This article provides an update on the Malaysia My Second Home (MM2H) program, specifically concerning recent announcements regarding Special Economic Zones (SEZ). Recent developments have caused confusion and concern among potential applicants, particularly regarding eligible areas outside of Forest City.
MM2H Briefing and SEZ Designation
On March 27th, the Ministry of Tourism Malaysia (MOTEC) held a briefing on the MM2H program. A key takeaway from the briefing was the initial lack of a definitive list of approved areas for the SEZ category within MM2H. Currently, Forest City is the only confirmed location within the Special Financial Zone (SFZ).
Concerns Regarding Forest City Exclusivity
Misinterpretations arose, leading some to believe that only Forest City properties would qualify under the MM2H SEZ/SFZ categories. This has generated significant concern among potential applicants who are interested in properties outside of Forest City.
Clarification from MOTEC and Johor State Government
MOTEC has clarified that they are seeking guidance from the Johor State Government regarding the inclusion of other areas within Johor, particularly those near Johor Bahru, as part of the SEZ list. Because MOTEC is a national ministry, the Johor state government is responsible for defining the specific parameters for the SEZ areas. The Ministry of Tourism Malaysia has requested that the Johor State Government provide them with a complete list of locations that fall into the SEZ area
Expect Delays and Waiting Period
Applicants are advised to remain patient for several months as these discussions and clarifications take place. It is believed that efforts are underway between MOTEC and the Johor State Government to resolve this issue.
Impact on Existing Applications
Many applications have already been submitted for MM2H, based on property values in areas outside Forest City, such as Medini, Putrajaya Harbour, JBC Centre, and Danga Bay. MOTEC is aware of these applications and has indicated that they will grant extensions to applicants whose properties are outside Forest City while the SEZ area definitions are finalized.
Confidence in Broader Area Approval
There is confidence that most existing properties purchased by foreigners in established areas such as JBC Centre, Danga Bay, Medini, and Putrajaya Harbour will ultimately qualify under the revised SEZ guidelines. Time is needed to allow the relevant authorities to complete the necessary procedures.
Addressing the Confusion
The current situation highlights potential shortcomings in Malaysian government bureaucracy. Ideally, the SEZ designations should have been clearly defined prior to accepting applications. However, it appears that certain steps were overlooked in the initial planning phase.
Potential Solution: Address or Postal Code-Based Designation
Determining which properties qualify under the SEZ could be challenging, given the large number of projects in Johor Bahru. A simpler approach may involve using addresses or postal codes to define the boundaries of the SEZ, making it easier for MOTEC and the Johor State Government to manage.
Johor's Chief Minister and SEZ Boundaries
Johor's Chief Minister, Dato' Onn Hafiz, has repeatedly stated that the SEZ essentially encompasses the entire Iskandar Malaysia Johor Bahru and Desaru Pengerang regions. It would be surprising if the final definition were to be limited solely to Forest City. Furthermore, it's understood that various parties, including the private sector and the Sultan of Johor, support the inclusion of more projects beyond Forest City.
Recommendations for Potential Applicants
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Stay Informed: Monitor updates from official sources and consult with MM2H agents for the latest information.
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Consider Johor Bahru: If unfamiliar with Johor Bahru, use this time to explore the area and familiarize yourself with potential investment opportunities.
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Be Patient: The situation is expected to be resolved in the coming months. Avoid making hasty decisions based on incomplete information.
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Existing Applicants: Should consult with your MM2H agent regarding extension possibilities.
In conclusion, while the current situation requires clarification, potential MM2H applicants should not be discouraged. The government is working to finalize the SEZ definitions, and it is anticipated that a broader range of properties within Johor will ultimately qualify for the program.
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