Financially speaking, moving from the USA to Canada in 2001 was a very smart move, assuming the bulk of your assets were in US Dollars. Luckily, Diane and I left California for Calgary soon after we met during the weakest stretch for the Canadian Dollar in over 50 years. Exchanging one dollar meant receiving back almost $1.58, saving us almost $20,000 on the down payment of our first house. Conversely, when we sold the house for double what we paid only six years later and moved back to California, the Loonie (Canada’s currency) strengthened so much that we received about $0.93 US back for every $1.00 Canadian. Had it remained the same, it would barely have made sense to sell.
Recently, I posted about the Malaysian ministry enforcing stricter income verification policies for MM2H applicants that might potentially spell trouble for Americans. Issued as a ten-year social visit pass renewable indefinitely, the MM2H is an attractive long-term visa not requiring any “visa runs” like neighboring Thailand, albeit with more paperwork and much larger financial requirements. Navigating the tedious procedure and emailing Joy-Stay, (our agent) for six months now, I’m thinking we may have finally hit a patch of bad timing through no fault of our own. Almost too coincidentally, an ambiguously written notice from Bank of America arrived last week describing what sounds like a mass consolidation of bank branches that might be a nail in the coffin for the ministry’s “verification letter” from our financial institution.
In a nutshell, the issue involves the 14th item on a checklist of 26 tedious conditions required for submission of an application. The ministry requires proof of steady income totaling MYR 10,000 per month (about $3,450 USD). Ironically, the visa does NOT let an applicant work in Malaysia meaning they eliminate this condition upon approval. Even odder, only wealthy people with enormous interest income or holders of large pensions could satisfy the “income requirement” without using current salary or perhaps self-employed business income. Ideal for overseas applicants about to retire like us, they will allow an applicant to use their spouse’s salary as long as it’s deposited into a joint account and since I’ve been a house husband for one year now, we are using Diane’s salary on our application.
Proving the income is another issue. Requiring three months of bank statements and salary slips that match the relevant income, the ministry wants “original statements” or “certified true copies”. Initially planning on using the second option, a notary working for Diane’s company informed us it’s illegal in California to notarize anything for use as a “certified true copy” except special legal documents. Explaining this to Joy-Stay, I moved on to option one but found out there is no such thing as “original statements” anymore since everything related to finances in the USA is electronic.
Harkening back to the good old days, the ministry likes to see high glossy paper statements with pretty graphs, colors and even an “official bank seal”. Informing me my only option was printing my own statements at home because all Bank of America’s branches have had color printers removed for cost purposes, I grew frustrated and wasted $60 on a Canon ink jet color cartridge only to find out that even my online bank statement has one small little blotch of red and 8 pages of black and white prints in very basic font.
And that’s not even the hard part. Practically laughing at me, the clerk at Bank of America had to get the manager when I read this condition for the application:
The latest 3 months bank statements which are e-statements must be supported by an original letter from the bank verifying the validity of the accounts and addressed to:
To Whom it may concern
After several appointments, the bank informed me only a centralized banking center in Tampa can give verification of client information and of course, the branch is unable to receive the letter by fax or email so I’d have to go home, call from my home phone and have it sent to my email. Unwilling to give anything but the last 4 digits of a an account, I learned that in a post 9/11 world a bank can barely even verify your assets in writing thanks to strict anti-terrorism rules that serve the interests of policy makers trying to show America how they’ve secured the homeland against all foreign threats. The image below shows how the U.S. government’s banking privacy rules “protect us all from harm”.
Eventually I explained all this to Joy-Stay and finally got them to accept a the very scantily written form letter from the centralized banking center stating my full name and confirming I did have a checking account as of a certain date identified as XXX-XXXXXX-1234. Requiring this documentation with the application, you would assume it sufficiently satisfies the ministry’s guidelines. Unfortunately, there is yet another step. Along with the above referenced information, item # 14 asks for:
Bank Authorization Letter to authorize the officers at MM2H centre to verify your accounts with your financial institution.
Printing out the form our agent sent me, it occurred to me that this letter is basically “verification of the verification”. Already possessing a letter from the financial institution that confirms an applicant’s bank statements are legitimate, the ministry supposedly uses the “bank authorization letter” after receiving an applicant’s paperwork. Sent by snail mail, the ministry expects your financial institution to open and read a letter sent from a foreign government blindly asking for vital information on a client’s bank account number and assets. Roughly akin to a spam email like when a Kenyan tells you you’ve inherited money and you should click here, I’m wondering what country still has a banking system that would take that seriously.
Most Americans know how any bank employee would react to the “bank authorization letter” (Hint: Unless a bank employee wants to join me on the unemployment line, the letter hits the shredder or perhaps gets passed to a supervisor so they can trash it.) Fortunately, the “bank authorization letter” has generally been overlooked for American applicants because they’re aware of stringent US banking rules. Effective November 1st, 2014, however, someone decided to stop ignoring it, so they’ve started “selecting” certain American applications for enforcement of this very redundant piece of documentation.
Voicing my concern, our agent responded by saying that the rule is brand new and one of her American clients that recently filed their application has been “selected” for more verification but she has no idea what the results will be. Four weeks later, I’m told there is still no decision or word on how the ministry will handle it and they’ve even tried asking the Malaysian Embassy in the USA for help as if they can somehow change US privacy policies as they apply to banks.
I forgot to mention the “cash-in-hand” rule that requires an applicant to show liquid assets of RM 350,000 (about $105,000 USD). Separate from the income requirement I’ve discussed above, the rules are the same except they will consider investment assets along with CD’s, cash or other liquid assets. Financial advisers generally tell clients to keep no less than 5% but no more than 10% of assets liquid. Doing the math, this means an applicant would need between $1 million and $2 million in assets if they held that amount in “fixed deposits” or CD’s.
Although we’ve increased our net worth in five years through diligent investing, we are not wealthy and don’t have a few million lying around. Therefore, I decided to use our emergency money (in a CD) along with brokerage assets in our retirement accounts to satisfy the “cash-in-hand” requirement which our agent agreed to. U.S. brokerage firms don’t necessarily have to follow the strict banking rules and after some conversations with our online broker’s customer service, I’m confident they have no problem answering the ministry’s request. They even put notes on my account instructing clerks not to treat a letter from the Malaysian government as spam. Kudos to the Wall Street lobbyists for once.
Figuring less paperwork is better now that stricter rules are in place, I sent an email to our agent asking them NOT to use our emergency funds in a fixed deposit as partial consideration for our “cash-in-hand” and instead, consider only our brokerage assets. Surprisingly, her response gave me even more cause for concern:
Recently, some officers at the Ministry have stressed that the MM2H committee prefers to see the actual cash available in normal savings, checking or FD accounts. Therefore, we hope to obtain a more definite answer from the Ministry by showing them the last 3 months of your 3 accounts with XXXXXXX
Feeling like Bill Murray in Groundhog Day, I responded by once again explaining that fixed deposit interest rates are near zero in the USA and no sane investor would keep over $100,000 USD in a checking account or a CD that earns pennies every year. Even wealthy investors would probably have minimal amounts in US-based fixed deposits. Responding with an unanswerable question, our agent inquired what I think the value of our investments will be over the three-month period before our application filing. (January through March 2015).
If I knew the answer to that question I’d be a prophet. Explaining again that our assets are mostly mutual funds where the values fluctuate depending on market conditions, I reassured our agent that even a catastrophic market collapse like 2008 would still leave us with enough to satisfy the ministry’s “cash-in-hand” requirement but I suspect she’s feeling very uncomfortable about changes that threaten her livelihood. Although nobody has yet been rejected based on this strict enforcement, it’s starting to sound politically motivated to me and as potential expats, its best to steer very clear of any political opinions or viewpoints.
Making the situation a bit worse, the ambiguous notice from Bank of America implies that by next summer our only “banking center” will be in San Francisco, 24 miles west and a $12 commuter train ride away. Asking my local Bank of America branch to allow their address on the “bank authorization letter” was hard enough and since we can’t file until April, I’m not even sure if the same manager will still work there. Calls to Bank of America inquiring about the notice led nowhere and naturally, nobody in the Too Big to Fail Bank can give any additional information about the notice.
Feeling like I’m caught in a system that no longer wants us, I’ve written another extensive letter to our agent providing some recent statements and asking for more clarity. Unlike earlier emails, I’m beginning to stress that we’d be really unhappy shelling out $1,500 in fees if they can’t guarantee approval with the same certainty they did when I started the process. Once we close escrow, we’ll have 30 days until we’re homeless and rentals here in The Bay Area are too expensive even if there were any available. Knowing we can’t stay at Diane’s relatives very long without becoming a burden, I’m a bit unsure what to do at this point.
Thanks to several generous folks we met through this blog who agreed to meet, provided their email addresses and even gave us the names of similar agents for procuring Thai visas, we feel confident we’d have some guidance if we choose Thailand. Because the timing becomes tricky and we’ll no longer have employment income, I’m a bit concerned about flying to Malaysia while the visa status remains unresolved given the stricter rules but don’t think we’ll be able to wait it out in North America. Barring a situation where we can’t sell the house, we’ll need to flee like refugees.
Summarizing, American citizens thinking of applying for an MM2H visa for retirement in Malaysia may want to sit tight, consider another option or somehow make friends with a high-ranking government official that sits on a Banking Committee and can manipulate the system in your favor. Meanwhile, we are off to Canada soon for a cold Christmas with Diane’s family when I will be too busy eating ketchup potato chips, Coffee Crisp bars and KD (Canadian mac & cheese) to care about the dilemma.
The Experimental Expats want your opinion: Please comment and help us out:
Should we leave for Malaysia after we close escrow even if the status of a visa approval is not certain or should we go to Thailand instead ?
Coming this weekend: The Galapagos Islands Cruise : Day 3
If you missed any, Day one is here and Day two is here