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Why retire to Malaysia?

February 1, 2012

1.2.12

Malaysia, particularly Penang,  is a great place to retire to.

A beach in Penang near where I once lived

I am often asked, either by locals in Malaysia, or other people when I am travelling, why we chose Malaysia.  Here are some of my criteria for choosing a country, in no particular order:

  • warm and sunny
  • close to the beach
  • affordable
  • retirement visa conditions reasonable
  • freedom
  • safe / low crime
  • convenient for travel abroad
  • easy for friends to visit
  • good food
  • language learnable or English widely understood
  • culture
  • health insurance / health system good
  • expat community

Malaysia rates well on most of them.   Some countries are obviously better for some categories, but on balance we chose Malaysia.  As for where in Malaysia – we thought the main choices were:

  • Langkawi-it’s duty-free – but apart from that and its beaches it doesn’t tick enough boxes;
  • Penang – a smallish tropical island seemed to be the best compromise;
  • Kuala Lumpur- quite good on some aspects, but no beaches, gridlock traffic and more expensive;
  • Melaka – nice but quite small;
  • and the east coast – much less developed, very Islamic to the extent you can’t even get  beer easily in many places, not much western culture, and not many expats.

So how is Penang with regards to those criteria? Sure, it’s warm, often hot, and often sunny, and when there are  few cool days it’s quite a relief.

There are certainly beaches, and it’s easy enough to live very close to one, but swim at your peril – I’m talking jellyfish and pollution.  A little effort would solve these problems, but none is made.  Beaches, however, if you choose the right ones, are nice to walk along, or relax on.  Choose the wrong one and you’re knee-deep in rubbish.

Life is affordable.  I suppose it costs about 20% of the cost of living in London. Cars and alcohol are highly taxed, however.  If you get a MM2H visa, you may buy or import one car duty-free, which eases the pain.

Condo facilities can be quite good

The Malaysia My Second Home (MM2H) retirement visa is quite good – probably only the retirement visa for Panama is better.  There are good visa agents who will do all that is necessary so it is quite painless to apply.  However, the government is always tinkering with the details, sometimes for the better, and sometimes not, so it’s difficult to elaborate.

One feels more freedom than in western countries nowadays – but read the local newspapers and you may not be so sure.  So best stay away from the papers.

The main crime affecting expats is bag snatching – be aware of two people on motorbikes if you are walking.  The pillion passenger can snatch a bag and they make off.  The main danger here is simply the horrendous driving.  I do feel since I have been here drivers are becoming a little more courteous, however.

One can fly directly abroad from Penang, although it is often necessary to go via KL, Bangkok or Singapore for longer haul flights. The airport is small and fairly close, so travel is quite convenient.

Malaysia is somewhere in between Europe, Japan, and Australia, so it’s relatively easy to visit or be visited – those locations are important to us.

Food is good, cheap, and there is a huge variety due to the mix of races in this country. Best of all is the tropical fruit.

English is very widely understood so that learning any other language is unnecessary. The local languages are Bahasa, Hokkien Chinese, and Tamil.

As for culture, there is plenty of local culture and frequent festivals; western culture is much thinner on the ground.

Locally bought health insurance is affordable, and the standard of health care is good.   A visit to a doctor costs about GBP6, so there is little need to use insurance for this.

Penang has a quite a big expat community, and there are various associations one can join if one wishes.

After almost four years here, this is my list of good and bad things here:

GOOD
Low cost of living
No tax on International income, or income originating abroad and brought to Malaysia
Relatively free
Not persecuted for driving, as one is in the UK, US, Australia
Tropical fruit
MM2H visa quite good
Low crime
Warm
Between Europe, Japan & Australia
Low cost of flights
Honesty and friendliness of people
English very widely spoken
Common law legal system
Political stability
Malaysia has oil and plenty of water

BAD
Many things not available to buy – but it is improving slowly
Information is hard to get locally
Slow internet
Appalling driving
No infrastructure for cycling/walking
Alcohol and cars expensive
Jellyfish and often pollution in sea means you wouldn’t want to swim
Littering seems to be a hobby for many

And where else did I consider? Thailand. The bad points were, inter alia: lack of political stability, civil law legal system, retirement visa not so good, and hard to buy freehold property.  Indonesia & Philipines: not as safe, and less developed. Panama, Ecuador, Uruguay – geographically not so convenient for me.

International Living magazine in 2012 rated Malaysia fourth best place to retire – behind Ecuador, Panama and Mexico (source The Expat). I subscribed to International Living  for many years, and it’s a good magazine, but it is slanted towards Americans, which may have influenced the ratings.

As a paying customer of the country, I can of course, move on if conditions deteriorate.  But in many respects I have noticed Penang is improving.  It has become a World Heritage site, and many rundown buildings have been renovated and spruced up, the variety of restaurants has increased, some footpaths are appearing enabling one to walk, a cycling path around the island is promised, a new bridge to the mainland is being built,  hygiene and English levels are improving, even some awareness of the health dangers of MSG in food is occurring.

It is actually much nicer living here than visiting as a tourist, so coming for a quick look, although necessary, can be deceptive.  It is easy to stay here and rent a condo on a tourist visa, making a short trip every three months to a nearby country, so that when you return you will have another three months visa.  Many people do this for years.  This way you can make little commitment and decide if it is for you. And you can travel the country and find your favourite location. You will also know what you should ship here if you decide to get the MM2H visa, and what you won’t need.

So, give it some thought.  You can afford to retire much earlier than you may have thought if you choose Malaysia.

View from condo balcony

Tropical Expat

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4 Comments
  1. Ron Tall permalink

    Very interesting that your list of factors is pretty close to mine. My wife and I have vacationed a few times in Thailand and love it but the retirement visa you can get in Malaysia is so much better. We’re planning a trip to Malaysia in the next 6 months and will be looking at Penang & KL area. Also considering Mexico due to convenience to U.S. but crime and safety is a serious concern. thanks for the info.

    • Sorry, I have been away travelling. Yes, I also like Mexico, but proximity to the US isn’t an advantage to me. Mexico is quite big, so I suppose there are also safe areas. In Malaysia, many people have told us that Johor Baru is unsafe – so I have never been there. Generally, Malaysia is quite safe, apart from the driving.

  2. The catch appears to be you are taxed. In fact, you are taxed on your worldwide income. http://www.taxrates.cc/html/sri-lanka-tax-rates.html gives you the tax rates. To get the visa, one of the requirements appears to be that you transfer USD$1500 per month to Sri Lanka, for one individual. That is about LKR200,000 per month, or 2,400,000 per annum. There is an allowance of 300,000, so you would be taxed 25% of 2,100,000. If you are in Sri Lanka fewer than 183 days a year, it will “only” cost you 25% of this LKR2,100,000, which is about USD$4,000. If you stay longer than 182 days you are deemed resident, and taxed on income you have worldwide. My apologies in advance if I got these very approximate figures wrong. But if I am correct, this is a very expensive place to be a resident as a retiree. Better to go for an extended holiday and renew your tourist visa until the maximum, if Sri Lanka is a good place to be.

  3. I haven’t yet investigated Sri Lanka, but hope to next year. In Thailand, Hua Hin or Songkhla, perhaps.

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