The Foreign Investment Act (Act Number: 11/2024), which came into force on 03 December 2024, is the main legislative document which sets down the criteria and approval process for FDIs.

Companies and investors of various nationalities are allowed to have full ownership of specific sectors. 

There are other sectors in which foreign investors may partake/invest in along with a local shareholder/partner – under a joint venture model.

Yes, depending on the sector that the investment will be made there are minimum investment requirements.

For a foreign investor to invest in the Maldives an application has to be submitted to the Ministry of Economic Development and Trade to obtain a ‘No Objection Letter’ for investment. Including the first step, the foreign investment application process is a 4 stage process, where each step needs to be completed before proceeding to the next, as outlined below. 

• Step 1 – Obtaining No Objection Letter
• Step 2 – Completing Business Registration
• Step 3 – Obtaining Foreign Investment Licence
• Step 4 – Signing Foreign Investment Agreement

An administrative fee of USD 5,000 will have to be paid prior to the signing of the Foreign Investment Agreement.

As per the new Companies Act of the Maldives (Act No. 7/2023), which came into force on 01 January 2024, single shareholder companies are now allowed in the Maldives.

Foreigners can conduct business in the Maldives in the form of a company or partnership.

Business registration can be either by (a) re-registration in the Maldives, effectively operating as a local branch in the Maldives, (b) incorporating a subsidiary entity in the Maldives or (c) acquiring shares of a locally incorporated company. 

A private limited company incorporated in the Maldives must have:

• minimum one shareholder – subject to sector specific shareholding requirements under the Foreign Investment Laws;
• at least one board director who is resident in the Maldives (i.e. a Resident Director); 
• a tax responsible person; and
• a local registered address.

Yes, depending on the sector of investment, sector specific operating licences/permits will have to be obtained from the relevant Government Authority before commencing business operations. 

The new SPV will be automatically registered for income tax with the Maldives Inland Revenue Authority (MIRA) upon completion of business registration at the MED.

Upon completion of the FDI set up process, the investor may approach any of the local banks operating in the Maldives to open bank accounts. 

There are no specific regulatory requirements to have a particular type of bank account or to have the bank account in a particular currency. It is noted that it is usual practice for foreign parties to have both USD and MVR (Maldivian Rufiyaa) bank accounts – as these are the prevailing currencies from which local and foreign transactions are carried out in the Maldives.

No, there is no requirement by law for incorporated companies or re-registered companies to have physical office premises.

Yes, foreign employees can be employed and will be allowed to work in the Maldives under a work permit/visa – which will be issued under a quota approved under the name of the new SPV.

Below are the main taxes applicable in the Maldives Jurisdiction:

The Maldives has a Double Tax Avoidance Agreement (DTA) with the United Arab Emirates (UAE). Hence, if the taxable transactions fall within the scope of the said DTA agreement, the investor will have the benefit of being taxed in one country.

There are no restrictions on repatriation of business profits or earnings from FDIs. However, withholding tax at 10% is charged on repatriated dividend income.