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New Malaysian nomad visa

#2
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.
 
#4
JackAlabama said:
Looks good. Pricing is also reasonable and fair for asia. Requirements as well, especially compared to Thailand which always looks to stretch pricing.
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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?
 
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#5
backpacker said:
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?
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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

www.expatgo.com

Malaysia Embraces a New Digital Economy – Will Expats Benefit?

After simmering in the works for months, Prime Minister Ismail Sabri made the official announcement in July as the government rolled out its 'Malaysia Digital' initiative, which includes a Digital Nomad program.
www.expatgo.com www.expatgo.com


... 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...
 
#6
Mike Forman said:
... 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...
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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.
 
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#7
backpacker said:
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?
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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.)
 
#8
JackAlabama said:
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.)
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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.
 
#11
backpacker said:
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.
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Malaysia had territorial tax. To apply you must be employed by a foreign company, therefore you won't pay taxes on that income.
 
#12
hkrlh1 said:
Malaysia had territorial tax. To apply you must be employed by a foreign company, therefore you won't pay taxes on that income.
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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).
 
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#16
JonnyStekkino said:
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.
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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.
 
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#18
JonnyStekkino said:
Anyone have any info regarding the taxation part?
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www.offshorecorptalk.com

Tax Treatment of Foreign Income Received in Malaysia

Good article on tax treatment of foreign income received in Malaysia: Technical Guideline on the Tax Treatment of Foreign Income Received in Malaysia — Orbitax Tax News & Alerts There's a temporary exemption for certain foreign-source income till 31 December 2026 provided that the income has...
www.offshorecorptalk.com www.offshorecorptalk.com
 
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