Donal Crotty, the general manager of the Irish Chamber of Commerce in Malaysia, said most MM2H holders would not be able to meet the income and asset distribution requirements.
“I foresee many of them having to pack up and leave,” he said.
The new requirements, announced recently by the home ministry, include permanent savings of at least RM1 million and a declaration of liquid assets of at least RM1.5 million. Previously, participants needed to have savings of between RM300,000 and RM500,000.
An MM2H holder must now have an offshore income of at least RM40,000 a month, up from RM10,000 per month.
Crotty said only an expatriate at the peak of his career would earn the equivalent of RM40,000 a month.
“Many MM2H holders are actually people who have come here to settle down. The name of the programme implies Malaysia is a second home, but for many, it is now home rather than a second home and a place where they have chosen to retire.
“They have left their countries, invested in homes, cars and a new life here. They are part of the community and they don’t have the kind of money the new rules demand. Essentially, they’re being shown the door and have nowhere to go back to.”
Crotty said MM2H rules had been fairly reviewed before this in line with changing times, but he saw the newest rules as a “complete shifting of goalposts”.
Home ministry secretary-general Wan Ahmad Dahlan Abdul Aziz recently said improvements to MM2H were part of the national recovery plan, which aims to kickstart the economy after more than one-and-a-half years of lockdowns and movement restrictions.
But Crotty said the new rules were counterproductive to economic recovery, especially if they were to push many of the 57,000-odd MM2H holders out of the country.
“It’s not just about the consumption and spending of MM2H holders in the country. Many MM2H holders are influential in promoting the country to businesses in their countries of origin.
“Embassies and foreign chambers of commerce often connect would-be investors to MM2H holders as many have expertise and also knowledge of the country and local culture,” he said.
He questioned whether the government had studied the economic consequences of the new rules.
“Beyond the immediate loss of dollars and cents, there is a need to consider how such a massive and sudden change in policy will have on Malaysia’s attractiveness as an investment destination,” he said.
“The government must think about the signals this move will send to the international community. In this Covid-19 era, stability is more important than ever to businesses and investors, and that means stability in laws and policies, not just who is the government of the day.”