Why Are So Many Foreigners Moving to Malaysia 2025? New Visa & Low Taxes Explained

Have you noticed more foreigners in Malaysia lately? Whether you’re walking around Kuala Lumpur, visiting shopping malls across the Klang Valley, or working in co-working spaces, it’s hard to miss the rising number of expats and foreign investors. They don’t just look like tourists—many of them actually live in Malaysia, work, or even retire here.

But why Malaysia? What makes this Southeast Asian country such a popular destination for immigrants and foreign investors? And how does this impact Malaysians?

The answer lies in Malaysia My Second Home, also known as MM2H, a visa program that has been drawing expats, digital nomads, and retirees to Malaysia for years. But in 2024, big changes were introduced, making the MM2H program even more appealing to skilled workers, business owners, and investors.

Let’s break down why foreigners are moving to Malaysia, the latest MM2H 2024 updates, and what it means for locals.

Malaysia My Second Home (MM2H) – What You Need to Know

Malaysia My Second Home is a long-term visa program that allows foreigners to reside in Malaysia for up to 20 years. Launched in 2002, the program was designed to attract retirees, expats, and high-net-worth individuals who want to live in Malaysia, invest, or enjoy the country’s high quality of life.

Since its inception, MM2H has generated over RM40 billion in revenue, contributing significantly to Malaysia’s economy.

However, in June 2024, the Malaysian government introduced new immigration rules and categories, making MM2H even more exclusive.

New MM2H 2024 Immigration Rules & Categories

Under the updated MM2H 2024 immigration policy, applicants must now choose from three main tiers:

Silver Tier (Entry Level)

• Fixed deposit requirement: $150,000 USD
• Minimum property purchase: RM600,000
• Visa validity: 5 years (renewable)

Gold Tier (Mid-Level)

• Fixed deposit requirement: $500,000 USD
• Minimum property purchase: RM1 million
• Visa validity: 10 years (renewable)

Platinum Tier (Premium Level)

• Fixed deposit requirement: $1 million USD
• Minimum property purchase: RM2 million
• Visa validity: 20 years (renewable)
• Can work in Malaysia

Special MM2H Program for Johor-Singapore Economic Zone

A new MM2H category was also introduced for foreigners looking to settle in Johor, particularly in the Johor-Singapore Special Economic Zone.

Here, the financial requirements are much lower:

• Fixed deposit requirement: $65,000 USD
• Property purchase requirement: Must buy a property from a developer in Johor

This initiative is expected to revive Johor’s struggling property market, especially in areas like Forest City, which has seen a slowdown in recent years.

The Biggest Advantage – Tax Benefits

One of the main reasons foreigners are choosing Malaysia is the significant tax incentives under the MM2H program.

• MM2H holders pay 0% tax on offshore income, meaning they keep more of their earnings.
• Digital nomads and high-net-worth individuals benefit from tax-free income earned outside Malaysia.
• If MM2H Platinum holders work in Malaysia’s Special Economic Zones, they enjoy a low 15% personal income tax rate, compared to the 30% tax rate that Malaysians pay.
• Businesses that set up within these zones receive a 0% corporate tax rate, making Malaysia a preferred destination for entrepreneurs and investors.

These tax benefits make Malaysia an attractive choice for the wealthy, business owners, and freelancers who want to optimize their income while enjoying a lower cost of living.

Why Are Foreigners and Expats Moving to Malaysia?

Malaysia isn’t the only country with a residency or second-home program, so why is it suddenly so popular among foreign expats, skilled workers, and investors?

Here are the biggest reasons why foreigners are moving to Malaysia in 2024.

No Natural Disasters & Stable Climate

Unlike other Southeast Asian countries, Malaysia is free from earthquakes, typhoons, and volcanoes. Many expats and retirees prefer Malaysia’s tropical climate, which remains warm all year round.

Affordable Cost of Living & High Standard of Living

Compared to Singapore, Hong Kong, Korea, or Western countries, Malaysia offers a much lower cost of living while maintaining a high standard of living.

For example:

• A plate of chicken rice in Kuala Lumpur costs RM8 (~13 CNY).
• In Singapore, the same dish costs RM14 (~21.5 CNY), almost double the price.

Foreigners moving to Malaysia from high-cost countries find that they can enjoy a high quality of life at a fraction of the cost.

Property Investment & Freehold Ownership

Unlike in Singapore, where properties are expensive and mostly leasehold, foreigners in Malaysia can purchase freehold property.

There are also various rental opportunities in major cities like Kuala Lumpur, Penang, Johor, and Malacca, making Malaysia a great destination for investors looking to earn rental income.

Language Advantage & Multicultural Environment

Malaysia is a multilingual country. Most Malaysians speak English, Malay, Mandarin, and Tamil, making it easier for foreigners and expats to adapt and do business.

Thanks to its diverse ethnic composition, Malaysia is also home to a rich mix of Malay, Chinese, Indian, and indigenous cultures.

World-Class Healthcare & Medical Tourism

Malaysia is known for its high-quality healthcare system at affordable prices. Many foreigners visit Malaysia for medical tourism, especially for treatments like IVF, cosmetic surgery, and dental procedures.

For example:

• IVF treatment in Malaysia costs $4,000 USD, whereas in the US, it can exceed $12,000 USD.

International Education & More Singaporeans Studying in Malaysia

More Singaporean families are now enrolling their children in Malaysian international schools, particularly in cities like Kuala Lumpur, Penang, and Johor.

Why?

• Lower tuition fees
• Less stressful education system
• Easy access to nature and outdoor activities

Impact of Expats and Foreigners on Malaysia’s Economy

With more foreigners moving to Malaysia, what does this mean for locals and Malaysians? Let’s look at the pros and cons.

Positive Impact

• Boosts Malaysia’s economy – More foreign investments and spending benefit local businesses.
• Creates job opportunities – Encourages business expansion and employment growth.
• Strengthens the Malaysian Ringgit – Increased foreign capital contributes to financial stability.
• Revives the property market – Higher demand supports developers and landlords.

Challenges & Concerns

• More competition for high-paying jobs – Platinum MM2H holders can work in Malaysia, leading to increased competition.
• Rising property prices – Foreign investment in real estate could make housing less affordable for locals.
• Stronger competition for local businesses – International brands like Mixue, Chagee, and Luckin Coffee are already challenging Malaysian businesses like Tealive and Zus Coffee.

Final Thoughts – Why Are So Many Foreigners Moving to Malaysia?

So, with more foreigners and expats moving to Malaysia, is this a good or bad thing?

If managed well, it could boost Malaysia’s economy, create jobs, and attract foreign investments.
But without proper policies, it might increase property prices, limit job opportunities for locals, and pressure Malaysian businesses.

What do you think? Share your thoughts in the comments.