Monday, November 7, 2011

How I Moved to Penang, Malaysia to Live (Part 1)

I just received a comment from a reader asking me to tell my story of moving to Malaysia. In his comment he stated that he couldn't find much on the web about Americans moving here, but a great deal about Brits who have moved here. I completely agree with him. So I will try to tell my story again in a summarized form. I originally started this blog on another platform, but because of the difficulty using that platform I moved my blog here. My original blog was started  in April of 2011 and can be found here. I actually took over a blog that had been dormant for some time. You can visit it to see more details.

When I decided to move to Penang I too had a great deal of difficulty finding information on exactly how to do it. I found little useful information on the web about retiring in Malaysia. Most of the information concerned moving to Central America and Europe. The expat websites that had information regarding Americans usually had one or two useless interviews with Americans living here. They were usually written by a bored housewife, who had to move here because of her husbands job. This information, I found, was not informative, usually inaccurate and of no help. There are a couple of blogs on American expats living in Malaysia, but they consist mainly of recipes and arts and crafts. No help to the potential retiree or anyone planning on moving here. The rest of the information in these expat sites is in regards to buying expensive real estate, advertising moving companies and selling books on how to move overseas.

I did find a site for Americans living in Kuala Lumpur, the capital. It is basically a site for wives of Americans working here. This site was useless. I contacted them, but never got an answer. There are many websites for British people living here, but their information is geared to UK citizens. You can make a post here, but you either won't get a response or more than likely they can't help with your situation. The reason for so many British sites is that Malaysia is a former British colony and many older expats here think it still is. British English is spoken here, they drive on the left side of the road and many British customs and mannerisms are evident here. So the transition form the UK is much easier than that from the US.

As I could find little or no information on Americans moving to Malaysia, I had to do everything from total ignorance. Luckily I had a friend, who is Malaysian and lived here, who was able to help. First of all I found the Malaysia My 2nd Home (MM2H) website which is run by the Malaysian Ministry of Tourism. Malaysia offers a long term (10 year renewable) social visit visa. The site can be found here. There are 2 options for applying to this program. One is a do it yourself plan and the other is to hire an agent. I went the agent route since I was 12,000 miles away and I would rather pay someone to do the legwork and make sure it was done right. The agency I used was Comfort Life and I was very satisfied with their services. In order to get my visa I had to place about $40,000 into a fixed deposit account in a major Malaysian bank. At the current exchange rate I believe that amount is almost $50,000. (When I use $ I am referring to USD). After 2 years you can take a large chunk of this for medical expenses, buying property or education). The MM2H site explains the other requirements.

Getting the MM2H visa was extremely easy. A very short time after I applied I received I was approved for the visa. I had 1 year to go to Malaysia to pick up my visa. At the time of my visit I was taken to the bank to set up my fixed deposit account. Once I got my visa the next step was to sell my house and move. Easier said than done.

I put my house in Boston up for sale in October of 2007 and I sweated, as the housing prices fell and the housing market went down the toilet. Finally I sold my house in May of 2008. I planned to leave for Boston on July 3, so I had a lot of work to do. I decided not to bring my furniture and appliances with me. This was costly and I was not sure if my furniture would fit in my new home, when I purchased it. The electrical system is very different here, so the electrical appliances could not be used. I decided to sell everything and buy everything new.

The biggest problem and by far the biggest source of anger and frustration was with the American banking system. Thanks to the Patriot Act, the banking system in the United States is like no other country in the world. It works against the customer instead of with or for the customer. My biggest concern about moving to Malaysia was being able to transfer money from the US to my accounts in Malaysia. I went to the big banks with branches in Malaysia. I remember seeing Citibank and Bank of America in Malaysia, so I naturally went to these banks in Boston. They both promised me I could easily transfer money to their branches in Malaysia. They both lied in order to get me to open an account with them. One bank required me to keep a minimum of $250,000 and the other $500,000, just to be able to make periodic transfers. I don't know how much most retireeSo that is what I am doing now. I use my bank's Internet banking system to pay bills back home or send relatives Christmas money. The only inconvenient thing about using your home bank in the US is that you can't have a foreign address. If you have a foreign address to have your statements sent, you will not be allowed to use Internet banking. The banks say that this is a rule of the Department of the Treasury. I checked this out and it is not true. The banks can allow foreign addresses as long as the make yearly reports of these addresses. This will cost the banks a little bit of money, so they naturally refuse to do it. Big banks only know how to take from the customers, not give in the form of services. On the subject of banking there is one inconvenient and highly unfair requirement the US government shackles expats with and that is the FBAR. This is the Foreign Bank Account Report, which has to be filed every year. This requires the expat to report all foreign bank accounts of over $10,000. These accounts include investment accounts, checking accounts, joint accounts of any kind or any other account with your name on it. If you had an account where the balance was $10,000 for just one day, you still have to report it. The penalty for not reporting or even reporting late is extremely and unnecessarily harsh. Groups like American Citizens Abroad are trying to repeal these draconian laws and hopefully they will succeed.

As this post is becoming quite long I will separate it into 2 parts. I will finish it in the next post.

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