Living in Malaysia as an Expat: KL, Penang, Johor and the MM2H Visa

Malaysia has long been one of Southeast Asia's most popular choices for Western expats — and for good reason. The combination of territorial taxation (no tax on foreign-sourced income), no capital gains tax, a relatively affordable cost of living by international standards, excellent private healthcare, strong international schools, and a comfortable English-language environment makes it genuinely hard to argue against from a lifestyle and financial perspective.

The flagship Malaysia My Second Home (MM2H) programme — though significantly revised and tightened since its original incarnation — remains one of the region's most established long-stay visa programmes for internationally mobile HNW individuals.

Where to Live

Kuala Lumpur (KL) is the capital and commercial heart of Malaysia. The expatriate community is concentrated in a corridor running from the KLCC (twin towers area) through Mont Kiara and Hartamas to Damansara Heights and Bangsar. Mont Kiara is particularly popular with families — it has a dense cluster of international schools, serviced apartments, restaurants, and a well-established Western and East Asian expatriate community. Bangsar and Damansara Heights are more established, quieter, and favoured by professionals who prefer proximity to the city centre.

Penang (Georgetown) is an island state on the northwest coast, a UNESCO World Heritage site and one of Asia's great food destinations. It has historically attracted retirees and lifestyle-driven expats — the cost of living is lower than KL, the pace is more relaxed, and the island's heritage shophouses, beaches (Tanjung Bungah, Batu Ferringhi), and food scene are exceptional. The MM2H programme was particularly associated with Penang as a retirement destination.

Johor Bahru (JB) is at the southern tip of the Malay peninsula, linked to Singapore by two causeways. Many Singapore-based professionals choose to live in JB (specifically Iskandar Malaysia — Medini, Puteri Harbour, Danga Bay, Horizon Hills) and commute across the border to benefit from Singapore salaries but Malaysian cost of living. The Forest City development, though battered by slow take-up, continues to develop. JB has improved markedly in infrastructure and amenities over the past decade.

Kota Kinabalu (Sabah) and Kuching (Sarawak) on Borneo are smaller but well-regarded by nature-focused expats and retirees. Less urban, extraordinary natural surroundings, lower costs.

The MM2H Visa

Malaysia My Second Home (MM2H) is a long-stay visa programme allowing foreigners to live in Malaysia on a renewable five-year (previously ten-year) multiple-entry social visit pass. It is not a work permit; holders may not earn income in Malaysia without a separate work authorisation.

The programme was suspended in 2020 and relaunched in 2021 with significantly tightened financial requirements. As of 2026, the primary tier requirements are broadly:

• Minimum offshore monthly income of MYR 40,000 (approximately GBP 7,000 at 2026 rates)
• Minimum liquid assets of MYR 1,500,000 (approximately GBP 265,000)
• Fixed deposit in a Malaysian bank of MYR 1,000,000
• Medical insurance coverage in Malaysia
• Medical examination clearance
• Clean criminal record certificate

These are substantially higher than the pre-2020 requirements and have reduced the programme's attractiveness for retirees with modest incomes. For HNW individuals, the financial thresholds are not a barrier; the programme remains valuable as a long-term Southeast Asian base.

There is also a Premium Visa Programme (PVIP) launched in 2022, targeting higher-net-worth individuals with a fixed deposit of MYR 1,000,000 and an annual fee of MYR 200,000. PVIP holders can work in Malaysia with a separate endorsement.

A DE Rantau digital nomad pass is also available for remote workers from outside Malaysia, valid for 12 months (extendable to 24). Requirements include proof of remote employment and a minimum annual income of USD 24,000 (for tech/digital roles; higher thresholds apply to non-tech roles).

Taxation

Malaysia operates a territorial tax system. Foreign-sourced income received in Malaysia is generally exempt from income tax, though this was partially revised in 2022: foreign-sourced income remitted to Malaysia from 1 January 2022 is subject to tax for tax-resident individuals, with certain exemptions (dividends from foreign sources remain exempt in many cases; detailed rules apply).

For MM2H holders and non-working residents, the practical position depends on source of income and whether it is remitted. Malaysian income (if any) is taxed at progressive rates up to 30%.

Malaysia has no capital gains tax on personal investments (shares, funds). A Real Property Gains Tax (RPGT) applies to property disposals; the rate depends on the holding period, with exemptions available after five years for certain categories.

No inheritance/estate tax in Malaysia.

Malaysia has a double taxation agreement with the UK. Professional advice from a Malaysian tax adviser is recommended, particularly regarding the remittance rules that came into effect in 2022 and their impact on investment income.

Healthcare

Malaysia's private healthcare sector is excellent and remarkably affordable by international standards. Major private hospital groups include:

• KPJ Healthcare — largest private hospital group; facilities across the country
• Pantai Hospital — premium facilities in KL (Pantai Bangsar, Pantai Cheras); part of IHH group
• Gleneagles Hospital KL — part of Parkway Pantai (IHH); high-end specialist care
• Prince Court Medical Centre — boutique specialist hospital in KLCC; popular with business travellers and HNW patients
• Island Hospital and Gleneagles Penang in Penang

Specialist consultants, elective procedures, and most acute care are available to a genuinely high standard and at costs that are typically 30–60% below equivalent procedures in the UK or Australia. Malaysia is a leading medical tourism destination in Asia.

International health insurance is the norm for expatriates. Bupa, Cigna, and AXA all have established Malaysia products.

International Schooling

International schools in Malaysia are concentrated in KL and Penang, with more limited options in JB.

In KL, leading schools include Garden International School, Mont Kiara International School, Alice Smith School, HELP International School, and ELC International School — most offering British/IB curricula. French and Japanese schools serve specific communities. Fees range MYR 30,000–100,000 per year, with higher-end institutions at the top of this range.

In Penang, Dalat International School (US curriculum) and Uplands International School (British) are the principal options.

There is a legal framework governing international schools in Malaysia: children who are Malaysian citizens cannot enroll in international schools (they must attend national or Chinese/Tamil vernacular schools). This does not affect expat children with foreign passports.

Cost of Living

Malaysia is affordable by the standards of Singapore, Hong Kong, or European capitals.

• Rent: MYR 5,000–15,000/month for a well-located three-bedroom condo in Mont Kiara or KLCC; higher for luxury developments. Penang is significantly cheaper.
• Food: dining out is excellent value — a quality meal for two at a good KL restaurant costs MYR 100–350; hawker centres deliver outstanding food for MYR 15–25/person.
• Cars: imported cars carry high excise duties and are more expensive than the UK. Local Proton/Perodua models are affordable.
• Healthcare: private GP consultation MYR 50–150; specialist outpatient MYR 200–500.

A comfortable upper-tier lifestyle for a family of four — international school fees, private healthcare, a good condo, car, and regular eating out — can be managed for MYR 25,000–50,000/month.

Banking Access

Major Malaysian banks — Maybank, CIMB, Public Bank, RHB, and Hong Leong — serve expatriates. HSBC and Standard Chartered also operate in Malaysia with strong international transfer capabilities. Account opening requires MM2H or employment pass documentation.

MM2H holders must open a fixed deposit account as part of the visa requirement, which effectively establishes a banking relationship. International private banking relationships (e.g., HSBC Premier, Citibank) are available to qualifying HNW clients.

Practical Tips

• Language: Bahasa Malaysia is the official language; English is widely spoken in business, shopping, and urban daily life. KL and Penang are very English-friendly.
• Climate: hot and humid year-round, with two monsoon seasons. KL receives rainfall throughout the year; Penang's northeast monsoon (November–January) can bring heavy rains to the north coast.
• Religion: Malaysia is a Muslim-majority country; alcohol is available in restaurants, supermarkets, and expat-oriented establishments, but is more expensive than in the UK due to duty. Pork is available in Chinese establishments and supermarkets.
• Driving: left-hand drive (same side as UK). Traffic in KL is heavy; Grab (ride-hailing) is excellent and widely used.

Compliance note: The MM2H programme's terms, the tax treatment of foreign-sourced income, and other regulations have changed significantly in recent years and may continue to evolve. This guide is informational only. Always seek qualified Malaysian legal and tax advice before relocating.

How Global Investments Can Help

Global Investments works with UK expats and HNW individuals considering Malaysia as a long-term base. We can advise on the MM2H application process, connect you with specialist Malaysian tax and legal advisers, and discuss Malaysia's property investment landscape as part of a wider Southeast Asian portfolio strategy. Contact our team for a confidential discussion.