KUALA LUMPUR, BANGKOK: Malaysia and Thailand have jumped onto the global bandwagon of wooing foreigners to live and invest in their countries to give their economies a boost.
Both Southeast Asian nations launched similar initiatives earlier this month. Malaysia launched a new premium visa programme, or PVIP, while Thailand introduced a long-term resident visa for not only highly skilled talents or remote workers, but also wealthy retirees and the so-called “global citizens”.
While Malaysia’s efforts come amid a strong economic forecast, Thailand’s economy is still recovering at a slower rate than the government hoped. Record inflation there and a weak currency are threatening to make Thailand the slowest growing economy in Southeast Asia this year.
Malaysian Home Affairs Minister Hamzah Zainuddin said that his ministry is confident that the PVIP can attract more foreign direct investment that will strengthen the economy and increase job opportunities for locals.
The programme is open to individuals with an offshore annual income of more than US$100,000. They must also have at least US$218,000 in their bank accounts and pay a one-time fee of about US$44,000 as well as US$22,000 per dependent.
The Home Affairs Ministry is targeting at least 1,000 participants in the first year of the programme. These participants are expected to generate around US$43 million in revenue for Malaysia, as well as some US$218 million in fixed savings.
Malaysian business leaders CNA spoke to said that such a programme could be a lucrative source of revenue from abroad but pointed out that the current PVIP framework lacks concrete measures to attract premium investors.
The scheme will work because the applicants who succeed will spend money in the country, and if they bring along their families, there will be a trickle-down effect on the economy, said Mr Shaun Cheah, executive director of the Malaysian International Chamber of Commerce and Industry.
“It’s a long-term visa, it’s 20 years, and they (participants) will invest in businesses here too. On top of that, it’s also the talent and the know-how that they bring to the economy too,” he said.
POTENTIAL ISSUES WITH MALAYSIA’S PROGRAMME
Mr Cheah noted that Malaysia remains as one of the more attractive places for investments. However, he asked if those with passive income such as celebrities, artists and investors will find Malaysia to be a place where they can reasonably get high returns.
“Some of the conditions (of the programme) are that they have to put in some funds in this country and with the weakening foreign exchange, that means they will erode the value of their funds parked in Malaysia,” he said.
“Malaysia will have to continue to send this business friendly, open attitude towards investors.”
However, there are aspects of the programme that require clarity, he said.
“What are the areas that they can actually invest in? The PVIP also allows the person to work. Are there any restricted employment that they can go into?” he asked.
Dr Carmelo Ferlito, chief executive of the Centre for Market Education, said that he is skeptical of the concept of residencies leading to investments.
“I think that it is like mixing up two different categories or approaching it from probably the wrong angle. Investments are brought in by businesses, not necessarily by wealthy people,” he said.