US Expats in Malaysia: MM2H Visa, No Tax Treaty & PFIC Traps (2026)

Malaysia draws US citizens for reasons that are hard to argue with: English is widely spoken, the cost of living is a fraction of Singapore's, private healthcare is world-class, Kuala Lumpur is a modern global city, and the government has created the Malaysia My Second Home (MM2H) programme specifically to attract foreign long-stay residents. The country is the retirement destination of choice for thousands of US expats looking to stretch portfolio income further than they could in the US or Europe. But Malaysia's US tax picture is more complex than the brochures suggest. There is no US-Malaysia income tax treaty — the full burden of relief from double taxation falls on the FEIE and FTC under domestic US law. A 2024 rule change now taxes foreign-source income remitted to Malaysia, creating a potential double-taxation trap for retirees drawing down US accounts. The EPF mandatory pension fund now requires contributions from foreign workers. Malaysian funds are PFICs. And the MM2H visa's own financial requirements — fixed deposits, property purchases, offshore income thresholds — carry FBAR and reporting implications from the day you arrive.

1. Malaysian Income Tax at a Glance

Malaysia taxes resident individuals (those who spend 182 or more days in Malaysia during the calendar year) on Malaysia-source income at progressive rates, plus, since 2024, on foreign-source income remitted into Malaysia. Non-residents pay a flat 30% on all Malaysian-source employment income with no reliefs.¹

Malaysia's progressive resident rates for Year of Assessment 2026 (income year 2025) run from 0% on the first RM 5,000 of chargeable income to 30% on income above RM 1,000,000. The bracket structure has several intermediate steps, with the marginal rate reaching 19% at RM 70,001–100,000, 25% at RM 100,001–250,000, 26% at RM 250,001–400,000, 28% at RM 400,001–1,000,000, and 30% above RM 1,000,000. At an illustrative USD/MYR rate of 4.7, these thresholds translate to roughly: 19% marginal starting around USD 15,000; 25% around USD 21,000; 26% around USD 53,000; 28% around USD 85,000; and 30% above USD 213,000.

Malaysia does not impose:

• A capital gains tax on the sale of listed shares, unit trusts, or other securities for individuals (though corporate disposals of unlisted shares are subject to a CGT from January 2024)
• An inheritance or estate tax
• A wealth tax on assets

Malaysia does impose:

• Real Property Gains Tax (RPGT) on gains from selling real estate — with rates for foreign nationals at 30% (years 1–5) and 10% (year 6 onward)
• Foreign-source income tax on remittances — starting 2024, with a phased implementation through 2026 and full implementation expected from 2027

2. FEIE vs Foreign Tax Credit: The Medium-Tax Country Problem

US citizens living abroad choose between the Foreign Earned Income Exclusion (FEIE, Form 2555) — which excludes up to $132,900 of foreign earned income in 2026² — and the Foreign Tax Credit (FTC, Form 1116), which credits Malaysian income taxes paid against your US tax liability dollar for dollar, subject to the §904 limitation.³

Malaysia sits in a middle zone that requires actual modeling rather than a rule of thumb:

• Below FEIE limit ($132,900): FEIE typically wins. At moderate income levels, Malaysia taxes you at effective rates of 8–18% while the US would tax you at 22–24%. FEIE eliminates the US bill on that income entirely; FTC only partially covers it, leaving a residual.
• Above FEIE limit, mid-level income: The FEIE covers the first $132,900; beyond that, FTC applies (or you accept stacked-rate US tax on the excess). At Malaysian rates of 25–26% on income in the $130K–$200K USD range, FTC leaves a modest residual (25% vs 32% US marginal, for example). FEIE + partial FTC on the excess may be optimal.
• Very high earners: At Malaysian effective rates approaching 28–30% (income above USD 85,000), the FTC gap against the US 37% top rate is 7–9 percentage points. FTC provides significant but not complete relief. FEIE covers the first $132,900; FTC covers the rest to 30%; you owe the 7% gap.

Malaysia is NOT a zero-FTC-gap country. Unlike Germany (45% top rate), France (45%), Ireland (52%), or the UK (45%), where FTC fully eliminates US tax on foreign employment income for most earners, Malaysia's 30% cap means a structural residual US liability for high earners choosing FTC. And unlike Singapore or UAE, the gap isn't large enough to make FEIE the obvious choice at all income levels.

FEIE traps that apply in Malaysia as everywhere:

• Self-employment (SE) tax: IRC §1402(a)(8) — the 15.3%/2.9% SE tax applies to excluded earned income. FEIE provides no relief from SE tax.
• IRA/Roth IRA eligibility: IRC §219(f)(1) — contributions require earned income not excluded under FEIE. Fully FEIE'd income means no IRA or Roth IRA contribution for that year.
• Five-year revocation lock-in: Once elected, FEIE cannot be re-elected for five years after revocation. Don't elect FEIE lightly if you may move to a high-tax country later.
• Housing exclusion: Kuala Lumpur does not appear in IRS Notice 2026-25's list of high-cost cities with elevated housing exclusion caps. The standard base housing amount applies: $21,264 (16% × $132,900). This is meaningfully lower than the Singapore cap ($86,700) or Hong Kong cap ($114,300), reducing one advantage FEIE has in those cities.

Use our FEIE vs FTC calculator to model your specific income level, filing status, and housing situation before choosing a method.

3. No US-Malaysia Income Tax Treaty: What It Costs You

The United States and Malaysia have no comprehensive income tax treaty.⁴ The bilateral relationship consists of:

• A limited agreement covering international shipping income — not relevant to individual employees, self-employed workers, or investors
• A FATCA Intergovernmental Agreement (IGA) signed June 2021 — for financial account information exchange, not income tax relief

The practical cost of no treaty:

• No pension deferral: Unlike the UK SIPP (Article 18(1) of the US-UK treaty), the Canadian RRSP (Rev. Proc. 2014-55), or the German Rürup (US-Germany treaty Article 18), there is no US-Malaysia treaty provision that defers Malaysian pension income for US purposes. EPF employer contributions and private pension plan growth are currently taxable under US rules each year — not deferred until distribution.
• No tiebreaker protection: In a dual-residency year (e.g., your first or last year in Malaysia), no treaty tiebreaker resolves whether you are a US or Malaysian tax resident. You rely entirely on the domestic US substantial presence / bonafide residence analysis.
• No saving-clause exceptions: Treaties typically carve out exceptions to the saving clause for government pay, pensions, student income, and teachers. Without a treaty, none of these exceptions exist. Your full worldwide income is subject to US taxation under domestic law.
• No reduced withholding: Malaysia does not impose general dividend withholding on Malaysian-source dividends to non-residents, so this is not a major practical gap for most portfolio investors. However, the absence of treaty architecture means any future changes to Malaysia's withholding rules will apply without mitigation.

Countries with comprehensive US income tax treaties include Germany, France, Japan, UK, Switzerland, Netherlands, Australia, and Canada. Malaysia is not among them.⁵

4. No US-Malaysia Totalization Agreement: Self-Employment Tax Trap

Malaysia does not appear on the SSA's list of countries with US Totalization Agreements.⁶ Totalization agreements eliminate dual social insurance taxation — the situation where a worker pays into both US Social Security and a foreign country's social insurance system on the same earnings.

For employed US expats in Malaysia, the direct impact depends on employment status:

• Malaysian employer, employment pass: If your Malaysian employer withholds Malaysian EPF contributions (now mandatory at 2%/2% for foreign workers since October 2025), you are paying into Malaysia's social insurance system. Without a totalization agreement, you may owe both Malaysian EPF and US self-employment tax / FICA on the same income — no certificate of coverage relief available.
• US employer, secondment to Malaysia: You remain on US FICA through your US employer; Malaysian social insurance obligations depend on work pass type.
• Self-employed US citizens: Full US self-employment tax applies (15.3% on the first $184,500 in net SE income in 2026, 2.9% Medicare above that). No certificate of coverage to exempt you from Malaysian EPF contributions either. The total social insurance burden is substantial without any coordination between the two systems. See our self-employed expat tax guide for the full analysis.

5. The MM2H Programme: Financial Requirements and US Tax Implications

Malaysia My Second Home (MM2H) is a government-sponsored long-stay visa designed for foreign nationals who want to live in Malaysia without working. It has been substantially revamped since 2022, replacing the prior single-tier structure with a three-tier system.⁷

Exchange rates approximate at USD/MYR 4.70. Property purchase requirement must be completed within a defined period after visa endorsement. Up to 50% of the fixed deposit may be withdrawn after the first year for approved uses (property, education, medical).

US tax implications of the MM2H programme:

• Fixed deposit = FBAR obligation from Day 1. A Malaysian bank fixed deposit account — RM 150,000 ($32,000) or more — is a foreign financial account subject to FBAR reporting under 31 U.S.C. § 5314. You must file FinCEN 114 if aggregate foreign account balances exceed $10,000. Every MM2H participant exceeds this threshold from the day they open the required fixed deposit. Form 8938 (FATCA) reporting also applies once thresholds are met ($300,000 single / $600,000 MFJ at any point during the year for taxpayers abroad).
• Offshore income requirement triggers the FSI remittance trap. The minimum monthly offshore income requirement (RM 5,000–40,000/month) typically means remitting US-sourced income — pensions, Social Security, IRA distributions, dividends — into a Malaysian bank account. Since January 2024, that remittance triggers Malaysian income tax at resident rates. See Section 7 below.
• Property purchase triggers RPGT and §121 analysis. The required property purchase is subject to Malaysia's RPGT (30% for years 1–5, 10% year 6+) when sold. The US §121 exclusion applies if the property is your primary residence. See Section 8 below.
• FEIE does not help MM2H holders on retirement income. MM2H participants generally cannot work in Malaysia. Their income — Social Security, pensions, IRA distributions, dividends — is passive income, which is never excludable under FEIE. Relief from double taxation on passive income comes only from FTC or the (incomplete) treaty landscape. With no US-Malaysia treaty, passive income retirees have limited protection.

6. EPF: The §402(b) Trap for Employed US Expats

Malaysia's Employees Provident Fund (EPF) is a mandatory savings programme covering retirement, housing, and medical expenses. As of October 2025, EPF contributions are mandatory for non-citizen workers on work permits, adding a new complication for US citizens on Malaysian employment passes.⁸

EPF contribution rates (from October 2025 for foreign workers):

• Employee contribution: 2% of monthly wages
• Employer contribution: 2% of monthly wages
• (Malaysian citizens: 11% employee / 12–13% employer)

US tax treatment of EPF — IRC §402(b):

• The EPF is treated as a nonexempt employees' trust under IRC §402(b) — not a qualified retirement plan. There is no US tax deferral on EPF contributions or earnings, unlike a 401(k).
• Employee contributions to EPF are made from post-US-tax dollars (no US deduction available).
• Employer contributions — the 2% your Malaysian employer contributes — are taxable US compensation in the year they vest to your account, even though you cannot access EPF funds until retirement age.
• EPF investment earnings inside the fund are taxable to you annually on your US return as they accrue — not deferred until distribution.
• EPF distributions at retirement age are not separately taxed (you've already paid US tax on contributions and earnings along the way — only genuine appreciation untaxed to you previously would be taxable at distribution).

EPF investment options and PFIC exposure: EPF members may direct portions of their Account 1 balance into the EPF Members Investment Scheme, which allows investment in approved Malaysian unit trusts. Those unit trusts are PFICs for US tax purposes. EPF's own account interest (declared annually by EPF, typically 5–6%) is ordinary income to the US; EPF-invested unit trust holdings require separate Form 8621 filings for each PFIC position held.

FBAR and Form 8938: EPF accounts are foreign financial accounts subject to FBAR if aggregate balances exceed $10,000. They must also be reported on Form 8938 if applicable FATCA thresholds are met. Form 3520 reporting for foreign trusts typically does not apply to mandatory employer-plan contributions under Rev. Proc. 2020-17 — but consult a specialist given the §402(b) treatment.

7. Foreign-Source Income (FSI) Remittance Tax: The 2024 Change That Matters for Retirees

Before January 1, 2024, Malaysia operated a territorial tax system that exempted all foreign-source income from Malaysian taxation. This was a significant advantage for US retirees in Malaysia: US pension income, Social Security, IRA distributions, and US brokerage dividends remitted to Malaysia were simply not taxed by Malaysia.

That exemption ended on January 1, 2024.⁹ Malaysia now taxes foreign-source income remitted into Malaysia by Malaysian tax residents (those spending 182+ days in Malaysia):

• Phase-in period: A partial exemption applies through December 31, 2026 for certain categories of foreign income, providing transition relief.
• From 2027: Full Malaysian income tax at resident rates (0–30%) is expected to apply on all foreign-source income remitted to Malaysia.
• What counts as "remittance": Transferring foreign income into a Malaysian bank account constitutes remittance. Keeping foreign income in US accounts and not transferring it to Malaysia does NOT constitute remittance and is not taxable in Malaysia.

How this affects US expats:

• A US retiree on MM2H who transfers $5,000/month from their US brokerage or IRA into their Malaysian bank account is now remitting foreign-source income subject to Malaysian income tax. At Malaysian resident rates on $60,000/year of remittances, the Malaysian tax could be RM 3,000–10,000+ depending on total income.
• That Malaysian FSI tax on remitted income may generate a Foreign Tax Credit (Form 1116, passive income basket) that partially offsets the US tax already paid on the same dollars. However, with no US-Malaysia treaty, basket limitations, and the passive income nature of most retirement income, the FTC offset may be incomplete.
• Planning response: Hold passive investment income in US-custodied accounts. Pay Malaysian living expenses from a Malaysian bank account funded by MYR-denominated deposits or by selling small amounts of MYR at a time rather than remitting large passive income streams from the US.

This change makes Malaysia materially less attractive for US retirees who were planning to live on remitted US portfolio income. Modelling the combined US + Malaysian tax on your expected retirement income streams is essential before committing to Malaysia as a retirement base.

8. Malaysian Investments: PFIC Traps in Unit Trusts and PRS

Malaysia's retail investment market offers a wide range of products that are Passive Foreign Investment Companies (PFICs) under IRC §1297 — pooled investment vehicles where 75%+ of gross income is passive or 50%+ of assets produce passive income.¹⁰

Malaysian investment products that are PFICs for US citizens:

• Unit trusts: Offered through fund managers (Public Mutual, AmInvest, Manulife, CIMB Principal) and banks. All qualify as PFICs.
• Amanah Saham funds: Government-linked funds (ASB, ASN, etc.). Restricted to Bumiputera citizens — most US expats cannot hold them — but if accessible, they are PFICs.
• Private Retirement Scheme (PRS) funds: Malaysia's voluntary supplementary retirement savings. PRS funds invest in Malaysian unit trusts — each fund is a PFIC. PRS also offers no US tax deduction and no US-recognized deferral.
• Investment-linked insurance products (ILPs): Life insurance policies with an investment component invested in sub-funds. The sub-funds are PFICs; the insurance wrapper provides no US tax shelter.
• ETFs listed on Bursa Malaysia: Malaysian-domiciled ETFs are PFICs.

Without a QEF or mark-to-market election, PFIC gains are taxed under the §1291 excess distribution regime — ordinary rate (37% in 2026) plus compounding interest charges on deferred gain going back to each year of holding. Use our PFIC tax impact calculator to model the penalty. Individual Bursa-listed company stocks (direct equity ownership in individual companies, not funds) are NOT PFICs.

Solution: Hold US-domiciled ETFs (VTI, VXUS, BND, BNDW) through a US-custodied brokerage accessible from Malaysia. Interactive Brokers Malaysia, Moomoo, and TD Ameritrade International commonly serve US expat clients. Avoid Malaysian unit trusts, PRS, and ILPs entirely.

9. No Malaysian Capital Gains Tax on Shares — But the US Still Taxes Everything

Malaysia does not impose a capital gains tax on individual investors selling listed shares, unit trusts, or other securities.¹¹ A corporate CGT on unlisted share disposals was introduced in January 2024, but this does not apply to individual investors selling public company shares or personal portfolio securities.

For US citizens, this Malaysian CGT exemption provides less relief than it appears:

• The US taxes capital gains on worldwide income regardless of where you live.
• Long-term gains: 0%, 15%, or 20% depending on US taxable income plus 3.8% NIIT above $200,000 single / $250,000 MFJ.
• With no Malaysian CGT to credit against the US tax, the US capital gains rate applies in full — there is no FTC to offset it.

This means US citizens in Malaysia have no tax-advantaged mechanism to hold Malaysian equities in a taxable account. The FTC for investment income only applies to the extent Malaysia actually taxed the income. On capital gains from securities, Malaysia doesn't tax → no FTC → full US tax exposure.

10. Real Property Gains Tax (RPGT): Foreign National Rates

Malaysia imposes RPGT on gains from selling real property. The rates for foreign nationals differ significantly from those for Malaysian citizens:¹²

For a US citizen selling a Malaysian property after 7 years with a RM 500,000 gain (~$107,000): RPGT at 10% = RM 50,000 (~$10,700) paid to Malaysia. The US also taxes the full USD gain at long-term capital gains rates (15–23.8%). The Malaysian RPGT is FTC-creditable against the US capital gains tax in the passive income basket.

§121 primary-residence exclusion: The US $500,000 MFJ / $250,000 single exclusion under §121 applies to foreign primary residences — there is no geographic restriction. If your Malaysian home was your primary residence for at least 2 of the last 5 years before the sale, up to $500,000 of gain ($250,000 single) is excluded from US taxation. This can effectively eliminate the US tax on a Malaysian home sale while the Malaysian RPGT generates a FTC that has no US liability to offset. Plan the sequence carefully with a specialist.

Currency gain trap: If you financed your Malaysian property purchase with a MYR-denominated mortgage and the MYR appreciated against the USD over the life of the loan, the currency gain realized at payoff is §988 ordinary income for US purposes. A MYR mortgage that cost more to repay in USD terms generates US taxable income with no offsetting Malaysian deduction.

11. FBAR and FATCA Reporting

Every Malaysian financial account must be evaluated for US reporting obligations:

• FBAR (FinCEN 114): Required if aggregate foreign financial account balances exceed $10,000 at any point during the calendar year. Covered accounts: Malaysian bank accounts (Maybank, CIMB, Public Bank, HSBC Malaysia, Standard Chartered Malaysia), brokerage accounts, EPF accounts, PRS accounts, cash value of Malaysian insurance policies, and fixed deposit accounts required by MM2H. Annual deadline: April 15 (automatic extension to October 15, no form required).
• Form 8938 (FATCA): Required if total foreign financial assets exceed $300,000 single / $600,000 MFJ at any point during the year (or $200,000 / $400,000 at year-end) for taxpayers living abroad. MM2H participants with Gold-tier RM 500,000 ($107K) fixed deposits, real estate, and EPF balances frequently exceed these thresholds in the aggregate.
• Form 8621 (PFIC): Required annually for each PFIC holding — Malaysian unit trusts, PRS funds, EPF investment accounts.
• Form 3520 / 3520-A: Generally not required for EPF contributions under Rev. Proc. 2020-17 employer-plan relief, but PRS accounts and certain Malaysian insurance wrappers may be foreign trusts requiring reporting. Confirm with a specialist for your specific holdings. See our Form 3520 guide.
• Malaysian FATCA compliance: Malaysia signed a FATCA IGA in June 2021. Malaysian banks report US-person accounts to the Malaysian Inland Revenue Board (LHDN), which exchanges information with the IRS. US persons are not systematically denied Malaysian bank accounts, but some private banking and offshore product providers impose US-person restrictions.

12. State Taxes: Domicile Trap Applies When Moving to Malaysia

Moving to Malaysia does not automatically end your US state tax obligations. If you were domiciled in California, New York, Virginia, or another aggressive state before relocating, you may remain a state tax resident owing state income tax on worldwide income. California does not recognize the federal FEIE and taxes nonresidents on California-source income (common if you have California rental income or California-employer deferred comp). New York applies a 184-day rule and "permanent place of abode" test that can catch expats who maintain a NY apartment for family members. See our state tax residency guide for the full domicile-severance checklist before you board the plane.

13. Pre-Move Planning Checklist for Malaysia

1. Model FEIE vs FTC for your income and income type. Employed professionals at moderate income: FEIE often wins. High earners: close call, model it. Passive income / retirees: FTC only (FEIE doesn't apply). Run the FEIE vs FTC calculator and confirm with a specialist.
2. Understand the FSI remittance tax before committing to MM2H. If your retirement plan involves remitting US-sourced passive income to fund Malaysian living expenses, model the combined US + Malaysian tax burden starting 2027 when the full FSI tax applies. The math has changed materially since 2023.
3. Open a US brokerage account accessible from Malaysia before departing. Interactive Brokers and TD Ameritrade International are commonly used by US expats in Malaysia. Confirm your US brokerage will maintain your account for Malaysian residents — some will not. Don't wait until you arrive.
4. Replace Malaysian-fund exposure with US-domiciled ETFs. Every Malaysian unit trust, PRS fund, and ILP sub-fund is a PFIC. Hold VTI, VXUS, BND in a US-custodied account instead. Avoid Bursa-listed ETFs and Malaysian retail funds.
5. Set up FBAR and Form 8938 tracking from the day you open your first Malaysian account. The MM2H fixed deposit alone clears the $10,000 FBAR threshold many times over. Annual filing begins immediately.
6. Understand EPF if you will be employed. If your Malaysian employer places you on the mandatory EPF scheme, the employer's 2% contribution is US taxable compensation annually. Factor this into your compensation negotiations and US tax planning.
7. Sever your prior US state domicile before departing. Change driver's license, voter registration, and professional memberships. Close a NY or CA residence before establishing Malaysian residency. See the state residency guide.
8. Model the §121 exclusion before buying Malaysian property. If you intend to buy a home for the MM2H property requirement, determine your expected holding period and whether §121 will cover the expected gain. Plan the RPGT vs US CGT interaction with a specialist before committing to a purchase.
9. Review Social Security and Medicare implications. No US-Malaysia totalization agreement means any Malaysian social insurance you pay (EPF) does not count toward or coordinate with US Social Security. Also review Medicare Part B enrollment — overseas residence does not exempt you from late-enrollment penalties when you eventually return. See our Social Security guide and Medicare guide.
10. Get a cross-border specialist before the move, not after. The combination of no treaty, FSI remittance tax change, EPF §402(b) treatment, and MM2H financial requirements creates layered complexity that a generalist US advisor or a Malaysian advisor alone cannot fully navigate.

What a Malaysia-Specialist Expat Advisor Handles

A US generalist advisor will often decline non-resident clients or miss the EPF §402(b) and FSI remittance traps. A Malaysian financial advisor will optimize your EPF and suggest Malaysian unit trusts — creating PFIC complications. A US-licensed, fee-only advisor who works with US citizens in Malaysia handles:

• FEIE vs FTC decision modeling specific to your income level, income type (earned vs passive), and filing status
• FSI remittance tax planning — structuring cash flows to minimize Malaysian taxation of remitted US income
• EPF §402(b) analysis — employer contribution treatment as current-year compensation, account reporting
• Portfolio PFIC remediation — replacing Malaysian unit trusts with US-domiciled equivalents
• MM2H property planning — §121 exclusion, RPGT vs US CGT coordination, currency gain analysis
• FBAR, Form 8938, Form 8621 preparation and coordination with your US accountant
• Social Security enrollment timing and Medicare Part B strategy
• State domicile severance documentation
• Non-US spouse planning: QDOT trust analysis, non-citizen spouse annual gift exclusion ($194,000 in 2026¹³)
• Exit tax planning under IRC §877A for those considering expatriation

1. LHDN (Inland Revenue Board of Malaysia): Individual income tax rates for Year of Assessment 2026. Residents taxed at progressive rates 0–30%; non-residents at a flat 30% on Malaysia-source income; 182-day residency threshold. hasil.gov.my — individual tax rates
2. IRS Rev. Proc. 2025-67: Foreign Earned Income Exclusion limit for 2026 = $132,900. IRS Publication 54, Tax Guide for US Citizens and Resident Aliens Abroad. irs.gov/publications/p54
3. IRC §901–§905; IRS Form 1116 Instructions (2026). Foreign Tax Credit framework, §904 income-basket limitation, 1-year carryback / 10-year carryforward. irs.gov/forms-pubs/about-form-1116
4. IRS: United States Income Tax Treaties — A to Z. Malaysia does not appear on the IRS list of comprehensive income tax treaty partners. The only bilateral Malaysia-US agreement covering income is a limited shipping/aircraft arrangement. irs.gov — income tax treaties A to Z
5. IRS Publication 901, U.S. Tax Treaties. Lists all countries with comprehensive US income tax treaties; Malaysia is absent. irs.gov/publications/p901
6. SSA: International Programs — U.S. International Social Security Agreements. Malaysia does not appear on the SSA's list of totalization agreement countries (currently 30 countries). ssa.gov/international/agreements_overview.html
7. Malaysia My Second Home (MM2H) Programme: three-tier structure (Silver/Gold/Platinum) following 2022 reform. Financial requirements as published by Malaysia Tourism Promotion Board / MM2H unit. Property purchase mandatory for all tiers. 90-day minimum stay for participants aged 25–49; waiver for 50+. mm2h.gov.my
8. Employees Provident Fund (Amendment) Bill 2025 (passed March 2025): mandatory EPF contributions for non-citizen workers (both employer and employee at 2% each) effective October 2025. US tax treatment under IRC §402(b) as nonexempt employees' trust per IRS guidance. kwsp.gov.my — EPF Board Malaysia
9. EY Malaysia Tax Alert: Taxation of foreign-sourced income remitted to Malaysia effective January 1, 2024. Phase-in exemptions through December 31, 2026; full implementation expected 2027. LHDN guidelines on FSI remittance tax. EY Malaysia — FSI tax treatment
10. IRC §1297 (PFIC definition); IRS Form 8621 Instructions. Malaysian unit trusts, Amanah Saham funds, PRS funds, and Malaysian-domiciled ETFs generally meet the PFIC income test or asset test. Individual Bursa Malaysia company shares are not PFICs. irs.gov/forms-pubs/about-form-8621
11. Malaysian Income Tax Act 1967: capital gains on disposal of shares listed on Bursa Malaysia and personal investment portfolios are not subject to income tax for individuals. Corporate CGT on unlisted shares introduced January 1, 2024, does not apply to individual investors. RPGT Act 1976 governs real property gains separately. hasil.gov.my
12. Real Property Gains Tax Act 1976 (Malaysia): rates for disposers who are not citizens or permanent residents. 30% for disposal within 5 years of acquisition; 10% from year 6 onward. RM 10,000 or 10% of gain (whichever is higher) exempted per disposal. From 2026, self-assessed RPGT filing required within 60 days of disposal. hasil.gov.my — RPGT
13. IRC §2523(i): Annual gift tax exclusion for transfers to non-citizen spouses. 2026 limit $194,000 per IRS Rev. Proc. 2025-67. Non-citizen spouses are not eligible for the unlimited marital deduction under IRC §2056(d). See also non-US spouse planning guide.

US tax values verified as of June 2026 against IRS.gov, SSA.gov, and published IRS revenue procedures. Malaysian tax rates and RPGT rates per LHDN (hasil.gov.my) for Year of Assessment 2026. MM2H financial requirements per official programme guidelines. Exchange rates illustrative at approximately USD/MYR 4.70 and may vary. This guide is for informational purposes and does not constitute tax or financial advice.