Malaysia Residency by Investment
The Benefits of Investing in Malaysia
At Sterling Migration, we are experts in the niche area of immigration by investment for Malaysia. Our team strive to provide the most suitable investment opportunities to meet our clients needs to ensure they can secure residency under the current Malaysian immigration laws supporting Investments For Malaysia from Foreign investors.
Second Citizenship and residency by investment in Malaysia is no longer the preserve of the few. Migration Investment programmes are now the fastest growing area of immigration law globally as people come to realise residency and a second citizenship is not just desirable but, a vital part of any effective global freedom, privacy and security strategy.
How to secure residency in Malaysia on an Investor Visa
The MM2H program requires applicants to meet certain criteria and in exchange, applicants and their dependents are granted a 10-year multiple-entry visa. This is effectively a residence permit, enabling the successful applicant and their family to live in Malaysia.
Requirements for an Investor Visa
Applicants are required to demonstrate the capability to support themselves financially in Malaysia without seeking employment or government assistance. The financial requirements are as follows:
For applicants below 50 years old
- Proof of bankable assets of at least MYR 500,000 (USD 135,000)
- Proof of income of at least MYR 10,000 (USD 3,000) per month
For applicants 50 years old and above
- Proof of bankable assets of at least MYR 350,000 (USD 95,000)
- Proof of income of at least MYR 10,000 (USD 3,000) per month
Requirements for Approval
Once an applicant receives a conditional approval letter, they must meet the following requirements:
For applicants below 50 years old
- A bank account must be opened with a deposit of at least MYR 300,000 (USD 80,000)
- After a period of one year, up to MYR 150,000 (USD 40,000) may be withdrawn for approved expenses relating to a house purchase, the education of children in Malaysia or medical purposes
- A minimum balance of MYR 150,000 (USD 40,000) must be maintained from the second year onwards and throughout the stay in Malaysia under the program
For applicants 50 years old and above
- A bank account must be opened with a deposit of at least MYR 150,000 (USD 40,000)
- After a period of one year, up to MYR 50,000 (USD 13,000) may be withdrawn for approved expenses relating to a house purchase, the education of children in Malaysia or medical purposes
- A minimum balance of MYR 100,000 (USD 27,000) must be maintained from the second year onwards and throughout the stay in Malaysia under the program
- With proof of receipt of a pension of at least MYR 10,000 (USD 3,000) per month, the participant may be exempt from making a fixed deposit
Procedures and Time Frame
The Ministry of Tourism and Culture is responsible for the processing of all applicants. The Immigration Unit will issue a conditional approval letter to each approved applicant.
Upon receiving the conditional approval letter, the applicant needs to travel to Malaysia and fulfil the remaining requirements:
- Open a bank account in Malaysia and transfer the fixed deposit
- Purchase medical insurance from any insurance company in Malaysia
- Obtain a medical report from any private hospital or registered clinic in Malaysia
After submission of the fixed deposit certificate, the medical insurance policy and the medical report, the applicant may collect their MM2H visa.
It is important to note that the visa does not allow the holder to work in Malaysia and it does not lead to permanent residence.
Taxation in Malaysia
Malaysia uses a territorial taxation system. Residents are only taxed on Malaysian sourced income and the progressive tax rate on chargeable income reaches a maximum of 24%.
A 20% capital gains tax is levied on real estate belonging to non-citizens if the property is disposed of within four years of the purchase date.
The standard rate of GST is 6%.
Malaysia has an extensive network of double tax agreements with other countries, which means a resident of Malaysia may be able to claim a tax refund on foreign income taxed in overseas countries.
Establishing A Private Trust In Malaysia
Trust that is created for the benefit of one or more ascertainable beneficiaries.
What is the Type of Trusts are most commonly used
- Single Parent Trust
- Special Child Trust
- Golden Age & Healthcare Trust
- Insurance Trust
- Charitable Trust
- Investment Trust
- Property Trust
Detail Explanation of each trust:
Single Parent Trust
For a single parent who is divorced or widow
You are the only person your child depend on financially. You are worried that when you passed away, your children’s education, maintenance & healthcare is not taken care of because there’s no one to take care of their welfare.
Special Child Trust
For a child with special needs (down syndrome, disable etc)
Planning ahead for your child is never easy, more so when you are not around. It is even more difficult if your child is a special child or disabled or suffering from a major illness. How can you ensure that your child will be taken care of when you are not around?
When planning, you may wish to consider the few points below:-
- Who will take care of your child should you become critically ill or permanently disabled or have departed?
- Would your special child be able to fend for himself when you are no longer around?
- If your child needs constant medical attention or is suffering from a major illness, would your appointed Guardian have the time and resources to provide such attention taking into account that he/she is working or has a family of his/her own?
- Does your child need nursing care in the comfort of his/her home? How do you ensure there is continuous nursing care for your child upon your demise?
- How do you ensure your special child gets the proper education and training?
- What is the cost to take care of a special child?
- Is the Guardian able to provide full attention to a special child?
- What are the financial resources of the Guardian?
- Is he/she competent in handling financial matters?
- Can the Guardian afford to pay the school fees for the special child?
- Who will make sure the Funds that you have allocated for your child is well managed?
- Whom can you entrust to ensure the assets you have set aside for your child is not taken or manipulated by unscrupulous third parties?
Golden Age & Healthcare Trust
For singles who have to depend on themselves during old age or for those whose children are staying in overseas or you do not want your assets to be mismanaged by your spendthrift beneficiaries
- You wish to maintain your lifestyle during your golden age
- You do not want your loved ones to be burdened with financial responsibility for your maintenance when you have retired.
- You want to be financially independent to take care of yourself in the event you are disabled or critically ill.
- You do not wish to entrust all your hard-earned assets to your spendthrift children to manage when you are of old age.
- You wish for someone professional to handle all your finances when you are disabled and unable to handle financial transactions.
For a couple that bought insurance policies but nominated each other as beneficiaries. What if both husband and wife pass away in a common tragedy? An insurance trust can help distribute income to your young children
As parents, you too would protect your children. For example, you may purchase insurance so that in case something happens to you while they are young, there will at least be cash to provide for their needs. If you have taken insurance, chances are, you may think that you have done enough in providing security to your loved ones by nominating them as your beneficiaries in your insurance policies. Think again.
Are your loved ones completely protected when you nominate them as beneficiaries in your insurance policies? Is that actually enough? You may want to consider:-
- If your spouse is the sole beneficiary of your insurance policy, what happens to the insurance proceeds upon your spouse’s passing?
- If your young children are the beneficiaries, who should claim the insurance proceeds for them in the event both you and your spouse are unable to?
- Are your beneficiaries mature enough to handle large sums of money?
- Is there someone competent enough to assist the beneficiaries?
For those who want to leave a legacy for charity purpose
You wish to set aside some of your assets for charitable purposes either while you are still around or after you have passed on but need to address some questions in your mind:
- Do you want to ensure that your wishes would be followed?
- You wish to appoint a Trustworthy person who can execute your instructions by determining which charities your assets will be distributed to.
- You wish to make a periodical donation and want to appoint the right person to perform these tasks taking into account the time, perpetuity and expertise required.
- You wish to leave alternative instructions should the charity organisation which you intend to benefit has closed down.
For those who want to create a trust with their investment portfolio to protect their family in case death, total permanent disability & critical illness
- You wish to ensure that the amount of money you wish to give to your loved ones is enough once you have passed on.
- You wish to ensure that the amount is enough to cover your child’s education fees.
- You wish to protect your loved ones from being affected by future high living costs.
- You want to be sure there are enough funds to maintain yourself in the future.
For those who want to retain the property
- You wish to leave your house to your spouse. But your age-old mother is also living under the same roof. You are worried that your spouse may sell off the house leaving your mother with no place to live.
- You have a mentally disabled child. You wish to allow your child to continue to stay in the house during his lifetime.
- You are worried that after you passed away, the creditors of your estate may claim the family home.
Incorporation of a company in Malaysia
The two types of companies that can be incorporated under the Companies Act 1965 (CA 65) are:
- A company limited by shares
- An unlimited company
1. Company Limited by Shares
A company having a share capital may be incorporated as a private company (identified through the words ‘Sendirian Berhad’ or ‘Sdn. Bhd.’ appearing together with the company’s name) or public company ‘Berhad’ or ‘Bhd’ appearing together with the company’s name).
The requirements to form a company are:
(i) A minimum of two subscribers to the shares of the company (Section 14 CA);
(ii) A minimum of two directors (Section 122); and
(iii) A company secretary who can be either :
- An individual who is a member of a professional body prescribes by the Minister of Domestic Trade Cooperative and Consumerism; or
- An individual licensed by the Companies Commission of Malaysia (SSM)
Both the director and company secretary shall have their principal or only place of residence within Malaysia.
A. Incorporation Procedures
1. Application of Name Search
A name search must be conducted to determine whether the proposed name of the company is available. Refer to Government Gazette No. 716 dated 30 January 1997, Gazette (Amendment) dated 11 October 2001, Guidelines For Naming A Company and Guidelines For Application Of A Company Name. The steps involved are:
(i) Completion and submission of Form 13A CA (Request For Availability Of Name) to SSM; and
(ii) Payment of an RM30.00 fee for each name applied.
Where the proposed company’s name is approved by SSM, it shall be reserved for three months from the date of approval.
2. Lodgement of Incorporation Documents
Incorporation Documents (as further explained in Part B below) must be submitted to SSM within 3 months from the date of approval of the company’s name by SSM, failure of which a fresh application for a name search must be done. (Steps (i) and (ii) above shall have to be repeated).
B. Incorporation Documents to be Lodged with the SSM
1. Memorandum and Article of Association
An original of the Memorandum and Article of the association shall each be stamped at RM100.00. Stamps are affixed to the Inland Revenue Board’s stamp office.
- The first directors and secretaries shall be named in the Memorandum and Article of Association.
- The subscribers to the company’s shares shall sign the Memorandum and Articles of Association in front of a witness.
- Table A of the Fourth Schedule in the CA can be adopted as the Article of Association of the company (Section 30 CA).
*NOTE: For incorporation of a private company, the articles of association shall contain the following stipulations.
(i) Restriction on the right to transfer the company’s shares;
(ii) Limitation on the number of members to not exceed fifty;
(iii) Prohibition to an invitation to the public to subscribe the shares/debentures of the company; and
(iv) Prohibition on a public invitation to deposit money with the company.
2. Form 48A (Statuary Declaration By A Director Or Promoter Before Appointment)
The director or promoter declares under oath that:
- He/She is not a bankrupt; and
- He/She has not been convicted and imprisoned for any prescribed offences.
3. Form 6 (Declaration of Compliance)
This declaration states that all the requirements of the CA have been complied with. It must be signed by the company secretary who handles the registration and is named in the Memorandum and Articles of Association.
4. Additional Documents:
- Original copy of Form 13A.
- A copy of the letter from SSM approving the name of the company.
- A copy of the identity card of each director and company secretary.
C. Registration Fees
Each application for the incorporation of a company shall be accompanied with payment as per the schedule following:
|AUTHORISED SHARE CAPITAL (RM)||FEES (RM)|
|Up to 400,000||1,000|
|400,001 – 500,000||3,000|
|500,001 – 1 million||5,000|
|1,000,001 – 5 million||8,000|
|5,000,001 – 10 million||10,000|
|10,000,001 – 25 million||20,000|
|25,000,001 – 50 million||40,000|
|50,000,001 – 100 million||50,000|
|100,000,001 and above||70,000|
D. Certificate of Corporation
A Certificate of Incorporation will be issued by SSM upon compliance with the incorporation procedures and submission of the duly completed Incorporation Documents.
2. Unlimited Company
The procedures and Incorporation Documents for the incorporation of an unlimited company is the same as a company limited by shares. The only difference is that for an unlimited company, the liability of its members must be stated in the Memorandum of Association as unlimited.
Booking a Consultation
Complete our online enquiry form and one of our senior managers will arrange a confidential consultation to discuss your requirements and potential options.
At Sterling Migration, our team are highly acclaimed as ready to manage even the most complex of cases. Our thesis, however, is to keep things as simple as possible. We believe it is important our clients are comfortable and remain in control of their international plans throughout the process. We endeavour to protect our clients best interests while delivering outstanding results.