The Malaysian banking system is well established. Opening a bank account can be complicated for foreigners, particularly if they don't have the correct visa or work permit. But, once expats have an account, banking in Malaysia can be easy and hassle-free.
Money in Malaysia
The currency in Malaysia is the Malaysian Ringgit (MYR), which is divided into 100 sen (cents).
Notes: 1 MYR, 5 MYR, 10 MYR, 20 MYR, 50 MYR and 100 MYR
Coins: 5 sen, 10 sen, 20 sen and 50 sen
Banking in Malaysia
Although many expats prefer to bank with a foreign bank, since entities such as Bank of America or HSBC allow them to link to their account in their home country, there are numerous local banking options available in Malaysia. The country's central bank is Bank Negara Malaysia, while local banks include Bank Islam Malaysia, Bank Muamalat Malaysia, CIMB Bank, Public Bank Berhad and RHB Bank.
These local Malaysian banks have a range of services that make banking simple and convenient, including internet and mobile banking.
Banking hours are generally Monday to Friday, 9.30am to 4pm, and Saturdays from 9.30am to 11.30am.
Opening a bank account
A valid work permit is essential for any expat looking to open an account with a local bank. New customers are also required to provide their ID or passport, and evidence of residency or employment status. Recent bank statements and a letter of recommendation from their current bank may also prove helpful.
Credit and debit cards are widely accepted in Malaysia, although cash payments are still more popular in many establishments. Expats should be vigilant when using their credit or debit cards and should check their till slips carefully as credit card fraud remains a problem in Malaysia.
ATMs are widely available, and some accept foreign credit and debit cards.
Taxes in Malaysia
With a relatively low-income tax rate and few other taxes, Malaysia is an incredibly tax-friendly country. Malaysian law divides potential taxpayers into three categories: residents, non-residents and pensioners.
Residents are those in the country for 182 days or more in a particular tax year. People who fall into this category are liable to pay income tax according to a progressive scale from 0 to 30 percent.
Non-residents, or those in Malaysia for less than 182 days in a tax year, are taxed at a flat rate of 30 percent.
The third group consists of people over the age of 55 years who are employed in Malaysia for less than 60 days in a year. People in this group either receive a Malaysian pension or live on interest from banks, and are exempt from paying tax.
Many expats choose to go to Malaysia under the Malaysia My Second Home (MM2H) programme. These expats are required to pay tax only on income made in Malaysia, not on income or pension funds generated abroad.
Malaysia has double-taxation agreements with a number of countries in order to avoid foreigners being taxed twice over. Expats should ascertain whether Malaysia has such an agreement with their home country.