on this blog).
7) Letter of good conduct police clearance certificate – Fingerprints NOT required; simply ask your local police force to run a standard criminal background check
8) Bank Authorization Letters – often VERY difficult for Americans owing to increase of electronic forms, lack of human contact and physical branches and strict privacy rules about dissemination of information. Ask for a visa emigrant letter showing verification of accounts and be ready to return several times to the bank
9) Cash-in-hand statements – We used our brokerage assets to qualify. Check ahead of time to make sure they consider whatever assets you have as “liquid”. Easier to send “originals” and not certified true copies (not allowed by law in many states anyway). Use heavy paper on your best printer setting and hope there’s one small item in color. They like color, seals, signatures and various other features now very obsolete in the USA
10) Net Income statements – same as above; If using salary to show income, include pay slips and make sure they match your statement and include a written description of the income.
11) Self-health declaration – declares you are free on major communicable diseases.
12) Notarized copy of marriage certificate –
13) Original Letter of Employment – states your position, salary and duration of employment. We used Diane’s employer
14) Notarized copy of Tax Returns – Since the income to be considered is from my co-applicant, somehow our joint tax return serves as a substitute for the primary applicant’s lack of income. Unclear if this would apply in every situation.
Accepting that even after all this, the process is not finished, we’ll ship off the documents and once properly submitted, the next step is waiting. Meeting only twice per month, a special committee considers all pending applications and when they decide to approve it, they issue a “conditional approval letter”. Generously allowing an applicant six months from the issue of said letter, applicants must then travel to Putrajaya, the Malaysian government center and complete three final steps. Placing the fixed deposit at a local bank, applicants then submit to a simple medical exam and buy a medical insurance policy for a one year period of one year minimum. Yvonne told us she can set up the medical and insurance parts. We already have a multi-national banking relationship.
Finally, the applicant’s passports receive a stamp and the incredibly tedious process ends. Usually spending some time in Kuala Lumpur, most applicants not planning on living in the capital plan a little sightseeing excursion as Diane and I plan on doing. Unfortunately, the rules mean we’ll have to enter Malaysia on a standard 90 day tourist visa and hope there are no complications so we don’t have to re-enter a second time. Planning on leaving North America in mid to late June, this should allow enough lead time. Meanwhile, we’ll probably stay at The Copthorne Orchid Hotel upon arrival whole we search for an apartment in Penang.
Seemingly complicated when written as a post like this, ultimately it will probably be the first new experience in what we hope is a new adventure as Experimental Expats. Nothing is set in stone and adapting to our new lifestyle will no doubt be difficult albeit it entertaining. Contributing to the blogosphere helped make the adventure a bit easier and we’re hoping for more engagement once we’re actually in Asia. Appreciative of your support, we just passed 12,000 page views and we haven’t even arrived in Asia yet so thanks for following along and here’s to happy Trails Ahead.