Looking for a tropical destination, that’s tax friendly, with a low cost of living, and with great travel links throughout Asia? Then Malaysia could be for you.
Malaysia has a variety of different retirement spots to consider, but for most expats 3 stand out:
- Kuala Lumpur – If you’re looking for metropolitan lifestyle with shopping malls and high end restaurants, but still with the hustle and bustle of Asia.
- Georgetown, Penang – One of my favourite Malaysian cities, and very popular with retiring expats. It’s renowned for its foodie culture and offers more of a village feel on the island, but with great travel links from the local airport.
- Johor Bahru – One of the up and coming cities, whilst less developed than the other two, it’s literally a stones throw away from Singapore.
According to Numbeo, the cost of living (including rent) in Kuala Lumpur is 66.6% lower than London, and Penang is 72.6% lower!
Malaysia has two separate climates across the peninsula, with the mountains across the middle dividing the weather.
Johor tends to be cooler and less seasonal. With KL in the north feeling hotter and humid.
The rainy season is officially a few months long, but like most of Asia the weather is very changeable. It’s normal to expect a couple of hours rain each day, but then sunshine the rest of the time (except for peak monsoon season).
Owning Property
Malaysia’s property laws vary from state to state, with minimum purchase prices for foreigners.
These are split across two tears, with a lower minimum for apartments in high-rise buildings, and a higher minimum price for houses (locally called ‘landed’ properties).
In October 2025, for popular areas, the minimum prices for expats to buy where:
| Johor | Kuala Lumpur | Selangor | Penang | |
| High Rise Apartments | RM 1,000,000 | RM 1,000,000 | RM 2,000,000 | RM 1,000,000 |
| Landed Properties | RM 2,000,000 | RM 1,000,000 | RM 2,000,000 | RM 3,000,000 |
Note: RM 1,000,000 is approximately USD 240,0000 / GBP 181,000.
However, some developments also receive special permission for expats to purchase at lower prices than the official minimums.
Tax Advantages
Malaysia operates a territorial tax system. Which means for residents only subject to tax on income or gains sourced in Malaysia, and offers exemption from tax for Foreign-Sourced Income (and gains) remitted to Malaysia.
For individuals – where Foreign-Sourced Income has been subject to tax in another country, or is exempt from tax in it’s country of origin, it is exempt from tax in Malaysia (except for partnership income).
This allows expats to hold their wealth offshore, free of concern about local taxes.
The current Foreign-Sourced Income regime has been extended until December 31st 2036.
Tax Residency
Malaysian tax residency has its quirks. If you’re present in Malaysia for 182 days or more in each year you’re considered resident.
However establishing tax residency in one year, doesn’t automatically mean you are a tax resident in the following year.
Malaysia’s Consecutive Residency Rule means you need to meet the 182 day criteria, 3 years in a row, after which you’ll be considered automatically tax resident in the following year.
Obtaining Long-Term Residence
Malaysia has two routes to obtaining long-term residence, the MM2H Visa, and the
The Malaysia My Second Home (MM2H) Visa
The MM2H Visa allows for long-term residency in Malaysia, with options up to 20 years (renewable indefinitely, 5 years each time).
The programme has existing since 1996, but the criteria changes every couple of years, so it’s worth ensuring what you’re reading is up to date.
There’s a minimum age, but this is unlikely to be an issue. And it allows you to also bring your spouse, parents, and dependents (up to the age of 34).
To maintain your status, you must be present in Malaysia for 90 consecutive days each year.
The latest version of MM2h has no minimum income requirement for MM2H. Qualifying involves purchasing a local property to qualify, and placing a USD fixed deposit in a local bank.
50% of the fixed deposit can be withdrawn from the second year onwards, for the purposes of purchasing a residence, education, medical reasons, or tourism activities within Malaysia.
In 2025, the criteria for each MM2H category is:
| Silver | Gold | Platinum | |
| ‘Participation Fee’ | RM 1,000 | RM 3,000 | RM 200,000 |
| Length | 10 years | 15 years | 20 years |
| Minimum Age | 25 | 25 | 25 |
| Minimum Property Purchase | RM 600,000 (USD 143,000) | RM 1,000,000 (USD 240,000) | RM 2,000,000 (USD 480,000) |
| Fixed Deposit Value | USD 150,000 | USD 500,000 | USD 1,000,000 |
There is an additional category for purchases in Special Economic Zones, like Forest City in Johor. But you’ll likely want to investigate the areas first (google it).
MM2H visa holders can reside in Malaysia, but not work in the country.
The Malaysia Premium Visa Programme (PVP)
The new Premium Visa Programme allows you to qualify based on offshore income.
It’s designed to attract high net worth expats, and their families. It allows you to both live and work in Malaysia, for up to 20 years.
To qualify you need:
- Offshore income of RM 480,000 per year (USD 115,000)
- And, open a fixed deposit account of RM 1,000,000 (USD 240,000)
- And, pay a participation fee of RM 200,000 for the first application, plus RM 100,000 for each dependent.
Again, it’s possible to withdraw up to 50% of the fixed deposit after 1 year, for approved purposes like real estate purchases, medical treatments, or education.
There’s no age limit, and you’re exempt from the usual minimum stay requirement.
