Best Retirement Countries in Asia

Retirement in Asia

In other areas of the business, we have had significant experience in providing advice to individuals working and retiring overseas. In that context, we would offer a few general comments about potential retirement into Asia. This is having regard to our general view that before deciding on a permanent retirement into Asia, or elsewhere, individuals and families should consider spending part of the year overseas as an interim step, or on a regular basis. If you haven't previously experienced living overseas on a long-term basis, you won't appreciate how much of a difference there is between being a tourist and a resident.

One of the attractions associated with retirement into Asia has been that offshore income - such as superannuation income streams or investment income generally - has often not being taxable in Asian countries. We expect this position to change over time, and anyone thinking of retiring into Asia should seek prior tax advice. As we mention elsewhere on the website, it can be more tax effective to remain an Australian tax resident, particularly if relying on superannuation income.

At this point in time, the purchasing of property in Asia remains largely a "cash" proposition, with little or no finance available locally from banks - although occasionally vendor financing is available. The latter tends to be short-term and it will often be reflected in the pricing of the property. The market is however becoming more sophisticated, and we are just beginning to see "quality" fractional ownership schemes focused on retirees.

Our 5 Top Asian Retirement Destinations

This is our subjective view of the top five retirement destinations in Asia. It doesn't present a scientific analysis, but there is a significant amount of both personal and professional experience underlying the assessments and commentary. Given that we are talking long-term retirement destinations, we have adopted a 10 to 20 year horizon.

Thailand
  • Relatively low living costs, but likely to rise in real terms as the country develops
  • Strong, independent, hospitable local culture which understands but doesn't necessarily adopt western values
  • Long term retirement visas are now available. There is a Ten-Year Thailand Retirement Visa (“O-X”), which is only issued to foreigners aged 50+ from certain countries (including Australia) for 5 years’ duration. It is renewable once more for a maximum of 10 years. There is the Thailand Elite Visa, with no age limits and various levels, and the One Year Visa ("O-A") which is open to more nationalities with lower financial hurdles.
  • Significant number of disparate locations (eg. Bangkok, Phuket, Krabi and Chiang Mai) attractive to retirees
  • Limited freehold ownership of local property possible - but no land, just apartments
  • Good medical and hospital facilities in Bangkok, Phuket and major urban areas
  • Retirees should not discount language issues outside major urban areas
  • Visa and government processes can be bureaucratic, but are improving
  • Regular political uncertainty
  • Continuing security issues in the southern Muslim provinces
  • Note that Thailand may begin to tax foreign income remitted into the country with effect from January 1, 2024
Sri Lanka - AVOID, improving but still recovering from a financial crisis
  • Low living costs, but likely to rise in real terms as the country develops
  • English widely spoken and understood
  • Hospitable local culture which shares certain Western underpinnings - including a legal system with a British structure
  • Significant number of disparate locations (eg. Colombo, Kandy and Galle) attractive to retirees
  • Structured retirement visa programme - "Sri Lanka My Dream Home"
  • Muslim extremist bombings in April 2019 raised concerns about security and the degree to which radical Muslim ideology has infiltrated the traditionally moderate Muslim minority community in Sri Lanka.
  • The country experienced a financial crisis in 2022 and is still recovering - whether that is significant in the long term will depend on whether it translates into a political crisis and impacts legal institutions.
  • Medical and hospital facilities are relatively poor outside Colombo
  • Infrastructure and roads, particularly outside major urban areas, are often poorly developed
Philippines
  • Low living costs, but likely to rise in real terms as the country develops but constrained by a very young population profile
  • English very widely spoken and understood
  • A very hospitable local culture with a very good understanding of Western social norms, but strong societal values
  • Structured retirement visa programme - "Special Resident Retiree's Visa"
  • Limited freehold ownership of local property possible - but no land, just apartments
  • Significant number of disparate locations (eg. Manila, Cebu, Palawan) attractive to retirees
  • Regular political uncertainty, but a strong democratic tradition. Continuing security issues in the southern Muslim provinces (Mindanao) and with China in relation to the South China Sea
  • Visa and government processes can be slow, bureaucratic and legalistic
  • Medical and health facilities good in the major cities (Manila, Cebu, Alabang) but access can be difficult, and facilities are poor in the provinces
  • Infrastructure and roads, particularly outside major urban areas, are often poorly developed
Vietnam
  • Low living costs, but likely to rise in real terms as the country develops
  • Strong, independent, hospitable local culture which understands but doesn't necessarily adopt western values
  • Very good internal security
  • Wide range of disparate locations attractive to retirees such as Ho Chi Minh City, Hanoi, Nha Trang and Dalat.
  • Outside major cities and tourist towns English is not widely spoken or understood
  • New laws allow foreigners with valid visas to own houses and apartments, but not land.
  • There is no formal retirement visa programme; retirees will need to utilise tourist visas and renew them every 3 months. The process is bureaucratic and can vary by Immigration office.
  • Medical and health facilities are good in HCMC and Hanoi but facilities are poor in the provinces
Malaysia - AVOID

Malaysia was one of the first Asian countries to introduce a well-developed and structured foreign retiree program - referred to as "Malaysia My Second Home" (MM2H). The program was frozen in July 2020 pending a review and then reactivated with effect from October 2021 with new, substantially higher eligibility criteria, apparently with the intention of attracting "wealthier foreigners".

We summarise the new criteria in the table below, and it's difficult to understand whether Malaysia are simply trying to move abruptly "upmarket", or just have a total misunderstanding of the expatriate market and the need for stability and trust. Nevertheless, the Government initially sought to apply the new criteria to expatriates on existing visas, providing 12 months "grace". Following significant criticism the Government - as we anticipated - eventually "grandfathered" existing visa holders.

However, the initial approach was simply unacceptable and unethical and flagged that Malaysia can no longer be recommended as a foreign retiree destination. Irreparable damage has been done to Malaysia's reputation as a retirement destination. Whilst Malaysia has the right to simply say we don't want international retirees, they must always deal with existing visa holders equitably and visa holders should be able to expect stability.

Very unsurprisingly, we believe the impact of the new ruleswas a 90%+ drop in applications and revised rules were announced in December 2023 which changed eligibity requirements yet again.Whereas MM2H eligibility was previously based on a deposit of 1 million ringgit (~AUD330K), applicants now have the choice of opting for a fixed deposit of 500,000 ringgit (~AUD165K), 2 million ringgit (~AUD660K) or 5 million ringgit (~AUD1.65M) based on three tiers – Silver, Gold and Platinum. Silver and Gold tiers offer five-year and 15-year residency respectively, while the Platinum tier offers eligibility for permanent residency.

We continue to recommend an AVOID with respect to the MM2H programme - "trust is a must" with long term retirement programmes and Malaysia needs to now demonstrate consistency in terms of its approach and that expats can count on ethical behaviour. Another problem for Malaysia is simply whether the programme is actually competitive and attractive versus its Asian neighbours.

Malaysia - SEE COMMENTARY ABOVE
  • Relatively low living costs, but housing costs can be expensive relative to other Asian destinations, depending on location
  • English widely spoken and understood
  • Culturally very diverse, with significant Chinese and Indian populations apart from the dominant Malay population (60%)
  • Very good quality medical and health facilities available
  • Good infrastructure in major urban environments and generally
  • The earliest and most comprehensive retiree visa programme in SE Asia - "Malaysia My Second Home' - providing 10 year visas and the ability to buy property freehold
  • Significant number of disparate locations (eg. KL, Penang, Sarawak) attractive to retirees
  • Possible extension of Syariah (Sharia) law outside the Muslim state of Kelantan, and the introduction of "hudud" - we do not support the retirement to any country that applies hudud; whether in principle it is restricted to Muslims, or otherwise.

Indonesia (and Bali)

The most obvious location missing from the list above is Bali - however, Bali is a part of Indonesia and can not, or should not, be considered in isolation. Indonesia is the world's most populous Muslim nation and, while it has a long history of tolerance and moderation, some relatively recent events suggest that a less tolerant environment may be developing, including a greater prevalence of Sharia law.

Our basic concern with respect to Sharia law is that, apart from the medieval nature of the penalties, it is not compatible with a separation of powers - judicial, executive and legislative - and religious changes could significantly impact the future property, civil and other rights of non-Muslims. Our view was reinforced with the previous announcement of proposed changes to the criminal code in 2020 which did not proceed but should have had any proposed retirees reconsidering any investment in Indonesia and current retirees pondering a withdrawal.

Nevertheless, widespread changes to the criminal code enacted in December, 2022 included a ban on sex outside marriage (commencing in 3 years) and we may be witnessing a resumption in the trend towards increasing Muslim ascendancy in Indonesia. Even if this doesn't prove to be the case, why take the risk?

Consequently, while Bali and Indonesia generally are likely to remain wonderful tourist destinations, or indeed great locations to work remotely on new digital nomad visas, different considerations clearly come into play when choosing between tourist destinations for a few weeks or months and long-term retirement destinations for 10 to 20 years.

Note, for completeness, that Indonesia announced a "second home" visa at the end of 2022. The visa allows foreigners to stay in Indonesia for 5 to 10 years, subject to a number of requirements, such as the depositing of Rp2 billion (approx USD130,000) in an Indonesian government owned bank - more details are available at the Second-Home Visa webpage.

Cambodia

Mention should be made of Cambodia's relatively recent introduction of a Retirement Visa - although usually requiring individuals to be age 55 or older there may be situations where candidates younger than 55 can be approved. The visa is, however, only issued for 12 months, but can be extended indefinitely and does provide the ability to rent and own property (with some restrictions) and purchase a car.

This is a recent visa and we will provide more commentary regarding details in the future - our focus is on individuals retiring into countries on a long-term basis, and consequently that is why we like to see these programs in place and working for some period before making any assessments.

 

 

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