Foreign Investment in Tourist Guest Houses in the Maldives – A Practical Overview

5 January 2026

The Maldivian tourism sector continues to generate strong returns, with guest houses playing an increasingly vital role in accommodating global travellers. For foreign investors looking to enter this space, understanding the evolving legal and regulatory framework is essential. This guide outlines the key considerations for structuring, licensing, and operating a guest house investment in the Maldives.

1. Introduction

A Guest House is defined as an accommodation facility developed in accordance with the standards prescribed by the Ministry of Tourism and Environment (“MOT”) for the purpose of accommodating tourists.

Under the New Investment List published by the Ministry of Economic Development and Trade (“MED”) on 8 October 2025, foreign investors may invest in, and hold up to 49% equity ownership in, a company or partnership engaged in the development and/or operation of tourist guest houses in the Maldives, subject to a minimum investment of USD 250,000.

2. Foreign Investments in the Guest House Sector

Foreign direct investments (“FDI”) in the guest house sector are primarily regulated by the following:

  • Foreign Investment Act (Law Number: 11/2024);
  • New Investment List, which came into effect on 8 October 2025;
  • Maldives Tourism Act (Law No. 2/99) and all amendments thereto; and
  • Regulation on the Operation of Guest Houses in the Republic of Maldives and all amendments thereto (the “Guest House Regulation” or “Regulation”).

Read more on the New Investment List here: https://bnilaw.co/maldives-new-foreign-investment-list-2025/

FDI Approval Eligibility Requirements

Under the New Investment List, foreign investment in the guest house sector has been liberalised and is no longer subject to a formal “approved location” designation under the positive or negative list framework. However, local island council consultation and approvals remain relevant in practice, particularly in relation to land use, bed capacity considerations, and local development policies, in coordination with the MOT.

Below are the main points for consideration by a foreign investor:

Maximum Shareholding Allowed to Foreign Investors Minimum Investment Amount

Initial Investment Period
49% USD 250,000 (over the Initial Investment Period)

5 Years

Initial Step to take before FDI Commitments in the Guest House Sector

As a practical first step, investors should formally confirm with the relevant island council whether the proposed investment location is suitable for guest house development and operation, and obtain written confirmation before making binding investment commitments.

3. Obtaining Guest House Operating License

A Guest House Operating Licence (also referred to as an Operating Licence for Tourist Guest Houses) is issued by the MOT.

Documents required to register a Guest house and obtain Guest House Operating License

The following documents must be filed at the MOT to obtain the Guest House Operating License:

  1. Completed Application Form to Operate Guest Houses in the Maldives.
  2. Title Deed/Land Registry of the Land on which the Guest House will be operated.
  3. Approval from the Relevant Government Authority authorising the use of the land for Guest House operation.
  4. Lease Agreement between the land owner and the applicant – if the applicant is not the owner of the land on which the Guest House will be operated. The Lease Agreement must have a clause allowing the lessee (i.e. the applicant) to use the land/building for Guest House operation.
  5. If the applicant is a company:
    1. Certificate of Registration;
    2. Memorandum of Association – including operating Guest Houses as an objective of the company;
    3. Articles of Association;
    4. Up-to-date Profile Sheet of the company issued by the MED; and
    5. Copies of valid identification documents of all the shareholders of the company.
  6. Business Name Registration Certificate, issued under the name of the applicant, for the proposed name for the Guest House.
  7. Disaster Management Plan.
  8. Copy of a valid Guest House Insurance Policy, in accordance with MOT requirements.

MOT will accept electronic documents (which may be in PDF format) with originals to follow. Although not obligatory, it is best practice to pre-clear with the MOT all documents that need to be accepted by it to ensure that they are in agreed form. This will also enable the MOT to prepare the necessary registration documents in a timely manner.

Inspection before Granting Licence

If the MOT is satisfied with the application documents filed, then the MOT will require the proposed Guest House premises to be inspected, for the purpose of verifying that:

  • The building and facilities are as per the standards set by the MOT for a Guest House;
  • Services that the MOT has determined that must be available from such an establishment being made available at the premises.

If the MOT is satisfied with the compliance of the Guest House of the above requirements during the inspection, then the MOT will proceed to issue the Guest House Operating License including the particulars of the specific Guest House.

Duration & Renewal of License

A Guest House Operating Licence is issued for an initial period of 5 (five) years and may be renewed for successive five-year periods, subject to compliance with applicable laws and regulations.

4. Other Key Considerations for the Development and Operation of a Guest House

Land Lease Agreement

Where a foreign investor proposes to invest in a guest house project, the investor will be required to secure a legally valid lease agreement over the land on which the guest house will be developed and operated.

Such lease agreements are commercial in nature and are negotiated between the parties on mutually agreed terms. From a foreign investor’s perspective, it is critical that the lease term and contractual protections are sufficient to safeguard the investor’s capital expenditure and operational rights for the duration of the lease.

Development Standards and Requirements

Guest house development and operations are subject to detailed technical and operational standards prescribed under the Guest House Regulation, including the following key requirements:

  • Guest houses must be used exclusively for the accommodation of tourists and guests. Where a guest house building includes any residential unit or staff accommodation, such areas must have a separate and independent access from guest areas.
  • A minimum of 3 rooms and 6 beds is required for a premises to be classified as a guest house.
  • Each guest room must have a minimum floor area of 120 square feet, together with an attached bathroom.
  • A guest house must have a restaurant or dining area capable of accommodating at least 50% of the licensed bed capacity for dine-in purposes. Where a restaurant is operated, a separate permit must be obtained from the relevant authority.
  • A guest house must maintain a reception or lobby area capable of seating at least 20% of the licensed bed capacity at any given time.
  • The Regulation further prescribes standards and requirements in respect of the following facilities and operational matters:
    • Tourist rooms
    • Washrooms / bathrooms
    • Restaurant
    • Kitchen
    • Reception Area/Lobby
    • Employees of the Guest House
    • Disaster Management Plan
    • Guest House Insurance
    • Guest House Security
    • Rules relating to reservations made by the guest house

Record Keeping and Reporting Requirements

Guest house operators are required to maintain and submit the following records and reports in the form and manner prescribed under the Regulation:

  • Guest Registry – Must be maintained to record guest check-in and check-out details.
  • Guest Registration Card – Must be completed in respect of each tourist.
  • Monthly Occupancy Report – Must be completed and submitted to the MOT on or before the 7th day of the following month.

5. Taxes applicable to Guesthouses

The principal taxes applicable to guest house operations in the Maldives include the following:

# Tax Type Applicable Rate Notes
1. Tourism Goods and Services Tax (TGST) 17% Applicable to goods and services supplied under the Guest House Operating Licence.
2. Goods and Services Tax (GST) 8% Applicable to taxable supplies that fall outside the scope of the Guest House Operating Licence.
3. Green Tax USD 6 or USD 12 per tourist per night, depending on the number of registered rooms and the location of the guest house For Guest Houses operated in inhabited islands the following rates are charged:

Guest houses with 50 or fewer registered rooms Guest houses with more than 50 registered rooms
USD 6 USD 12
4. Corporate Income Tax 15% Calculated on taxable profits exceeding MVR 500,000 (approximately USD 32,425).
5. Non-Resident Withholding Tax (WHT) As per applicable WHT rate Certain categories of payments made to non-resident persons are subject to withholding tax at rates of 5% or 10%, depending on the nature of the payment.
6. Employee Withholding Tax (PAYE Tax) As per remuneration subject to tax brackets Calculated on employee remuneration exceeding MVR 60,000 (approximately USD 3,891), in accordance with applicable tax brackets.

Note: The tax implications applicable to a guest house operation may vary depending on the structure and activities of the business. Investors are advised to seek tailored advice from a qualified tax advisor.

6. Conclusion

While the Maldivian guest house sector presents attractive opportunities for foreign investors, successful entry and operation require careful structuring, regulatory compliance, and advance planning. Early legal and tax advice is strongly recommended to mitigate risk and ensure long-term viability of the investment.