FLUCTUATING economic trends can be both a boon and bane. Challenges create opportunities and new initiatives, and a good example is the Malaysia My Second Home (MM2H) programme which has been revamped to generate more economic spinoffs, particularly in the areas of real estate.
The Malaysia My Second Home Programme was started in 2004 basically to boost tourism, encourage foreign senior citizens to apply for long stays, buy homes and cars in the country.
The initiative has apparently proven rather successful with participants of the programme bringing in substantial revenue over the past half decade or so.
According to tourism statistics made available during the rebranding of the programme, MM2H participants had – within a span of five years – bought homes, valued at over RM4 billion, and nearly 1,500 locally-assembled cars nationwide.
As the momentum was picking up, it had rightly been decided that the long-stay programme should not be confined only to its ‘tourism value’ but also be better leveraged for the economic returns.
As such, rebranding of the MM2H includes positioning it ‘as an economic and investment-generating initiative to attract high net-worth individuals to set up businesses or joint ventures with local entrepreneurs.
As incentives, participants can now invest actively in Malaysia and those above 50 years old can work in critical sectors of the economy where locals lack the expertise or experience – subject to the approval of an expatriate committee.
Other key improvements include giving foreign spouses of Malaysian citizens the option of staying in the country under the long-stay programme. Approved participants will be granted social visit pass lasting a number of years.
Malaysia appears to be making it easier for skilled and wealthy foreign nationals to obtain permanent residency because of the global economic situation and more significantly, competition from other markets.
These are uncertain economic times – brought on largely by the financial crisis in the Eurozone and a moribund US economy – and it is anticipated that foreign direct investments into the country might slow somewhat in the new year and the property sector has also declined with soaring prices as investors cash out or wait on the sidelines for recovery.
Unlike more vibrant markets in the region, Kuala Lumpur lacks a big pool of expatriates to occupy the many apartments coming up in the city.
To address some of these issues and accelerate the change to a k-economy, the government had, as part of the revamped MM2H programme, announced it would offer permanent resident status to high net-worth individuals who brought more than US$2 million (RM7.2 million) into the country for investments or savings. The same consideration would be made for ‘highly skilled foreign professionals’.
The financial requirements for MM2H applicants are lower. In line with the revamp, those below 50 years old are required to show proof of liquid assets worth at least RM500,000 while those older than 50 must have a minimum RM350,000.
In the main, the MM2H has attracted retirees, many drawn by the lower cost of living, food and English-speaking population.
Given the growing retiree population in Japan, Korea, Taiwan, US, Europe and China, the programme could be intensified to attract participants from some of these source countries.
A substantial number of foreign applicants have been approved. China topped the list followed by Bangladesh, the United Kingdom, Japan and Singapore.
Sarawak has its own programme, and hopefully, the same, if not better, terms will be offered to get senior citizens from many countries to apply for long stays and bring in their money to be spent on things such as homes and cars. Businessmen too can be encouraged to join the programme and they can set up businesses either on their own or with local partners.
Hopefully, the state will seek to modify or make changes, where necessary, to its own programme in consonance with the revamped MM2H inititaive in an endeavour to generate more spinoffs for the local economy.