New Malaysian nomad visa

[Mike Forman]

Digital nomad visa: Malaysia's new permit only requires a €24k income

Any remarks on this. Seems to be a cheap decent visa.
Anyone know if it would be possible to open a personal bank account with this visa?

 

[benbao]

You need to be employed to get this visa, also pay around ~USD200 per year which is in line with what other countries charge.

Opening a local bank account is questionable, Malaysian banks are notoriously difficult for foreigners. Also since this visa was just dropped without much of preparation it's unlikely any local bank planned for it or has policies in place.

 

[JackAlabama]

Looks good. Pricing is also reasonable and fair for asia. Requirements as well, especially compared to Thailand which always looks to stretch pricing.

 

[backpacker]

Looks good. Pricing is also reasonable and fair for asia. Requirements as well, especially compared to Thailand which always looks to stretch pricing.

Indeed, at first glance it looks attractive.
What I am wondering: From a legal perspective, this visa is a simple Professional Visit Pass (Pas Lawatan Ikhtisas PLIK). It requires a work contract /freelance contract. This work is logically performed from Malaysian soil, hence PE kicks in. That means Malaysian income taxes (24% in case they just account for the annual minimum) are due on the income generated through the work contract, even if that contract is with a company outside of MY. Do digital nomad applicants realize this?

 

[Mike Forman]

Indeed, at first glance it looks attractive.
What I am wondering: From a legal perspective, this visa is a simple Professional Visit Pass (Pas Lawatan Ikhtisas PLIK). It requires a work contract /freelance contract. This work is logically performed from Malaysian soil, hence PE kicks in. That means Malaysian income taxes (24% in case they just account for the annual minimum) are due on the income generated through the work contract, even if that contract is with a company outside of MY. Do digital nomad applicants realize this?

It requires a work contract or freelance contracts but the entry level is much lower than other countries such as Thailand, Bali,..

It wouldnt make sense that you are taxed on this income in Malaysia, as this would make it directly unattractive

https://www.expatgo.com/my/2022/08/02/malaysia-embraces-a-new-digital-economy-will-expats-benefit/

... There have been some unconfirmed reports that, much like Indonesia’s digital nomad scheme, remote workers in Malaysia would not be subjected to income tax here. This has not yet been announced, but it stands to reason that this would make any such program in Malaysia not only more attractive, but also competitive with similar programs in other ASEAN countries...

 

[backpacker]

... There have been some unconfirmed reports that, much like Indonesia’s digital nomad scheme, remote workers in Malaysia would not be subjected to income tax here. This has not yet been announced, but it stands to reason that this would make any such program in Malaysia not only more attractive, but also competitive with similar programs in other ASEAN countries...

Well, this article doesn't mention any source. The visa has now been implemented and no official source said anything about taxation yet.

Malaysia's taxation system has been under scrutiny for a while. It was one of the reasons why the government amended the tax code with regards to foreign sourced income (of which the implementation has now been partly suspended).
If they now explicitly exclude holders of a Digital Nomad Visa (which is nothing more than a Pas Lawatan Ikhtisas) from ordinary taxation it would not only be a special treatment for a specific group of people. It would also raise eyebrows abroad if MY really wants to tackle the problems it's tax system created.
Considering how erratic the MY government currently acts, I would not touch this visa before the tax question has been cleared and everything is written in stone.

 

[JackAlabama]

Indeed, at first glance it looks attractive.
What I am wondering: From a legal perspective, this visa is a simple Professional Visit Pass (Pas Lawatan Ikhtisas PLIK). It requires a work contract /freelance contract. This work is logically performed from Malaysian soil, hence PE kicks in. That means Malaysian income taxes (24% in case they just account for the annual minimum) are due on the income generated through the work contract, even if that contract is with a company outside of MY. Do digital nomad applicants realize this?

Normally, such income is exempt. The goal is to attract new people since they royally f*d up their economy since 2020 (they are not unique in f'ing up, so no blame on them specifically, praise is due for wanting to change smth.)

 

[benbao]

Normally, such income is exempt. The goal is to attract new people since they royally f*d up their economy since 2020 (they are not unique in f'ing up, so no blame on them specifically, praise is due for wanting to change smth.)

Well what you think is normally done sadly doesn't give guidance anyone can make plans on as @backpacker rightly pointed out the Malaysian government is behaving erratic and often does knee jerk U turns. So unless you get it official that income is excluded I would expect that it is taxable because that is how the current rules would be applied.

 

[JonnyStekkino]

Super interesting, seems like you can also be employed to a foreign company (your own maybe too?) according to thebangkokpost.

 

[backpacker]

Super interesting, seems like you can also be employed to a foreign company (your own maybe too?) according to thebangkokpost.

Of course, you can: Check the website DE Rantau - MDEC. It's all there!
However, as long as there is no clarification about local taxation, this visa is all but attarctive when compared to other offerings in SE Asia.

 

[hkrlh1]

Of course, you can: Check the website DE Rantau - MDEC. It's all there!
However, as long as there is no clarification about local taxation, this visa is all but attarctive when compared to other offerings in SE Asia.

Malaysia had territorial tax. To apply you must be employed by a foreign company, therefore you won't pay taxes on that income.

 

[backpacker]

Malaysia had territorial tax. To apply you must be employed by a foreign company, therefore you won't pay taxes on that income.

Unfortunately, things aren't that simple when it comes to taxation. Ever heard of PE??
Furthermore, if & what is taxed in case of being employed by a foreign company while being present in MY depends on local tax laws of the other state + applicable DTT's. If there is no applicable DTT you have a good chance to get taxed by both countries (MY + other state where foreign employer is located).

 

[daxbr]

The real breakthrough in the digital nomad visa derby will be 1% tax.

 

[RealDude]

The real breakthrough in the digital nomad visa derby will be 1% tax.

Why not -10% taxes?

 

[JonnyStekkino]

Program released. here some FAQ including the taxation part: https://mdec.my/wp-content/uploads/2022/09/DE-Rantau-Pass-FAQ-Foreign-Ver.1.0-011022.pdf
Seems like in most of the cases is not taxed.

 

[backpacker]

Program released. here some FAQ including the taxation part: https://mdec.my/wp-content/uploads/2022/09/DE-Rantau-Pass-FAQ-Foreign-Ver.1.0-011022.pdf
Seems like in most of the cases is not taxed.

Referring to Section C, No. 2 it is exactly what we discussed above: A dubious by a government organization that did not even take the time to clarify the most pressing questions upfront.
Understand that Section C, No. 2 is all but reassuring. Furthermore, it only refers to DTT cases which is open to interpretation by all parties involved.

 

[JonnyStekkino]

Anyone have any info regarding the taxation part?

 

[Marzio]

Anyone have any info regarding the taxation part?

https://www.offshorecorptalk.com/threads/tax-treatment-of-foreign-income-received-in-malaysia.39116/

 

[darkmage12]

All income derived from foreign soil not taxable for now.

 

[backpacker]

All income derived from foreign soil not taxable for now.

Not true! Stop posting such generalized claims.
Ever heard of PE?