Foreign Direct Investment (FDI) in the Maldives:

A Quick Guide on Approvals and Process under the Foreign Investment Law

22 February 2024

Foreign Investors are required to obtain a foreign investment approval from the relevant Maldivian regulator before investing, buying assets or establishing companies in the Maldivian jurisdiction, a process referred to as inbound investment.

This guide explains the regulatory framework for inbound investment under the Maldivian Foreign Investment Law. It introduces the regulators and principal legislation and policy for inbound investment activities and outlines the procedural steps involved in obtaining the foreign investment approval and registering a business to invest or acquire assets in Maldives.

1. Legislative Framework

The principal legislation governing inbound investments under the Foreign Investment Law, include the:

  • Foreign Investments Act (Act No: 25/79)
  • Foreign Direct Investment Policy gazetted on 11 February 2020
  • Business Registration Act (Act No: 18/2014)
  • Business Registration Regulation 
  • Companies Act (Act No: 7/2023)
  • Partnership Act (Act No: 13/2011)

2. Regulatory Authorities

The principal regulator involved in approving a Maldivian inbound investment is the Ministry of Economic Development (MED) – the local commerce bureau.

Invest Maldives is the government hub, established under the MED, supporting investment in the Maldives and the government agency at which all foreign investment applications have to be filed with and subsequently scrutinises the investment application before deciding to grant foreign investment approval.

3. Foreign Direct Investment (FDI) Policy

The FDI Policy, which came into force on 11 February 2020, is the main document which sets down the criteria and MED approval process for FDIs. Under the FDI Policy, there are two routes for the MED approval process – that is ‘Automatic Approval’ and ‘Government Approval’ route. 

  • Automatic Approval is a guaranteed approval process for selected sectors in which the investor meets the shareholding percentage and investment requirements provided in the FDI Policy. 
  • Government Approval is an approval process applicable to sensitive industries or sectors for investment in the Maldives – which the MED will have to obtain approval of stakeholder agencies before granting approval. 

Regardless of the applicable route, all FDIs will have to undergo the application process provided in the FDI Policy in order to obtain the foreign investment approval confirmation issued by the MED.

4. Process for FDI Approval

In order to obtain the foreign investment approval, the investor must submit the foreign investment application to Invest Maldives. The foreign investment application process is a 3 stage process, where each step needs to be completed before proceeding to the next, as outlined below.

Documents to be filed as part of Foreign Investment Application Package

Documents required by MED, include:

  • A prescribed filing form for inbound investment – i.e. the Foreign Investment Application Form.
  • A letter of financial credibility from a recognised financial institution.
  • A resolution of the board of directors or resolution on investment – if the incoming shareholder of the SPV to be locally registered is a foreign company.
  • The certificate of incorporation, memorandum of association, articles of association and company profile sheet in respect of the foreign entities that will be holding shares in the SPV to be locally registered*
  • A photocopy of the investor’s identification document (passport) – if the incoming shareholder of the SPV to be locally registered is a foreign individual*
  • A photocopy of the identification document (passport) of the proposed directors in the SPV to be locally registered*

*To be submitted in Certified True Copy form.

The submission and processing of the application by the Invest Maldives involves:

  • Submission of application package – This includes an application form together with the supporting documents.
  • Acceptance of application package – Upon receipt of an application Invest Maldives will accept the application and provide a ‘case reference number’.
  • Formal review – On acceptance of the application package, Invest Maldives will review the submitted documents and notify the applicant of anything that is missing or needs to be rectified.
  • Review by the Foreign Investment Committee – Upon receipt of the complete application materials and completion of preliminary review, the application will proceed to the review of the Foreign Investment Committee who will decide whether to approve the application.
  • Approval of application – If the application is approved, MED will issue a ‘Foreign Investment Approval Letter’ as evidence that it has approved the investment with a 30 day validity to complete the business registration process.
  • Rejection of application – If MED decides that the inbound investment/project fails to satisfy the criteria for approval, the MED will issue a written decision that states the reason for the rejection.

MED Filing applicable for Automatic Approval Route

Where the investment falls into a sector that affords automatic approval route, the investor will still need to file the application and follow the above process. However, the level of scrutiny is far less extensive than for cases that fall into the Government Approval route, and the timelines are correspondingly shorter.

An application for MED filing can be made online via email and hard copies of the application package should be submitted to the administration desk of MED, on a case by case basis.

5. Process and Timeline for Business Registration

Upon receiving the foreign investment approval, the business registration application (based on the choice of business form) has to be filed with the MED. 

The main considerations when choosing the business form and registering the business is as follows:

  • Foreign investors 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 FDI Policy;
    • 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.

Provided the registration documentation filed is in order, the business registration process will be completed within 1 to 3 working days by the MED and the registration confirmation documents will be issued. Subsequently, the Foreign Investment Agreement will have to be signed between the newly registered SPV and the Government to complete the foreign investment application process.

6. Government Fees Payable to Set Up an FDI

The following Government fees will have to be settled by the investor to complete the Foreign Investment Registration Process.

# Payment  Amount  Details
1. Administrative Fee USD 5,000 Upon the MED granting the foreign investment approval, the Investor will be required to settle a foreign investment administrative fee before the business registration can proceed. The payment will have to be settled to the Maldives Inland Revenue Authority (MIRA) by cash, MRTGS or via foreign remittance.
2. Business Registration Fee (for a LLC) Circa MVR 2,000 (i.e. USD 130) –  The business registration fee will slightly vary depending on payment to be settled for company name reservation and extension and whether a company seal for the company is to be registered.