The life is colourful and all full of opportunities in Malaysia. The rising economy is a perfect combination of cultural heritage and natural bounty (like you will find while living in Penang). Hence, little doubt that the country would attract many foreigners and expatriates with its avenues of career growth and the allurement of a good life after retirement. Here we go with the insights into the tax guide for the non-residents and the expatriates in Malaysia. You would find them more flexible than many other countries.

The Tax Guide

Malaysia is a destination for inflating your saving fund. How? Let us probe!

The Tax Rate: If the tax rate is friendly to the citizens, people could save more. Based on the differing period of stay, the tax rate would alter.


a) No income tax is to be paid by the non-residents if they are staying for less than 60 days. May whatever be the earning in the way of salary, commission or bonus- you need not have to pay the income tax.

b) One would be considered a non-resident when the total number of stay is within the limit of 182 days. The person would not be able to enjoy the tax incentive and his/her earning would be subjected to a tax deduction at the rate of 28%.

c) To get the tax benefits like a resident, you have to stay for a period longer than 182 days. The person would be taxed anywhere between the range of 0% to 25%. The income amount would decide the rate of tax deduction. In addition, a resident Malaysian could enjoy the tax incentives. The income is also liable to draw the rewards of allowances and family rebates.

d) The crew members reporting to the duty onboard a Malaysian ship are subjected to reap the benefit of a complete tax exemption.

Defining a Resident: Those who want to be taxed as a resident in Malaysia should fulfil the below mentioned eligibility criteria:

a) Must stay for 182 days in a calendar year.

b) If it is below 182 days in a year but has reached the figure or surpassed it in the next, you would be considered a resident.

Travelling would not Hamper your Prospects: The benefits enjoyed as a resident would not be hampered if you have to travel outside the country for the following reasons:

a) For attending seminars, conferences, meetings or exhibitions related to your profession.

b) To attend to a health issue of either yourself or of an immediate family member.

c) A social visit less than 14 days.

Such a brief interval is not considered as an absence and hence is not an intermission to the 182 days tenure.

Considering the popularity of Malaysia among the retired non-residents, many of them apply for long-term visa programmes like MM2H and enjoy the tax benefits of a resident. Among different states, the foreigners prefer to retire in Penang. Here, apart from the tax benefits, one can buy a real estate property at a cost-effective price. Backed by a strong reason and a letter of support from the Ministry of Tourism, an MM2H participant can buy at the most 2 real estate properties below RM 500,000 (RM 1= 0.26 USD).

If you are in Malaysia, you are spoilt for choices with regard to the residence locations, versatile price ranges of real estate properties etc. It is a heaven with numerous tax incentives.