The increased difficulty of obtaining popular visas in Thailand and Singapore could benefit Malaysia, according to insights released today by Juwai IQI Co-Founder and Group CEO Kashif Ansari. The changes alone could drive RM2.7 billion of new spending in Malaysia over the next five years, as well as RM7 billion in new bank deposits and RM35 million in application fees paid to the government. Five-Year Economic Benefits of Shifts in Visa Applicants from Thailand to Malaysia (Ringgit)
Opportunity for Malaysia
“Malaysia is seeking investment, job creation, supply chain localisation, and skilled labour. When other visa programs turn applicants away, Malaysia may benefit,” said Mr Ansari. “Thailand has indicated it will make major changes to its popular Elite Visa program as of October 1, possibly raising fees by as much as 500%. The Elite visa is a residency visa similar to MM2H but with more than 20,000 participants. “If Thailand changes its visa as much as expected, the Elite Visa could lose market share to Malaysia.
“We estimate that the changes to the Thai Elite visa could redirect from 5% to 25% of new applicants to Malaysia instead of Thailand. Over five years, that could result in as much as RM7 billion in new deposits in Malaysian banks. In the same time frame, it could also lead to the government earning RM35 million in application fees and visa holders directly spending for
personal consumption some RM2.7 billion. “The personal consumption estimate is based on a conservative assumption that each visa holder spends an average of US$28,320 on personal consumption per year. MM2H rules require successful applicants to deposit a minimum of RM1 million in a Malaysian bank and to pay an RM5,000 fee.
“Thailand’s Elite Visa program competes directly with MM2H. Both focus specifically on wealthy foreigners and seek to maximise economic benefits to their country through fees and investment. The two countries offer attractive lifestyles, natural beauty, central locations, delicious cuisines and high quality of life.
Singapore
“Singapore is also revising one of its visa programs in ways that could benefit Malaysia. New rules coming into effect on September 1 will make it harder for companies to hire foreign employees under the popular Singapore Employment Pass visa. With its changes, Singapore hopes to increase local employment by making it more difficult for companies to hire foreigners. “An average of about 180,000 people hold a Singapore Employment Pass. It’s not clear yet how significant an impact the rule changes will have. If the number of Employment Pass visas drops significantly and companies perceive Malaysia as a friendlier environment, some companies or employees may shift to Malaysia.
Details of Thailand’s New Elite Visa
“The Thai media are calling the upcoming changes to Thailand’s Elite Visa ‘unprecedented,’ even though the precise details have not been released. Based on official comments, insiders expect three areas of reform. Enrolment and renewal fees will increase, making the Thai visas more expensive. The number of packages offered will decrease and be simplified. Also, applicants will need to provide more information and background checks. “The most significant impact is likely to come from raising the cost of the visa by what industry experts suggest will be 50% to 500%. Current five-year visa holders only have until August 15 to upgrade to the 20-year visa under the current rules. “The industry also expects the new Elite Visa to be influenced by airline loyalty programs, with different visa durations and tiers of participation, perhaps like ‘gold,’ ‘silver,’ and ‘bronze.’ Participants may be able to earn points and redeem them for benefits.
“The current Thai Elite Residence Visa offers durations of 5, 10 or 20 years in exchange for non- refundable payments of about US$20,000 to about US$60,000, equivalent to RM91,500 to RM274,400. Applicants alternatively may invest the equivalent of RM1.4 million in Thai real estate.
“It is not clear how much income Thailand has received due to the visa, but the 20,844 participants in 2022 have probably paid the Thai government the equivalent of at least RM1.9 billion in fees for the privilege. Last year, the Thai government estimated that each wealthy visa holder spends an average of US$28,320 per person on personal consumption. “Participation in Thailand’s Elite Visa has climbed sharply over the past three years. In 2022, net membership grew by 5,582, the largest one-year increase ever. Net participants climbed in 2021 by 4,262 and in 2020 by 4,820. Before the pandemic, the year with the highest growth saw a net gain of only 2,149, only about one-third of last year’s level.”
