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Retire in malaysia: A Comprehensive Guide US Retirees

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retirement in malaysia Retire in malaysia

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

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:

  1. Researching locations and home types
  2. Engaging a real estate agent to find properties and guide you through the process
  3. Making a down payment (approx. 10%) once you’ve selected a home and agreed on price
  4. 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.

Taxation

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

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

ABOUT THE AUTHOR

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Jean-François Harvey

Jean-François Harvey is recognized internationally as an expert in immigration law, and he brings a wealth of experience in providing comprehensive immigration law services to corporations and high net worth individuals.

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