Review new MM2H rules or risk capital outflow, says MICCI

It is understandable that the new rules are to attract a different segment, so it should only apply to new applicants

by HARIZAH KAMEL / pic by TMR FILE

THE Malaysian International Chamber of Commerce and Industry (MICCI) has urged the government to immediately suspend the new Malaysia My Second Home (MM2H) rules.

Instead, it suggested for the policies to be reviewed with consultation with the stakeholders.

MICCI ED Shaun Edward Cheah said the unilateral and sudden announcement of the new MM2H rules has been causing consternation among the existing MM2H residents and has not bode well with any potential MM2H applicants.

“Many have truly made Malaysia their second home and their children were also brought up here. Many are retired skilled professionals that contribute to the talents, corporate social responsibility activities, economic activity, real estate and private schools.

“The new onerous rules apply to renewing MM2H residents who qualified under the previous rules are hard-pressed to meet with the new rules. There is a sense of abandonment by what used to be a friendly and welcoming Malaysia akin to asking for after-sales service from a backyard used car salesman,” he said in a statement last Friday.

Cheah said many have packed up and left, but there are still those in the process of or at least considering liquidating their assets and moving elsewhere.

He pointed out that when the country is in need of capital for its post-pandemic recovery, there will be a significant outflow of funds from the market as these residents had to deposit funds and purchase assets to qualify for the old MM2H.

“It is understandable that the new rules were to attract a different segment, so it should only apply to new applicants and not for those that are already here.

“The much-needed post-pandemic recovery capital will outflow and assets liquidated,” he said.

Cheah mentioned that conversations with MICCI’s foreign members and their associates have confirmed the deep sense of betrayal and this negative narrative is spreading to any potential new MM2H applicants.

“Malaysia has already been tagged with being ‘flip-flop’ on top of the kleptocrat stigma, it does not augur well to inspire investor confidence no matter how attractive the sales pitch for the digital investment and foreign direct investment programmes.

“Furthermore, the new MM2H programme is passed on to the preview of the Immigration Department, an enforcement objective agency and not an agency that is tuned to being welcoming or attracting,” concluded Cheah.

The Malaysian Reserve (TMR) earlier reported that the government needed to relook at the new stringent requirements of the MM2H programme, particularly on raising the condition of offshore income from RM10,000 a month to RM40,000.

Glomac Bhd group MD and CEO Datuk Seri Fateh Iskandar Mohamed Mansor told TMR that the quantum of the hike of the income threshold is “too high”, even though there has not been an increase in the past 17 years.

Although an increase of between 20% and 30% would be deemed acceptable, he said. Malaysia could lose its competitiveness to attract expatriates setting their home base in the country if they could not afford the MM2H programme anymore.

The new MM2H programme is expected to be re-introduced in October after it was temporarily frozen in August 2020 for review.

The government has added nine new conditions including that, participants must be in the country for at least 90 cumulative days in a year to ensure they truly contribute to the economy.

Participants are also required to have a fixed deposit account with a minimum of RM1 million, where a 50% maximum withdrawal from a principal amount is allowed for buying property, health purposes and children’s education.

Fateh Iskandar said potential buyers would rather spend RM10,000 to R0M20,000 in Bangkok, Thailand, or Bali, Indonesia, instead of choosing to invest in the Klang Valley, Penang or Johor.

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