Indonesia vs Malaysia: Taxation, Retirement and Social Rights for Long-Term Immigrants

Welcome to Jetoff.ai detailed comparison between Indonesia and Malaysia, focusing specifically on the criterion of Taxation, Retirement and Social Rights for Long-Term Immigrants. This analysis aims to provide you with clear insights.

Summary & Key Insights

Pros & Cons

Indonesia

Pros
  • Tropical climate, Rich culture
Cons
  • Complex tax system, Limited access to social security

Malaysia

Pros
  • MM2H program, Relatively affordable international schools
Cons
  • Strict property purchase requirements, Increasing cost of MM2H.
Alert

Seek professional financial and legal advice before making any decisions regarding retirement and residency in Indonesia or Malaysia.

Taxation, Retirement and Social Rights for Long-Term Immigrants

Mira:

Let's discuss taxation, retirement, and social rights for long-term immigrants in Indonesia and Malaysia. It's crucial for financial planning.

Leo:

Indeed. Let's avoid relying on instant noodles in retirement.

Mira:

Consider a retiree in Bali. Indonesia's tax residency rule means taxation on worldwide income if you stay over 183 days annually.

Leo:

Similarly, Malaysia taxes residents who stay over 182 days, though some foreign income might be exempt.

Mira:

Indonesia's past tax amnesty programs offered relief, but they aren't consistently available. Malaysia's "Malaysia My Second Home" (MM2H) program provides tax benefits, especially for foreign income remitted to Malaysia.

Leo:

MM2H offers perks but requires meeting income and deposit requirements, and these requirements are becoming stricter.

Mira:

Foreigners in Indonesia can't directly access the national pension scheme. Retirement funds must be self-managed or through international schemes.

Leo:

In Malaysia, non-citizens who contributed to the Employees Provident Fund (EPF) can access it, but withdrawals have restrictions and tax implications.

Mira:

Healthcare and education access for immigrant retirees? Indonesia's public healthcare may not be efficient; many expats opt for private insurance. International schools are expensive.

Leo:

Malaysia's public healthcare is accessible, but private insurance is common for faster service. International schools are relatively less expensive than in Western countries.

Mira:

Property ownership?

Leo:

Buying property in Indonesia as a foreigner is complex. Leasehold is common; freehold is rare and restricted. Nominee arrangements are risky. Malaysia allows foreign property purchases, but minimum prices and state regulations apply.

Mira:

So, for retirement planning?

Leo:

Thorough research is essential. Consult a tax advisor, understand residency rules, and factor in healthcare and education costs.

Mira:

Careful planning is vital in both Indonesia and Malaysia, despite their beauty.

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