Question to Yohan re Malaysian Citizenship and property ownership

Hi Yohan,
I have read some of your posts and you seemed quite familiar with the system in Malaysia. I would like to get some feedback from you. I am a Naturalized U.S. citizen originally from Malaysia. Because US and Malaysia don't recognize dual citizenship, I therefore relinquished my Malaysian citizenship. My family back home intends to purchase a residential home and they like to put my name in the deed. Can you let me know if there is any advantage and disadvantage of doing that. Thanks in advance.

It is my understanding that the US recognizes dual citizenship - it is Malaysia that does not.

METHOS, on 21 October 2009 - 10:39 PM, said:

When I went through US naturalization I was required to state under oath that I am renouncing my old citizenship. In the end, the officer also reminded everyone in the room to return our old passport to the embassy. It is my understanding that for those who were born in the U.S. has the option to hold dual citizenship until they reach the age of 21.

METHOS, on 22 October 2009 - 12:39 PM, said:

This is my understand too. But only under certain conditions. Somehow an one-way-road. For many foreigners, applying for the US-citizenship, dual nationality is not a problem.

But it's not the same rule in case an US-citizen is applying for a foreign nationality.
It should be noticed, that US-citizens might forfeit their US citizenship in case they apply for another citizenship voluntarily.

Generally, yes, US recognizes dual citizenship, if a foreigner applies for US-citizenship - but does not encourage it. USA welcomes applicants to renounce their former citizenship, but this is not always easily possible as they cannot always easily renounce their citizenship due to restrictions of the country they are coming from.

I do not know however if applicants who are openly willing and able to renounce their former citizenship have a higher chance of approval than other applicants, who cannot or refuse to renounce their original citizenship.

Dual citizenship holders are required by US law to enter and leave USA using US-passports only. Regardless if they coming as tourists and living somewhere else or if they have residencial status in the USA.

A dual citizenship holder might use the passport of the other country only after leaving US-territory. This usage of the foreign passport abroad is legally correct and does not create any conflict for holding the US-citizenship.

I am from EU and not from USA, my knowledge about USA regulations regarding citizenship is limited - if something is wrong what I say here and you know better, please let me know.

Luke, on 22 October 2009 - 02:49 AM, said:

I am not sure, if I can help you with information, but there are some questions first. Who are they, your family back? Parents or children (minors or full age, what nationality?) Or are you talking about your wife living in Malaysia? And how old are you now?

Did you ever go to a Malaysian Embassy and did you formally renounce your citizenship? Do you have it in written form, that you are released and not a Malaysian citizen anymore? Or did you merely renounce the use of Malaysian citizenship within US territory while taking the oath for the US-citizenship?

About the residential home, even foreigners under some circumstances can buy residential house/land in Malaysia. But there are categories, what kind of land, and house is that? for what reason do they want your name in the land titel? Do you pay for this land from abroad with foreign currency?

Luke, on 22 October 2009 - 11:04 PM, said:

In case of children, rules are similar in most Western countries - up to 18+, there is never a problem about dual citizenship, it is written somewhere in these laws (similar to Japan, EU and also in USA or Canada etc.) that these children should make a choice ON REQUEST, usually within 3 years after passing full age when 18+.

But most of these children never receive any government request to make this choice and they continue with US passports and travelling everywhere, even into their former native country with US-passports - they think, they are now US-citizens only, but this is not true.

Even after renouncing citizenship, most countries based on EU/UK laws (Malaysia too should have such a regulation) offer a possibility to reclaim the former nationality again. You have to be careful however, as this might result in forfeiting the US-citizenship. You should never sign such a reclaim paper without approval from the US-government.

Some Asian countries offer special long-term visa status which makes it possible for former citizens to buy some land/house for business or retirement, good examples are Philippines and recently also Cambodia. I think, Malaysia too. But details you have to request from the Malaysian embassy, immigration, or sometimes Malaysian sponsor.

My basic advice, just out of my feeling: Keep the US-citizenship under any circumstances.
Anything else is not so important, as there are workarounds for such a legal situations like yours in Malaysia for sure.

I think, you should check about a long-term resident status in Malaysia, which makes it possible to buy some certain land/house/condominium, but keep in mind, that you will not be allowed to work in Malaysia. Working permit is a totally different matter. Not included in Malaysia in the long-term residence permit like here in Japan.

I preferred not holding 2 passport entering Malaysia and it seems many Malaysian feel comfortable of doing nowadays. Believe me, I have heard some mind boggling reports on travelers entering Malaysia with a Malaysian passport and their new adopted one. When I went to Japan a few years back to visit my in-laws I encountered so much bureaucratic obstacles that brought me to renounce my Malaysian citizenship. With that said, going back to my original question.
Do you see any advantage of having your name on a piece of property in Malaysia where you no longer lived? It is my mom's idea. And I have no clue as to the requirement for a foreigner to asset ownership in Malaysia. Any comments?

This post has been edited by Luke: 23 October 2009 - 01:22 AM

Luke, on 23 October 2009 - 02:17 AM, said:

Makes sense to me too. Use the US-passport only, still the much better citizenship.
Malaysia, same as Japan is not accepting 'dual citzenship' in general.

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For me personally, only the retirement visa in Malaysia was interesting (but I decided then for Thailand and have my second home there and not in Malaysia)

It is possible for a foreigner - retired in Malaysia - to own not only a condominium, but also land/house in Malaysia (this is unique in Asia I think), if it is fitting to certain categories.

But if you prefer not to live there anyway, I wonder for what you should register a land/house there. Better save your money and use it later for anything else. Real estate is not that easy to sell if not in a prime location in Malaysia.

Thanks for your prompt response, Yohan. I never had the intention of owning a property there. Since my mom is purchasing the house and she insist on having my name down as well. And she is paying for it. I reminded her that I am no longer a citizen there. What can you do when she obviously had made up her mind.

As you mentioned, only a certain foreigner are allowed to own properties if they fit in that category, like retiring in Malaysia with the MMSH2 visa. I don't have the visa. So, technically it would be illegal, right?

Luke, on 23 October 2009 - 02:46 AM, said:

You will not be able to register it anyway, if it does not fit, but visa is not always a requirement to register certain property in Malaysia in foreigners name.

Yes, the MM2H is a good workaround for a retired foreigner interested into not so expensive property in Malaysia and wants to stay in Malaysia for a long time, but there are various limitations about what you can buy and what not.
Such foreigners can buy 2 houses at a cost of not less than RM150,000 each.

But not every cheap property is for foreigners however, not even for every Malaysian citizen. Good information is here:

http://www.malaysiam...Second-Home.htm

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But foreigner can buy property in Malaysia anyway, even without any visa, I think.
Some real estate brokers are offering property under certain conditions for foreign individual investors in Malaysia. If interested:

http://www.globalpro...ia/Buying-Guide

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I think, not so many are really interested in such offers, but as you are originally from Malaysia and as there are still relatives living in Malaysia, investment might be maybe worth a consideration?

But what kind of house/land is that, what your family members want to put your name in the land titel? Does it qualify for registration in a foreigners name?

yohan, on 22 October 2009 - 10:05 PM, said:

It is a 1 family double-storey detached house with 3 bedrooms located in Ipoh, Perak. The price tag is $110,000 (Ringgit).

I just spoke with my sister, who is handling the down payment and mortgage with the bank. She told me the bank has no problem with me being a foreigner as my mom's name is also in the deed. The bank requires that I provide them with all the documentation of employment, pay stub, tax return, citizenship certificate, etc. Basically, my family back home will be paying the mortgage. I don't know about the Perak state prerequisite for foreigners, so the registration part is still in question. However, I have my sister consult with her attorney today and see what they come up with. What is your take on this?

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Just a few word about myself, 6 years ago, I was very interested to buy one condominium unit in Penang, and I also got the information that it is possible for foreigners to buy without even any visa. However offers did not convince me much, as such condominium-towers were mostly sold to overseas Chinese, Indians and Arabs. I visited some of those high rising buildings.

What I saw within such compounds were not really people openly said, I want to live together after my retirement and all what was offered to me was about 2 or 3 times more expensive than in Thailand. - And in Thailand, in Jomtien in my second home I am now mostly together with Europeans, and some people from the USA and from Russia. Foreigners in Pattaya are totally different from these foreigners in Penang.

By my opinion Malaysia is still far behind Thailand for longstay and condominium construction for sale to foreigners. Not many nice offers for Europeans. While the law in Malaysia is not bad at all for longstay, there are not many Western people interested in them.

The other problem is about 'what to do there all the time' - in Malaysia there is little population and little public traffic - either you are a golf freak and drive your own car, or it's getting boring...

Luke, on 23 October 2009 - 12:32 PM, said:

Be careful with that.

Malaysia always had a minimum price and required upper housing categories for foreigners. As there is no visa etc. the minimum required value should be higher than MYR 250.000,- per object in case a foreigner is owner/ or co-owner.

I was visiting 6 years ago some townhouse constructions and other housing-village-constructions near Kulim Industrial Estate and Bukit Mertajam, as i know this area very well. No way, impossible to sell anything to foreigners. Either too cheap or otherwise restricted.

I am now not any longer interested to buy anything in Malaysia.

Thanks, Yohan. That was very helpful. I never like to commit in Malaysia either. How did you like it in Thailand? I think my wife would preferred Thailand than Malaysia.

I actually found the guidelines for foreigners investing in Malaysia and I think it does apply to my circumstances. So, the registration process will never fly. The banker whom my sister spoke to obviously have no idea what they were dealing with here.

"The purchase of any property by foreigners/foreign owned companies requires the prior approval of the Foreign Investment Committee (FIC) pursuant to Section 433A of the National Land Code 1965, irrespective of the amount of the purchase price.
With effect from 22 April 1998 and under the new guideline dated 18th May 1998 ("1998 Guideline") all foreigners/foreign companies can purchase all types of property in Malaysia, costing more than Two Hundred and Fifty Thousand Ringgit (RM 250,000). However, financing of the purchases must come from overseas."

Luke, on 24 October 2009 - 01:34 AM, said:

Yes, correct. This is it how it works in Malaysia. It is possible (= this means, NOT impossible for a foreigner) to buy some land for foreign ownership under certain circumstances. I think, also in Ipoh, the city you mentioned, as it is a fairly well-known business city along the Western Coast and many Chinese and not Malay people there, and there will be for sure some condominium tower or some expensive bungalow/guarded village for rich people. Golf-club with housings etc., something like that. And this is what you can buy as a foreigner.

But what to do, if it is NOT a selected property on approved land? Answer: NO WAY.

Generally, in Malaysia as I said before, there are already selected properties designed for sale for foreigners, first class housings, many of them condominiums, but also some houses with land in Penang, K.L., Johor Bahru, where the approval for sale will be granted without any troubles at all.

You show up with MYR 250.000,- in FOREIGN currency and you buy a selected property for foreigners and the sale will be permitted quickly without any troubles (or MYR 150.000,- for MM2H).

Malaysia is very strict about this minimum limit of MYR 250.000,- which excludes any furniture - some Malaysian companies tried to make a higher price over MYR 150.000,- ready to move in (or MYR 250.000,- if without MM2H-visa) - by offering best furniture, car-parking, nice garden etc. included in the sales contract, but this is now outlawed) - it must be the local average price level only of that area and the object must be the value of the land and the basic structure (walls/roof) of the building only.

To move finally into your ready object, you need money again, so the total required sum is much more than MYR 250.000,-.

Luke, on 23 October 2009 - 11:21 PM, said:

Thailand is politically less stable than Malaysia. It was always like that. - But this is the only disadvantage compared to Malaysia.

For sure to buy your CONDOMINIUM is cheaper than in Malaysia. Visastatus not important, even a tourist can buy.
In Thailand you cannot buy any land like in Malaysia as a foreigner however.

Basically you can buy only condominium-units, which must fit the Thai condominium law (usually a bigger building) not over 49 percent of the units sold to foreign ownership.

This object you can buy in your own name, everywhere such a building does exist in Thailand, and in major cities like Pattaya or Bangkok etc. there are plenty of such condominiums for sale. Also second-hand objects.

There is NO restriction regarding the minimum price and you can buy more than 2 objects. Even more than 2 units in the same house and often foreigners connect them to each other to have more space with connecting doors.
If it fits the Thai law clearly, you might buy and register it even within the same day using foreign currency, you have to ask for a special exchange form from the bank for the land registration office.

It's not far to Malaysia either in your case for a visit. Plenty of cheap international flights into Thailand. Why not?

This post has been edited by yohan: 24 October 2009 - 02:40 AM