The Maldives Government has on 16th November 2023 introduced a new regulation governing the various aspects of the development and operation of yacht marinas throughout the country. The ‘Regulation on the Development and Operation of Yacht Marinas in the Maldives’ (Regulation No: R-178/2023) “(New Regulation”) is issued by the Ministry of Tourism (“MoT”) pursuant to Section 27 of the ‘Maldives Tourism Act’ (Law No: 2/99) and repeals the 2005 regulation governing yacht marinas. The New Regulation came into force on 16th November 2023 and prescribed the rules on the standards to be adhered to, facilities to be offered, and licensing rules in respect of yacht marinas developed and operated throughout the Maldives.
Existing Licenses
The New Regulation addresses what will happen to existing marina operating licenses issued prior to the New Regulations coming into force. In this regard, existing marina licenses will continue for the duration prescribed under such operating license. Existing licenses are required to be renewed 30 days prior to the expiry of the license and in accordance with the application procedure prescribed under the New Regulation.
In addition, existing marinas which provide accommodation facilities to the standards of tourist resorts are required to register such facilities as tourist resorts within a period of 6 months from the date the New Regulations come into force.
Regulatory Processes
MoT’s approval is required at the concept stage of a marina’s development with the concept drawings requiring the regulators approval. Following this, MoT’s approval is required for the operation of the marina including processes involved with the licensing and registration of such marinas. Marina operating licenses will only be issued to businesses registered under the ‘Business Registration Act’ (Law No: 18/2014). Such businesses must either possess the lease hold, free hold or management rights over the area allocated for the development of a marina. Additionally, approval from the relevant government agency will be required for the operation of various types of facilities and services within the marina as well.
The application process requires parties to file the prescribed application form to MoT along with supporting documents including the agreement which evidences the lease hold, free hold or management rights granted to the applicant over the area allocated for the marina and documents which evidence the corporate registrations issued to the applicant by the government. The marina operating license is issued for a maximum period of 5 years and can be renewed on submission of an application to MoT 30 days prior to the expiry of such license. Where an existing licensee wishes to transfer or assign its marina operations license to a third party, they can do so provided MoT’s approval is obtained and the requirements as prescribed under the New Regulation have been satisfied.
General Requirements
The New Regulation prescribes rules governing the following matters:
- The location of areas which may be developed as marinas;
- Issuances and cancellation of marina operating licenses;
- The public display of services to be provided at marinas and facilities to cater to persons with disabilities;
- Vessel repair, maintenance and washing services and ensuring that such services do not adversely impact or cause damage to the natural environment and other parties seeking services at the marina;
- The various types of insurances to be taken in respect of the marina from an insurance company approved by the government;
- The maintenance of a vessel registry to be kept by the marina operator; and
- Goods and Services Taxes (“GST”) to be levied on all services to be provided at the marina and prescribes that it is the responsibility of the marina operator to ensure that GST is filed with the Maldives Inland Revenue Authority.
In addition, the New Regulation prescribes the facilities which are to be made available at the marina including:
- The operation of entry ways and jetties;
- Telecommunication and internet services;
- Water and electricity services;
- Health services;
- Waste disposal services;
- Sewerage services; and
- Facilities to safeguard the marina from fire hazard.
Penalties for Non-Compliance
MoT has the discretion to impose a fine not exceeding MVR 1,000,000.00 (equivalent to US$ 64,850.84) where the services provided at the marina fall short of the prescribed standards in the Regulation. Additionally, based on the severity in non-compliance, MoT has the discretion to suspend the marina’s operating license.
Lastly, the New Regulation grants MoT the authority to impose financial penalties for non-compliance on the prescribed rules as below:
- In the first instance, a fine between MVR 10,000.00 – MVR 30,000.00 (equiv. to US$ 649 – US$ 1946).
- In the second instance, a fine between MVR 30,000.00 to MVR 60,000 (equiv. to US$ 1946 – US$ 3891).
- In the third instance, a fine between MVR 60,000 to MVR 100,000.00 (equiv. to US$ 3891 – US$ 6485).
- In excess of the third instance, a fine of MVR 100,000.00 (equiv. to US$ 6485) for every instance of non-compliance.
