Foreign Residents Continue to Deliver a Major Boost to Malaysia’s Economy

Expats, international students, foreign property buyers, and MM2H participants are injecting billions into Malaysia each year, reinforcing the economic case for keeping the country attractive to international residents.

Foreign residents continue to play an important role in Malaysia’s economy, with international students and expatriates alone estimated to contribute more than RM84.2 billion annually, according to property technology group Juwai IQI. The figures underline the economic value of Malaysia’s relatively open approach to international residents, even as some recent policies and administrative changes have made the country feel less welcoming to foreigners.

Juwai IQI reported a 52.5% increase in overseas property enquiries in 2025, while the number of expatriates reached 120,183 by the fourth quarter of 2024. International student numbers have also climbed sharply, with Chinese enrolments reportedly approaching 200,000, up from 82,000 in 2022.

The numbers are substantial. Juwai IQI estimates that Chinese students contribute an average of RM46,000 each to the Malaysian economy annually, meaning a cohort of 200,000 would represent approximately RM9.2 billion in annual economic activity. Expatriates are estimated to contribute RM75 billion to GDP, equivalent to about 4.8% of the national economy, while contributing roughly RM100 million in income tax each year.

Malaysia’s appeal as an international education destination is supported by more than just industry estimates. Official figures show that international enrolment across Malaysian public and private higher education institutions stood at 155,986 at the end of 2024, with the government continuing to target further growth.

MM2H is another important component of the international-resident equation. Juwai IQI says there are now more than 58,000 active MM2H visa holders, with the programme having generated RM11.9 billion in economic contribution between 2002 and 2019. Their spending extends well beyond property, supporting everything from healthcare and hospitality to retail, transportation, domestic travel, and professional services.

There is, however, an interesting disconnect between the economic contribution of foreign residents and some of the policies they encounter. Foreigners are excluded from various subsidies, face additional charges such as tourism taxes, and have seen work visa and approval requirements become more complicated or expensive. None of these measures necessarily threatens Malaysia’s attractiveness on its own, but together they can create the impression that international residents are valued economically while being treated somewhat differently on the ground.

Despite this, Malaysia remains highly competitive. Kuala Lumpur accounts for 44% of foreign property enquiries, attracted by relatively affordable high-end condominiums, international schools, hospitals, and its broad range of lifestyle options. Sabah follows with 22%, while Johor, Selangor, and Penang round out the five most popular destinations. Johor’s appeal is increasingly tied to the Johor-Singapore Special Economic Zone and the upcoming RTS Link, while Penang continues to attract retirees, investors, and medical tourists.

Malaysia’s enduring strengths are familiar ones: a relatively affordable cost of living, excellent food, warm weather, cultural diversity, good infrastructure, widespread use of English, and a well-developed private healthcare sector. Those advantages continue to make the country attractive to both working expats and retirees.

The message from the RM84.2 billion figure is therefore fairly straightforward. International residents are not simply occupying apartments, enrolling their children in schools, or spending their retirement savings here. They are contributing meaningfully to the Malaysian economy.

As Malaysia competes with other countries for international talent, students, investment, and retirees, maintaining that appeal makes sound economic sense. A little more consistency between welcoming foreign residents and the policies they encounter once they arrive would arguably make an already attractive proposition considerably stronger.

Sources: Juwai IQI; New Straits Times; Ministry of Higher Education; Department of Statistics Malaysia.

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