Malaysia is an attractive destination for retirees, offering great weather, natural beauty, a low cost of living, and a favorable tax regime. The country’s British heritage and widespread use of English also make it welcoming for English speakers.
Why Retire in Malaysia?
Malaysia boasts:
- Gorgeous beaches, stunning rainforests, and soaring mountains
- A spectacular capital city, Kuala Lumpur
- Strategic location for travel, with many countries within a 2-3 hour flight
- Minimal capital flow restrictions, crucial for retirees with assets abroad
For US retirees specifically, the Malaysia My Second Home (MM2H) visa program provides a pathway to relocating. The MM2H is a renewable 5-year visa allowing retirees to live in Malaysia with their spouse and dependent children.
Cost of Living in Malaysia
Malaysia is very attractive for stretching retirement funds further. Compared to the US, Malaysia offers:
- 54% lower average cost of living (Numbeo)
- 80% lower rent
Housing, utilities, travel, and day-to-day expenses are all significantly more affordable, allowing a higher standard of living.
Housing Costs
The low cost of living in Malaysia enables a more luxurious lifestyle while still saving money. For example:
- A one-bedroom apartment in central Kuala Lumpur rents for USD $440 – $640/month
- In the KL suburbs, a one-bedroom is USD $270 – $370/month
- In Ipoh, a northern city, rent is only USD $205/month outside the city center
- Equivalent rent in a major US city would be USD $1,600 – $3,600
Buying Property in Malaysia
Foreigners can buy houses in popular areas like Kuala Lumpur, Johor (near Singapore), and Penang island. Prices are dramatically lower than similar homes in the US:
- In Kuala Lumpur, a 1,000-1,200 sq ft home costs USD $220k – $250k
- In George Town, Penang, similar homes are USD $140k – $160k
- Comparable New York properties would cost 7-10x more
There is a minimum property value threshold for foreigners, but it is approx. USD $125,000 in Kuala Lumpur and lower in other parts of the country. This is designed to keep prices affordable for locals.
The buying process involves:
- Researching locations and home types
- Engaging a real estate agent to find properties and guide you through the process
- Making a down payment (approx. 10%) once you’ve selected a home and agreed on price
- Paying stamp duties, legal fees, and processing fees
Malaysian banks offer mortgages to foreigners on terms similar to other countries. The entire process can be completed in as little as 2-3 months.
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Tax in Malaysia
Only income earned in Malaysia is taxed by the Malaysian government. The top marginal tax rate is 30%, typically lower than US tax rates.
Retirees will not pay Malaysian tax on:
- Capital gains
- Interest
- Dividends
- Pensions
- Social security
- Other income from outside Malaysia
There are also no inheritance taxes. Some provisions may allow legally reducing taxes owed in your home country.
Healthcare in Malaysia
Malaysia is known for affordable, high-quality healthcare that meets Western standards. Both public and private healthcare are available.
Visiting a doctor is simple – make an appointment in advance or walk in for a short wait. Costs are reasonable:
- Initial GP or specialist visits: USD $20-50
- Follow-up visits: often less than half the initial consult fee
- Private hospital room: around USD $200/night
There are no long waits for treatment. Prescription drug costs are frequently 1/3 of US prices for the same medication.
MM2H Visa Program
The Malaysia My Second Home (MM2H) program grants a 5-year renewable, multiple-entry visa that allows retirees to live in Malaysia with their spouse and dependent children.
Financial Requirements
To qualify for the MM2H visa, applicants must:
- Make a fixed deposit of approximately USD $210,000 in a Malaysian bank account
- Demonstrate a monthly income of at least USD $8,000
- Obtain health insurance and pass a medical exam
After one year, a portion of the fixed deposit can be used for healthcare, education or real estate in Malaysia. The remainder can be withdrawn if the visa is discontinued.
The MM2H program allows US retirees to enjoy Malaysia’s high quality of life, excellent healthcare, and low cost of living.
Read more about the MM2H program
FAQ
Why should retirees consider moving to Malaysia?
Malaysia offers retirees a warm climate, low cost of living, excellent healthcare, and a favorable tax regime. English is widely spoken, and the country’s natural beauty and proximity to other Asian countries make it an ideal retirement destination.
What is the Malaysia My Second Home (MM2H) visa?
The MM2H visa is a renewable 5-year, multiple-entry visa that allows retirees and their immediate family to live in Malaysia. It is specifically designed to attract foreign nationals looking to settle long-term in the country.
Who is eligible for the MM2H visa?
To be eligible, applicants typically need to make a fixed deposit of around USD $210,000 in a Malaysian bank, prove a monthly income of at least USD $8,000, and pass a medical exam with valid health insurance coverage.
Can I retire in Malaysia as a US citizen?
Yes, US citizens are eligible to apply for the MM2H visa. Many Americans choose Malaysia for retirement due to the low cost of living, English-speaking environment, and high-quality healthcare system.
How much does it cost to live in Malaysia as a retiree?
Malaysia’s cost of living is around 54% lower than in the US. Rent can be 80% lower. For example, a one-bedroom apartment in Kuala Lumpur may cost between USD $440 and $640 per month, and even less outside the city center.
Is healthcare in Malaysia good for retirees?
Yes, Malaysia provides high-quality, affordable healthcare. Private and public hospitals meet international standards. Doctor visits range from USD $20 to $50, and private hospital stays cost around USD $200 per night.
Are there tax benefits for retirees in Malaysia?
Yes, Malaysia only taxes income earned within the country. Foreign income such as pensions, social security, dividends, and capital gains are not taxed. There are also no inheritance or estate taxes.
Can foreigners buy property in Malaysia?
Yes, foreigners can buy property in Malaysia. There is a minimum price threshold, typically starting at around USD $125,000 in Kuala Lumpur. Popular areas include KL, Johor, and Penang.
How long does it take to buy a house in Malaysia?
The process of buying a home in Malaysia can be completed in 2-3 months. It involves selecting a property, making a down payment (about 10%), and paying legal and stamp duties.
Can I use my MM2H fixed deposit to buy property or pay for healthcare?
Yes, after one year on the MM2H visa, a portion of the fixed deposit can be used for healthcare, real estate, or education in Malaysia. The remainder is refundable if the visa is canceled.
Is Malaysia a safe country for retirees?
Yes, Malaysia is considered safe for retirees. It has a relatively low crime rate, modern infrastructure, and a high standard of living compared to its cost. Many expats and retirees live comfortably across the country.
What are the best cities to retire in Malaysia?
Popular retirement destinations include Kuala Lumpur for urban living, Penang for a mix of culture and coastal lifestyle, and Ipoh for its peaceful environment and affordability.
Can I get a mortgage in Malaysia as a foreign retiree?
Yes, many Malaysian banks offer mortgage options to foreigners, including retirees, with terms similar to those available to locals. Approval is subject to eligibility and financial requirements.
Do I need health insurance to retire in Malaysia?
Yes, health insurance is a requirement for the MM2H visa and strongly recommended for all retirees in Malaysia to cover private healthcare services.
How do I apply for the MM2H visa?
You can apply for the MM2H visa through an authorized agent such as Harvey Law Group, who can guide you through every step, from documentation to visa issuance and settlement planning.
