# Malaysia: taxes, residence and cost of living

Source: https://domicile.wiki/places/malaysia/ (domicile.wiki, researched 2026-10-15). Data licence CC BY-SA 4.0. Research, not tax or legal advice.

## At a glance

For an EU-citizen family of five living off a EUR 30M portfolio (the guide's default reader).

- Score for a wealthy family: 76 / 100
- Can EU citizens live here?: from €28,584 · Malaysia My Second Home (MM2H) - SEZ/SFZ (Special Economic and Financial Zones)
- Can US citizens live here?: from €28,584 · Malaysia My Second Home (MM2H) - SEZ/SFZ (Special Economic and Financial Zones)
- Other passports: from €28,584 · Malaysia My Second Home (MM2H) - SEZ/SFZ (Special Economic and Financial Zones)
- Tax on a €30M portfolio: €49,800 a year
- Wealth tax: none
- Children inherit: tax-free
- Living costs, family of five: €161,514 a year
- EU member: no
- Currency: MYR
- Capital: Kuala Lumpur

## Tax on investments, inheritance and wealth

Malaysia taxes individuals on Malaysian-source income at up to 30%. There is no capital gains tax for individuals on shares (the 2024 capital gains tax applies to companies and other entities), and foreign-sourced income received in Malaysia by resident individuals is exempt until 31 December 2036 (subject to conditions). Malaysian dividends are exempt except for a 2% tax on annual dividend income above MYR 100,000 from YA 2025. There is no inheritance, estate, gift or wealth tax. Real property gains tax applies to Malaysian property: non-citizens pay 10% even after 5 years. Malaysia has no comprehensive tax treaty with the US, so US dividends bear 30% US withholding.

- **Malaysian tax resident**: Territorial-style taxation: Malaysian-source income at 0-30%; foreign income received by resident individuals exempt to 2036.

## Income tax

Residents pay progressive tax from 0% to 30% (30% above MYR 2 million) after a MYR 9,000 personal relief. Foreign-sourced income received in Malaysia is exempt for residents under an exemption order running to 31 December 2036 (PwC), but not for pay for work done in Malaysia. Foreign employees pay 2% EPF; the self-employed have no mandatory scheme in the sources.

## How to get residence

No free movement for EU citizens. Every passport can use MM2H: Silver (USD 150,000 deposit and a RM600,000 home), Gold (USD 500,000 and RM1 million), Platinum (USD 1 million and RM2 million, with the right to do business) or the SEZ/SFZ tier (USD 32,000-65,000 in Johor zones). Very wealthy or high-earning people can use the PVIP (RM1 million deposit, RM200,000 fee, no minimum stay). Remote workers can use the DE Rantau Nomad Pass. None of these leads to permanent residence.

- **Malaysia My Second Home (MM2H) - Silver** (Passive income / retirement; EU citizens, US citizens, other passports; open): Five-year renewable social visit pass for foreigners who place USD 150,000 on fixed deposit and buy a home of RM600,000 or more.
- **Malaysia My Second Home (MM2H) - Gold** (Passive income / retirement; EU citizens, US citizens, other passports; open): Fifteen-year pass for foreigners with a USD 500,000 fixed deposit and a home of RM1 million or more.
- **Malaysia My Second Home (MM2H) - Platinum** (Passive income / retirement; EU citizens, US citizens, other passports; open): Twenty-year pass for a USD 1 million fixed deposit plus a home of RM2 million or more; the only tier allowing business and investment.
- **Malaysia My Second Home (MM2H) - SEZ/SFZ (Special Economic and Financial Zones)** (Passive income / retirement; EU citizens, US citizens, other passports; open): Ten-year pass with the lowest deposit (USD 32,000 to 65,000) for buyers of property in Johor's special zones such as Forest City.
- **Malaysia Premium Visa Programme (PVIP)** (Investor residence; EU citizens, US citizens, other passports; open): Twenty-year visa for very high earners or wealthy people who deposit RM1 million and pay a RM200,000 participation fee, with no minimum stay and the right to work or run a business.
- **DE Rantau Nomad Pass (Professional Visit Pass)** (Digital nomad; EU citizens, US citizens, other passports; open): One-year renewable pass for remote employees and freelancers working for clients abroad.
- **Employment Pass (EP, Categories I-III)** (Work; EU citizens, US citizens, other passports; open): Employer-sponsored work permit; the minimum salary was raised from 1 June 2026.

Citizenship: Citizenship by naturalisation (Federal Constitution Article 19) needs age 21+, about 10 of the last 12 years of residence, good character and Malay-language knowledge; it is discretionary and rare. The government portal says 12 years of residence.

## Inheritance law and trusts

Muslims, a majority of residents, follow faraid: fixed shares to heirs and at most one third by will. Non-Muslims can leave their estate freely and dependants may apply to court for provision. The Hague Trusts Convention is not in force, but Malaysia has trust law and Labuan offers a private foundation.

## Daily life (0-100, higher is better)

- Safety and personal security: 76
- Political and institutional stability: 63
- Corruption and government integrity: 56
- Legal system and property rights: 55
- Healthcare quality and access: 70
- Education quality: 31
- Human development and quality of life: 64
- Infrastructure and connectivity: 87
- Cost of living and housing: 95
- Business opportunities and economy: 69
- Cultural fit and lifestyle: 54

## Research notes

### Malaysia — family-office tax dossier

Last reviewed: 2026-10-15
Tax year: 2026
Reviewer: research agent (Claude), unreviewed by a tax adviser

#### Summary

Malaysia taxes individuals on Malaysian-source income at up to 30%. There is no capital gains tax for individuals on shares (the 2024 capital gains tax applies to companies and other entities), and foreign-sourced income received in Malaysia by resident individuals is exempt until 31 December 2036 (subject to conditions). Malaysian dividends are exempt except for a 2% tax on annual dividend income above MYR 100,000 from YA 2025. There is no inheritance, estate, gift or wealth tax. Real property gains tax applies to Malaysian property: non-citizens pay 10% even after 5 years. Malaysia has no comprehensive tax treaty with the US, so US dividends bear 30% US withholding.

US citizens: US citizens remain fully US-taxed; Malaysia has no comprehensive income tax treaty with the US and does not tax their foreign income, so the US layer is the full cost.

#### Residence and eligibility

Resident if present in Malaysia 182 days or more in a calendar year (further linking rules for shorter periods exist; not detailed by PwC).

- **Malaysia My Second Home (MM2H) - Silver, Gold, Platinum, SEZ/SFZ** (EU, US, OTHER): Age 25+, fixed deposit and property purchase requirements per tier (amounts shown only in images on the official site and not verified; commonly cited 2024 figures: USD 150,000 / 500,000 / 1,000,000 fixed deposit). Minimum stay 90 days a year for participants under 50. Spouse, children under 21 (and unmarried unemployed children to 34) and parents can be included. Pass renewed every 5 years.

#### Capital gains

##### Standard regime

No general capital gains tax for individuals. Gains on Malaysian real property and shares in real property companies are subject to real property gains tax (RPGT): 30% within 3 years, then 20%/15% (citizens and PRs) or 30% (non-citizens) in years 4-5, and from year 6: 0% for citizens/PRs, 10% for non-citizens. Foreign gains received by resident individuals are covered by the foreign-sourced income exemption to 2036.

- **Exemptions and thresholds:** Shares (listed or unlisted, Malaysian or foreign) held by individuals: no CGT. RPGT nil for citizens/PR after 5 years.
- **Important exceptions, statute references and announced changes:** The capital gains tax introduced from 1 January 2024 on disposals of unlisted shares and foreign capital assets applies to companies, LLPs, trusts and co-operatives, not individuals (PwC: no general capital gains tax for individuals). A family holding company would be subject to it.
- **Tax year / confidence / verification:** 2026 / high / partially_verified (checked 2026-10-15)
- **JSON numbers:** headline 30% (0.3); listed domestic 0% (0.0); listed foreign 0% (0.0); private business sale 0% (0.0); local real estate 10% (0.1); foreign real estate 0% (0.0).
- **How derived:** Individuals: no CGT on shares. Local real estate: RPGT 10% for a non-citizen selling after year 5 (citizens/PR 0%). Foreign real estate: gain is foreign-sourced, exempt to 2036. Headline 30% = top RPGT rate for disposals within 3 years.
- **Holding period:** RPGT rates fall with holding period (6th year onward lowest).
- **Trader recharacterisation:** Share or property dealing as a business is taxed as business income at up to 30%.
- **Foreign assets:** Foreign income (including gains) received in Malaysia by resident individuals exempt 1 January 2022 to 31 December 2036, subject to conditions; foreign income through a Malaysian partnership is excluded.

#### Dividends

##### Standard regime

Malaysian single-tier dividends are exempt, but from YA 2025 resident individuals pay 2% on annual dividend income above MYR 100,000 (after eligible deductions). Foreign dividends received by resident individuals are exempt under the foreign-sourced income exemption to 31 December 2036 (subject to conditions), so source-country withholding is the final cost.

- **Exemptions and thresholds:** First MYR 100,000 of dividends a year not subject to the 2% tax.
- **Important exceptions, statute references and announced changes:** No comprehensive treaty with the US (only air/sea transport), so US dividends bear 30% US WHT. Without a treaty, Malaysian credit relief is limited to half the foreign tax (relevant only if foreign income were taxable).
- **Tax year / confidence / verification:** 2026 / medium / partially_verified (checked 2026-10-15)
- **JSON numbers:** headline 2% (0.02); domestic 2% (0.02); foreign gross 0% (0.0); foreign tax relief: exemption.
- **How derived:** Domestic: 2% on dividend income above MYR 100,000. Foreign: exempt (FSI exemption for individuals to 2036).
- **Outbound withholding:** No WHT on single-tier dividends (general rule; not separately verified).
- **Treaty network:** About 74 comprehensive treaties (PwC lists 78 entries including pending and limited agreements); the US agreement covers only air and sea transport.
- **Holding companies:** Companies pay 24%; since 2024 companies pay CGT on unlisted Malaysian shares and on foreign capital gains received (10% of net gain or 2% of gross for pre-2024 assets, general knowledge, not verified). Foreign dividends received by companies are exempt only with economic substance.

#### Inheritance and gifts to children

##### Standard regime

No inheritance, estate or gift tax (estate duty abolished in 1991). Transfers of Malaysian real property between parents and children are generally exempt from RPGT, and stamp duty relief applies to some family transfers (not verified).

- **Exemptions and thresholds:** No tax of any amount.
- **Important exceptions, statute references and announced changes:** Reintroduction of an inheritance tax has been discussed publicly but no law exists (general knowledge).
- **Tax year / confidence / verification:** 2026 / high / verified (checked 2026-10-15)
- **JSON numbers:** basis `none`, children `fully_exempt`, exemption 0 MYR, brackets (marginal): none; other transfer costs 0% (0.0).
- **Gifts:** None. Stamp duty can apply to transfers of Malaysian property or shares by gift (rates not verified). (same as inheritance: True; tax-free after years: None)
- **Foreign assets:** No tax.
- **Residence/domicile rules:** Not applicable.
- **Business relief covers listed shares:** False

#### Wealth tax

##### Standard regime

No net wealth tax.

- **Tax year / confidence / verification:** 2026 / high / verified (checked 2026-10-15)
- **JSON type:** `none`
- **Property tax (not a wealth tax):** State quit rent and local assessment rates on property; stamp duty on property transfers (rates not verified). Foreign buyers face state-set minimum purchase prices.

#### Special regimes

None modelled; see Residence and eligibility.

#### Company taxation (kept separate from personal tax)

Headline CIT rate: 24% (0.24). 24% CIT (SME rates 15%/17% on the first MYR 600,000). Single-tier system. Since 1 January 2024 companies, LLPs, trusts and co-operatives pay capital gains tax on unlisted Malaysian shares and foreign capital assets (details not verified). Pillar Two: QDMTT and MTT from financial years starting 1 January 2025; UTPR not adopted.
Special zones/regimes: Labuan international business centre; Forest City Special Financial Zone; Iskandar Malaysia (not researched).

#### Cost of living notes

City: Kuala Lumpur.
- Prime rent, monthly: 8,200 MYR (2026). Median asking rent of 40 unique 4- and 5-bedroom listings (condominiums, bungalows, semi-detached and terraced houses) located in Mont Kiara, Sri Hartamas, Bangsar, Damansara Heights, Bukit Tunku, Kenny Hills, Ampang Hilir or KLCC, taken from all Mudah.my Kuala Lumpur house and condominium rental listings with 4 or 5 bedrooms read 15 October 2026 (503 listings city-wide, median MYR 2,400). First quartile MYR 5,000, third quartile MYR 12,500; detached bungalows in these areas ask MYR 10,000-18,500. Checked 2026-10-15 against the upper-middle-class standard. Source: Houses and apartments/condominiums for rent with 4 and 5 bedrooms in Kuala Lumpur (listing search).
- International school, annual per child: 129,712 MYR (2026). The Alice Smith School, Kuala Lumpur, Years 10-13 annual school fee 2026-27: MYR 122,370 plus 6% SST (MYR 7,342). Refundable parent deposit MYR 24,000 and enrolment fee extra. Source: Tuition and Fees.
Purchase prices, health insurance and housekeeper costs not sourced. Foreign buyers face state minimum purchase prices (MYR 1 million or more in Kuala Lumpur, not re-verified).

#### Open questions

- Conditions of the individual foreign-sourced income exemption to 2036 (Income Tax (Exemption) Orders) were not read from LHDN; PwC says 'subject to conditions'.
- 2% dividend tax confirmed by PwC income-determination page only; Finance Act text not opened.
- MM2H financial thresholds not verified (official page shows them as images).
- Company-level CGT rates and stamp duty rates not verified.
- Cost of living: prime rent is a listing-portal median of a small sample (40 asking rents); purchase prices, health insurance and housekeeper wages not sourced.

#### Sources

- Malaysia - Individual - Income determination (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/malaysia/individual/income-determination
- Malaysia - Individual - Other taxes (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/malaysia/individual/other-taxes
- Inland Revenue Board of Malaysia - home (RPGT and CGT links) (Lembaga Hasil Dalam Negeri Malaysia, tax_authority): https://www.hasil.gov.my/en/
- Malaysia - Individual - Foreign tax relief and tax treaties (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/malaysia/individual/foreign-tax-relief-and-tax-treaties
- Inheritance tax (country overview) (Wikipedia, other): https://en.wikipedia.org/wiki/Inheritance_tax
- Malaysia - Individual - Residence (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/malaysia/individual/residence
- MM2H Guidelines (Ministry of Tourism, Arts and Culture Malaysia, government): https://www.mm2h.gov.my/apply/guidelines
- Malaysia - Corporate - Taxes on corporate income (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/malaysia/corporate/taxes-on-corporate-income
- Houses and apartments/condominiums for rent with 4 and 5 bedrooms in Kuala Lumpur (listing search) (Mudah.my, other): https://www.mudah.my/kuala-lumpur/apartment-condominium-for-rent/4-bedrooms
- Tuition and Fees (The Alice Smith School, other): https://www.alice-smith.edu.my/join/tuition-and-fees

#### Change log

- 2026-10-15: initial research.
- 2026-10-15: reviewed special-regime durations: no special regime (the foreign-income exemption to 2036 applies to all residents and is in the standard regime).
- 2026-10-15 (data-quality pass): added cost of living: prime-area 4-5 bedroom asking rent MYR 8,200 a month (Mudah.my sample, n=40) and Alice Smith School Years 10-13 fee MYR 129,712 incl. 6% SST (2026-27).
- 2026-10-15: family rent re-checked against the upper-middle-class standard: kept.


## Residence and succession sources

- [MM2H Guidelines (tier tables published as images)](https://www.mm2h.gov.my/apply/guidelines) — Ministry of Tourism, Arts and Culture Malaysia (MOTAC)
- [Terms and Regulations for New Participants under MM2H (accurate as of 22 July 2024)](https://www.motac.gov.my/wp-content/uploads/2026/01/Terms-And-Regulations-For-New-Participants-Under-The-Malaysia-My-Second-Home-MM2H-.pdf) — MOTAC
- [FAQ: Malaysia Premium Visa Programme (PVIP)](https://imigresen-online.imi.gov.my/eservices/doc/FAQ_PVIP.pdf) — Immigration Department of Malaysia
- [DE Rantau Nomad Pass](https://mdec.my/derantau/) — Malaysia Digital Economy Corporation (MDEC)
- [De Rantau Pass FAQ (older version reported via search)](https://mdec.my/static/pdf/derantau/foreign/De%20Rantau_Pass_FAQ.pdf) — MDEC
- [Malaysia Revises Minimum Salary for Employment Pass Applications Effective June 1, 2026](https://eiglaw.com/malaysia-revises-minimum-salary-for-employment-pass-applications-effective-june-1-2026/) — EIG Law
- [Malaysia increase in employment pass salary requirements](https://www.bakermckenzie.com/en/insight/publications/2026/01/malaysia-increase-in-employment-pass-salary-requirements) — Baker McKenzie
- [HCCH status table: Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition](https://www.hcch.net/en/instruments/conventions/status-table/?cid=59) — Hague Conference on Private International Law
- [Key considerations when drafting a will in Malaysia](https://www.mondaq.com/wills-intestacy-estate-planning/1420158/key-considerations-when-drafting-a-will-in-malaysia) — Mondaq
- [Why Faraid Matters: Strategic Legacy Planning for Malaysia's UHNWI](https://conventuslaw.com/report/why-faraid-matters-strategic-legacy-planning-for-malaysias-uhnwi/) — Azmi & Associates (Conventus Law)
- [Malaysia Wills & Estate Guide](https://malaysia4u.com/wills-estate-guide) — Malaysia4U