For many Singaporeans, Malaysia is familiar ground. Many of us shop, travel and play in Malaysia. The favourable currency exchange rate between Singapore dollar and Malaysian ringgit also makes it attractive for Singaporeans to head to Malaysia as a nearby travel destination. The close proximity also means that some of us may be familiar with Malaysian working culture through colleagues, clients, suppliers or business networks.
Given the proximity and familiarity of Malaysia and the favourable exchange rate, what about living and retiring in Malaysia?
Read Also: How Much Does It Cost For Singapore Cars To Enter Malaysia? And Is It Worth Your Time (And Money)?
Malaysia My Second Home
Note: at the time of writing, the official MM2H government page is showing an 404 error page. Given the recent Malaysian Parliament change, the MM2H programme may be reviewed.
The Malaysia My Second Home (MM2H) programme is a visa that allows non-Malaysians to retire and live in Malaysia for an extended period. It was suspended during the pandemic and relaunched on 11 August 2021 with more stringent requirements. This is a 5 year renewable visa.
To qualify for MM2H, applicants must meet the following criteria:
- Minimum period of stay of 90 days per year
- Minimum offshore income of RM40,000 per month
- Minimum fixed deposit of RM1.0 million. Up to 50% of the principal amount may be withdrawn for purchasing property, healthcare and children’s education
- Show proof of minimum liquid assets of RM1.5 million
- Letter of Good Conduct for applicant and dependents, if any
Applicants can be either 50 years old and above, or 35 years to 49 years old.
Applicants who are in the age range of 35 to 49 years old are subject to additional requirements:
- the applicant or spouse must be present or reside in Malaysia for a cumulative period of 90 days in each year
- for every dependant (i.e., the applicant’s spouse, children, parents, or parents-in-law), an additional sum of RM50,000 per dependant must be added to the fixed deposit amount. The participant is permitted to withdraw 50% of the principal amount for the purposes of purchasing property, healthcare and education.
Applicants will also have to pay a pass fee of RM500 for each year of the duration of the MM2H pass and a processing fee of RM5,000 for the principal applicant and RM2,500 for each dependant.
Assuming that the exchange rate remains around 1 Singdollar to 3 Malaysian ringgit, the MM2H visa will cost about S$2500 in fees for a single applicant. We would also need to have at least an income of S$13,333, enough cash to place the fixed deposit of about S$333,3333, show proof of liquid assets of at least S$500,000.
The Average Household Expenditure In Malaysia Is About S$1,500 Per Month
Assuming that we secure a suitable visa to retire in Malaysia, we will need to fund our daily cost of living.
According to Department of Statistics Malaysia, the mean monthly household expenditure increased was RM4,534 in 2019, while the median monthly household expenditure was RM3,654 in 2019. The mean Household expenditure in urban areas was RM4,916.
The cost of living in the different places of Malaysia can differ significantly. Specifically, the five states with household consumption expenditure exceeding the national mean (RM4,534) were W.P. Kuala Lumpur (RM6,913), Selangor (RM5,830), Melaka (RM4,955), Johor (RM4,793) and Penang (RM4,630). These are also states that are popular among Singaporeans.
Living in urban areas will be spending more on housing, water, electricity, gas and other fuels (24% of household expenditure) while moving to rural areas will mean spending more (24.4% of household expenditure) on food and drinks (non-alcoholic beverages).
Assuming we live as a typical Malaysian household in Johor, we would expect to spend about S$1,600 monthly. However, this may not be the case as we may have different lifestyle preferences that can affect our household expenditure.
In comparison, Singaporean households spend about S$4,906 monthly, according to the Household Expenditure Survey 2017/18.
Cost of Living In Johor Is Higher
Just across the Causeway, Johor is the closest Malaysian state to Singapore. For Singaporeans, planning to retire in Malaysia but don’t want to give up the proximity to Singapore, this may be a suitable choice.
However, Johor’s average household expenditure (including housing) is slighter higher at RM4,793 than the national mean at RM4,534. Housing costs account for RM1,092 of monthly expenditure, followed by RM812 for food and non-alcoholic beverages.
However, do note that foreigners cannot purchase property below RM1 million valuation and additional state-specific rules apply for property purchases. This means that as a foreigner retiring in Malaysia, we are likely to incur much higher housing costs.
The closest administrative district to Singapore, Johor Bahru, also has the highest monthly household expenditure within Johor. Thus, if we plan to live in JB, we can expect to incur higher costs. In return, we gain the convenience of returning to Singapore easily via the land checkpoints.
Read Also: Shopping Across the Causeway: 12 Things You Can And Cannot Buy
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