Malaysia, Thailand to woo foreign investors

Malaysia and Thailand have jumped onto the global bandwagon of wooing foreigners to live and invest in their countries to give their economies a boost.

Both Southeast Asian nations launched similar initiatives earlier this month. The slowest growing economy in Southeast Asia is about to be made by record inflation there and a weak currency.

Malaysian Home Affairs Minister Hamzah Zainuddin said that his ministry is confident that the PVIP can attract more foreign direct investment that will strengthen the economy and increase job opportunities for locals.

The program is open to individuals with an offshore income of more than US $100,000. They must have at least US $218,000 in their bank accounts and pay a one-time fee of about US $44,000 and US $22,000 per dependent.

The Home Affairs Ministry is targeting a total of 1,000 participants in the first year of the programme. The participants are expected to generate around US $43 million in revenue for Malaysia, as well as some US $218 million in fixed savings.

Malaysian business leaders CNA said that such a programme could be a lucrative source of revenue from abroad, but pointed out that the current PVIP framework lacks concrete measures to attract premium investors.

The plan will work because the applicants who come in the country will spend money, and if they bring their families, there will be a trickle-down effect on the economy, said Shaun Cheah, executive director of the Malaysian International Chamber of Commerce and Industry.

It's a long-term visa, it's 20 years, and participants will invest in businesses here too. He said that it is also the talent and know-how that they bring to the economy.

Mr. Cheah said that Malaysia remains one of the more attractive places for investments. He asked if people with passive income, such as celebrities, artists, and investors, will find Malaysia to be a place where they can get high returns.

He said that the programme must put in some funds in this country and with the weaker foreign exchange that means they will erode the value of their funds parked in Malaysia.

There are aspects of the programme that need clarity, he said.

What are some of the areas that they can invest in? The PVIP allows the person to work. He asked.

Carmelo Ferlito, the chief executive of the Centre for Market Education, said he is skeptical of the concept of residencies leading to investments.

I think it is like mixing up two different categories or approaching it from probably the wrong angle. Investments are brought in by businesses and not necessarily by wealthy people, he said.