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The Cost of Living in Malaysia

With an employment rate that vacillates between 95-97%, and a low poverty rate that mirrors this state of near-total employment, the outlook for Malaysian quality of life is generally very positive. The World Bank has deemed it as the #1 nation for providing access to credit, as well as fourth overall for “protecting investors,” which has made it, consequently, twelfth in the world for “ease of doing business.”

The nation’s openness to trans-national trade, and the economic benefits that this has garnered, can hardly be questioned. Yet many will still wonder whether this translates into a high cost of living, since Malaysia is not, after all, the only booming economy in Asia or the world. Though the country is acknowledged as an “upper middle income” nation by the World Bank, the question remains as to whether this equates to getting value for one’s money.Taxation in Malaysia

One prime contributor to the competitive cost of living in Malaysia is the low rate of taxation (with the notable absence of a capital gains tax on assets.) High-value items brought in from outside of Malaysia are likewise not taxed. Sales tax is generally only a worry when purchasing luxury or ‘discretionary’ items, alcohol, or cigarettes (and with cigarettes costing between RM 6.40 – RM 9.30 for a pack, a considerable market in illicit and smuggled cigarettes now exists.) Otherwise, the low taxation rate is particularly beneficial when paying for health care and medical services, which have been in abundance in the country for some time now.

Essentials and Conveniences

The cumulative price of daily conveniences is always important to consider, and Malaysia competes favorably here. According to the oddly reliable ‘Big Mac Index’ published by the Economist magazine – in which purchasing power parity in a nation is determined by how much the McDonald’s menu item would cost there as opposed to in the U.S. – a Malaysian sandwich would cost only ten cents less than one in China, a nation with far greater income disparity and wildly varying quality of life. With this in mind, carnivores will be pleased to notice that meat and fish prices are lower than they would be in the United Kingdom, and most varieties of meat can be found in Malaysian markets.

Fruits that might be considered ‘exotic’ throughout Europe and North America (e.g. magosteen, lychee, and the locally notorious durian) are also available in abundance within Malaysia, and cultivated locally – this leads to, as might be expected, lower prices for these fruits and their derivative products. Dining within restaurants, even those that knowingly cater to moneyed expatriates, is not a wallet-draining experience either – full meals here will seldom cost over $15 USD.


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Clothing can also be quite cheap in Malaysia owing to relatively low materials costs for cotton and silk (though the true ‘steals’ here may be garments tailored in the local fashion: Western-style business suits, formal wear, and underwear will be one exception to the cheapness rule.) If one really wants to show their enthusiasm for acceptance by the local culture, though, traditional Malaysian fashions like sarongs and baju karung (a knee-length blouse worn over a skirt) are readily available at prices that would be a bargain when compared with the prices asked by major online clothing retailers for a full outfit.

Technological Amenities and Electronics

Technological services are also considered, by ‘1st world’ standards, inexpensive in Malaysia. Telecommunications, always a crucial addition to the lives of expatriates with their personal business spread across multiple countries, are reliably quick in most urban or suburban areas, with monthly internet service fees of £7.00 to £9.00 a month (compare to U.S. prices of more than twice this for internet connectivity.) Computer hardware and other consumer electronics, meanwhile, are unsurprisingly widely available given Malaysia’s relative close proximity to these items’ countries of manufacture. Prices for cameras, televisions, home stereo systems and the like will not be overwhelmingly cheaper than they might be elsewhere, yet it will be highly unusual for them to have ticket prices higher than those in the U.S. or U.K. While on the subject of electricity, one can expect monthly utility costs for electricity to be around $30 USD in the average urban residence.

Overpriced Items: What to Avoid

Even with this general trend of affordability, expat residents are justified in wondering if there are situations in which products or services in Malaysia are overpriced. Cars purchased locally are one item that comes to mind. The public transportation system in cities like Kuala Lampur is not highly spoken of by those who can afford to be honest, making cars a highly desirable alternative. Perhaps in a move made to benefit the local car manufacturer Proton, a car as modest as a compact 4-door Volkswagen can cost 200,000 Malaysian Rinngit or roughly $650,000 USD.

During festival seasons in Malaysia, it may also be possible to encounter vendors who hike up the prices of their wares by about 10% in order to exploit tourists. While it is not currently within the rights of law officers to seize products they believe to be overpriced, the local Domestic Trade and Consumer Affairs Ministry does encourage consumers to spread awareness of individual offenders and boycott their products.


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