Taxes, Banking and Money in Malaysia for Digital Nomads

You are a Malaysian tax resident for a year if you spend 182 days or more in Malaysia in that calendar year. Shorter stays can also count if they link up with a qualifying period in the year before or after, so long-stayers who split their time should keep careful records.

Non-residents are taxed only on Malaysian-source income, at a flat 30% on employment income.

Since 2022, Malaysia has taxed foreign income received in Malaysia in principle, but it immediately exempted individual tax residents. That exemption currently runs until 31 December 2036. In practice:

• A remote employee or freelancer who is a Malaysian tax resident and is paid by foreign employers or clients owes no Malaysian tax on that income, even when it is transferred into a Malaysian bank account.
• The exemption doesn’t cover income earned through a partnership, and it doesn’t cover work actually performed for Malaysian clients.
• Your home country may still tax you, depending on its rules.

This, combined with DE Rantau, is why Malaysia is so attractive for longer stays. Rules can change, so check the current position with a tax adviser before relying on it.

Resident rates on Malaysian-source income run progressively from 0% to 30%, with the first RM 5,000 taxed at 0% and the top rate applying above RM 2 million. Residents get personal reliefs, starting at RM 9,000 for the individual. Returns for a calendar year are due by 30 April (employment income) or 30 June (business income) the following year.

These are ballpark monthly costs for one person living comfortably in a one-bedroom condo on a monthly lease, eating out most days, with a coworking desk and a social life, at about RM 4.3 to the dollar.

Rough prices: a hawker meal RM 8 to RM 15, a meal in a mid-range restaurant RM 30 to RM 60, a flat white RM 12 to RM 18, a beer in a bar RM 20 to RM 30, a coworking day pass RM 30 to RM 60, a month of coworking RM 300 to RM 700, fibre internet RM 100 to RM 150 a month, and a Grab ride across central KL RM 10 to RM 25.

Cards and contactless payments are accepted almost everywhere in the cities. DuitNow QR codes are common at stalls and small shops, and Touch ‘n Go eWallet, Grab and bank apps are widely used. Hawker stalls and night markets sometimes still want cash. Rent is usually paid by bank transfer.

Most Malaysian bank ATMs don’t charge foreign cards a fee, though your own bank may. Always decline the ATM’s currency conversion. For rent and larger amounts, Wise and similar services can pay into Malaysian bank accounts at good rates.

A Malaysian account makes rent, DuitNow and e-wallets easier. Banks usually want a long-stay pass such as DE Rantau, an Employment Pass or MM2H, plus your passport, proof of address and sometimes a reference letter or minimum deposit. Maybank, CIMB, Public Bank, HSBC and Standard Chartered all serve foreigners, though policies vary by branch. On visa-free entry, most nomads manage with a foreign card and Wise.