150 billion reasons why MM2H reform may not happen

Malaysia's My Second Home (MM2H) programme is overdue for a review of its eligibility criteria — but a look at the underlying economics suggests policymakers have little incentive to loosen them anytime soon.

Tourism, Arts and Culture Minister Tiong King Sing has announced a review of MM2H following a 90% collapse in applications. So far, the changes under discussion focus on streamlining the application process rather than revisiting the eligibility thresholds themselves — which lines up with the financial incentives at play.

What triggered the collapse

The previous government's overhaul of MM2H's financial requirements is widely blamed for the drop-off. Applicants must now show:

• A minimum of RM1.5 million in liquid assets
• A fixed deposit of RM1 million
• Monthly income of RM40,000 — four times the previous threshold

For a retirement-focused scheme, these numbers are steep. Most retirees don't have RM40,000 a month in income; the old RM10,000 threshold was closer to a realistic pension. The RM1.5 million liquid-asset requirement isn't especially attractive either — a fixed deposit earns modest interest, and many prospective applicants would rather put that capital into property, which doesn't count as a liquid asset under the rules.

Compared to similar retirement-residency schemes in the Philippines, Thailand, Portugal or Greece, the revised MM2H terms are no longer competitive.

What MM2H has historically earned

Industry estimates put MM2H's cumulative revenue at roughly RM40 billion between its 2002 launch and 2018 — or as high as RM58 billion through 2019, once housing-related investment is factored in. Then-minister Nancy Shukri put annual MM2H revenue at RM2.7 billion in 2018 and RM2.5 billion in 2019.

Extrapolating a 90% drop from that baseline implies MM2H now generates only around RM260 million a year — a shortfall of roughly RM2.3 billion annually, or about RM9.4 billion cumulatively across 2020–2022.

Why PVIP looks better to policymakers

The Premium Visa Programme (PVIP), introduced for high earners, is the other half of the story. It's capped at 300,000 places, but at RM200,000 per principal applicant and RM50,000–RM100,000 per dependant (a family of four would pay around RM500,000), it raises money far faster than MM2H ever did.

If every PVIP place were taken by a single applicant, that's RM60 billion; if every applicant brought a family of four, it rises to RM150 billion — versus roughly RM40 billion accumulated by MM2H over two decades. PVIP's target applicants also tend to bring more capital: those seeking a second or third residency to diversify risk, often from markets like Russia, China or the Middle East, with no age restriction limiting who can apply.

MM2H's older, retiree-heavy applicant base brings in comparatively less — they're more likely to rent than buy, and the programme doesn't permit them to work or invest in local businesses.

What this means for the reform outlook

The economics point to a straightforward, if uncomfortable, conclusion: PVIP earns the government more money, faster, so there's limited financial incentive to make MM2H competitive with it again — doing so risks applicants choosing MM2H over PVIP instead. The current government inherited these rules from its predecessor, but any meaningful reform will have to contend with the fact that RM150 billion raised quickly from PVIP is, from a policy perspective, a hard number to compete with.

Source: Free Malaysia Today