This article first appeared in The Edge Malaysia Weekly on September 27, 2021 - October 3, 2021
EARLIER this month, Thailand relaxed its visa rules to make it easier for foreigners and long-term tourists to stay in the country, as it looks towards these groups to generate about THB1 trillion (RM127.2 billion) in new spending for the economy between 2022 and 2026, during which some one million foreign residents are expected to provide THB800 billion in investments and THB270 billion in tax revenue.
According to news reports, the target groups include global citizens, foreign retirees, remote workers and highly skilled professionals.
Thai government spokesman Thanakorn Wangboonkongchana was quoted as saying that one of the major measures is the introduction of a long-term resident visa, where a number of privileges are given, such as an exemption of 90-day reports to its immigration office. There are also some amendments to related laws or regulations, such as land ownership and exemption from foreign income tax.
The move comes on the heels of Malaysia’s own overhaul of its Malaysia My Second Home (MM2H) programme, which has been criticised by many for being too stringent. According to Malaysia My Second Home Consultants Association (MM2HCA) president Anthony Liew, the revised terms have made the soon-to-be-reactivated MM2H programme less attractive than similar programmes in Thailand and the Philippines.
For comparison, Thailand currently has a residence programme called the Elite Residence programme, which offers foreign applicants seven options, each with varying validity periods, benefits and costs. One of the most popular options is the Elite Easy Access. Similar to the new rules under MM2H, the Elite Easy Access has a validity of five years and is renewable for another five years. However, there is no minimum stay requirement unlike MM2H, where applicants now have to reside in Malaysia for at least 90 days in a year.
There is no income requirement to hold the Thai Elite Visa. The applicant only needs to pay a membership fee, which ranges from THB600,000 to THB2 million, depending on the membership package applied for.
In comparison, the fee for a MM2H Pass will be increased from RM90 to RM500 for each year of the duration of the pass. A processing fee of RM5,000 will be imposed on the principal applicant and RM2,500 for each dependent. Previously, no processing fee was charged.
There is also no age limit under this programme apart from the Elite Ultimate Privilege (Grand Package), which requires the applicant to be at least 20 years old.
Thailand also has a visa programme that is popular among retirees aged 50 and above. However, applicants must hold passports issued by, and be nationals of, Japan, Australia, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Sweden, Switzerland, the UK, Canada or the US. Similar to the revamped MM2H, holders of one of the three options — the non-immigrant OX (long stay) visa — are allowed to stay in Thailand for five years, extendable for another five years, without the intention of working. The applicant must also meet the financial requirement of no less than THB3 million savings in a Thai bank. Alternatively, they must have no less than THB1.8 million savings in a Thai bank and an annual income of no less than THB1.2 million.
Malaysia’s new financial conditions appear to be comparatively higher. An MM2H participant must now have a minimum offshore income of RM40,000 per month, a minimum fixed deposit of RM1 million and must prove that he or she has liquid assets of RM1.5 million.
“While the intention of having high-quality investors here is good, the new threshold appears to be too steep, which may make Malaysia not so attractive compared with other countries. And other Asean countries like Thailand have a lot of things to offer such as culture, places of interest such as beaches, and a vibrant nightlife,” says Lee Heng Guie, executive director of the Socio-Economic Research Centre.
“The biggest concern is whether these new requirements will also be backdated. It should only apply to new MM2H applicants and not the existing ones,” he adds.
Apart from Malaysia and Thailand, another country that will be making changes to its residency-by-investment programme for non-EU citizens is Portugal, which aims to drive investment towards the country’s low-density population areas, relieving pressure on higher-density areas such as Lisbon, Oporto and the Algarve.
The Portugal Golden Visa programme has long been a popular choice with expatriates as it allows people to apply for permanent residency and citizenship after five years through investing in real estate. But come Jan 1, 2022, individuals will need to invest a minimum of €500,000 (RM2.45 million) in real estate.
However, individuals need only invest €350,000 in a property that is at least 30 years old, which will be refurbished, or €280,000 if that same property is also located in a low-density area.
For investment via the non-real estate route, the required minimum investment amount will increase to €500,000, from €350,000 currently, for investment by investment fund or venture capital fund option, while that of the capital transfer option will increase to €1.5 million from €1 million, among others.
Datuk Seri Dr Victor Wee Eng Lye, an economist and professor at the School of Hospitality, Tourism and Events at Taylor’s University, believes that once the financial conditions of the MM2H programme rise to a higher threshold, the income profile and preferences of the retirees would change.
“Malaysia will be competing directly with more expensive retirement destinations such as Italy, Greece or Spain if the retirees prefer the Mediterranean climate or Mauritius for a tropical island environment. Spain provides good weather with no restrictions apart from health insurance and proof of an income or pension,” he tells The Edge.
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