An expat guide to living in Malaysia

Around 250,000 expats live in Malaysia, of which 16,000 are British nationals. With high economic growth, low crime rates and enticing tax incentives, Malaysia has become a ‘hotspot’ for expats. Western expats find their money goes further in Malaysia, where living costs around half as much

compared to the UK or USA. And what’s more, Malaysia has been ranked among the world’s most competitive nations, with a booming economy fuelled by exports and low levels of taxation. If you are considering moving to Malaysia to live and work, our comprehensive guide will help you with everything you need to know.

Can I move to Malaysia permanently?

British nationals will need a visa if they intend to stay in Malaysia for more than 90 days. Permanent residency can be acquired through the Malaysia Entry Permit, which is a route available to investors, professionals, recognised experts, and spouses of Malaysian citizens or by meeting points-based criteria.

Expats looking to retire in Malaysia might consider the ‘Second Home Programme.’ The government scheme provides for foreign nationals and their dependents to permanently relocate to Malaysia on the basis they deposit money in a Malaysian bank, and keep it there. The visa is renewable on a 10-yearly basis and typically does not allow visa-holders the right to work.

Malaysia also offers many work visas, including a ‘digital nomad visa’ for foreigners looking to work remotely from the country. The renewable visa allows for stays of between three and twelve months. It caters to IT and digital sector workers, legal professionals, writers, business managers, and more.

Western workers might also want to consider the ‘Professional Visit Pass’ permit, a one-time entry visa for those employed by a foreign country, film crews and volunteers, among other selected categories.

For a complete list of available visas, work permits, and routes into Malaysia, visit the Malaysian government website.

What salary is needed to live comfortably in Malaysia?

Malaysia has a much lower cost of living than in the West, as well as a lower tax burden, so professionals and retirees can often enjoy a high standard of living for less money. As per International Living data, a couple residing in the Penang region, would pay just $900 per month on rent, and $200 on groceries. Their entire monthly expenditure, including employing a maid four days each week and eating out five nights per week, would reportedly cost just $1,704.

According to William Russell, the average cost of rent in Malaysia is almost 70 per cent cheaper than in the UK. Even in the capital, Kuala Lumpur, rents are 80 per cent more affordable than in London and nearly 90 per cent cheaper than in New York, with the average price of a three-bedroom apartment in a city-centre setting costing just $655 per month.

However, expats should be aware that they may face unexpected costs, such as education. Malaysia’s public school system is available only to its citizens, so foreign nationals will likely need to enrol their children in an international school. The cost of private education in Malaysia, particularly in international schools, can be very high. While the standard of the education provided is said to be high, it often also has a price tag to match. Soaring education costs are leading more families to consider planning for their children’s education so that they can enjoy the best schooling possible. Expats should also consider the cost of healthcare in Malaysia.

Is healthcare free in Malaysia?

Healthcare is not free for expats in Malaysia. While Malaysian citizens benefit from heavily subsidised healthcare services funded by their income taxes, these benefits are not extended to expats. Consequently, expats in Malaysia are required to pay the total price for medical services unless they have private health insurance.

Malaysian citizens enjoy access to heavily subsidised healthcare through public facilities. This system, while not free, significantly reduces medical costs for citizens, making healthcare affordable. Citizens typically pay very low fees for medical services, such as RM50 to RM200 ($12 to $48) for a doctor’s visit. This affordability is due to the government’s substantial subsidies supported by general taxation.

Expats need to have private health insurance in Malaysia because they do not qualify for the subsidised healthcare rates provided to citizens. Without insurance, expats would need to cover all healthcare expenses out of pocket, which can be costly. The Malaysian healthcare system is well-regarded for its quality, ranking 49th globally according to the World Health Organization.

Enrolling in the Foreign Worker Hospitalisation and Surgical Scheme is mandatory for expats working in Malaysia. This scheme, funded by a 1.25 per cent deduction from monthly wages, provides essential cover for hospitalisation and surgical needs. Employers are typically responsible for enrolling their foreign employees in this scheme. However, non-employed expats are not legally required to have health insurance but are strongly encouraged to obtain it for peace of mind and financial protection.

Malaysia boasts a high standard of healthcare, with well-trained specialists and modern facilities, especially in major cities. The country is also a popular destination for medical tourists due to its quality care and affordable prices. However, rural hospitals may lack resources and adequate staff, making urban centres the preferred choice for more comprehensive medical care. English is widely spoken by medical professionals, which eases communication barriers for expats seeking medical services.

While Malaysia provides affordable healthcare services to its citizens through a subsidised system, these benefits do not extend to expats. Expats must rely on private health insurance to manage their healthcare costs effectively. Whether through international or local providers, having insurance is essential for ensuring access to quality medical care without facing exorbitant out-of-pocket expenses. The Malaysian healthcare system is highly regarded, but the lack of subsidies for expats makes insurance a crucial aspect of living in Malaysia as a foreigner.

What are the tax advantages of moving to Malaysia?

Malaysia has many attractive qualities for expats, such as a low cost of living, safe streets, a bustling economy, and a competitive tax environment. Malaysia offers several tax exemptions for expats and has a double taxation agreement with the UK, the US, and other countries, so you shouldn’t be taxed twice on the same income.

The tax environment can be particularly attractive to remote workers, where existing measures provide for low, or in some cases, no taxes on foreign income, subject to exemptions and rules. Companies and investors should also consider the Investment Tax Allowance, which provides an allowance of 60 per cent on qualifying capital expenditure, as well as the so-called Pioneer Status, which gives qualifying companies a five-year partial exemption from income tax.

For more information on remaining tax efficient, speak to a qualified financial advisor.

Is Malaysia a good destination for expats?

Malaysia offers expats a vibrant and welcoming environment, combining a low cost of living, high-quality healthcare, and enticing tax incentives. With around 250,000 expats, including 16,000 British nationals, Malaysia has become a sought-after destination for those seeking new opportunities or a comfortable retirement.

Malaysia’s thriving economy makes it appealing to workers from across the world while at the same time providing a high standard of living at a fraction of the cost compared to Western countries. While expats need private health insurance to access affordable medical care and should consider the costs of private education, the overall quality of life remains high.

Malaysia’s comprehensive visa options, including those for digital nomads and retirees, make it accessible for various needs. With friendly locals and a safe environment, moving to Malaysia can be a fulfilling and advantageous decision for many expats. For those considering this move, thorough preparation and understanding of healthcare, education, and tax obligations will help ensure a smooth transition.