Are you looking to incorporate your business in the Maldives? This guide highlights the available entry options for foreigners (and foreign businesses) seeking to establish or expand their business in the Maldives.
With an open policy towards foreign investment, the Maldives offers a myriad of opportunities for foreigners across all major sectors of the economy. To determine the best entry option for your operations in the Maldives, it may be helpful to engage the services of a professional firm. In the meantime, here are the entry options available for foreigners.
Foreign Direct Investment
Foreign Direct Investment (FDI) is the standard entry option for foreigners looking to establish a long-term business in the Maldives. This is also the entry route for those seeking to expand their business to Maldives by re-registering a foreign enterprise or acquiring shares in an existing local company.
FDIs are governed by the Foreign Investment Act and Foreign Direct Investment Policy (FDI Policy) and are overseen by the Ministry of Economic Development and Trade. All major sectors of the economy are open to FDIs. Certain key sectors offer 100% equity ownership to foreigners, while others have caps on foreign equity ownership. In most key sectors, FDIs can continue with operations for up to 50 years. In the tourist resort sector, investments are bound by island lease periods, while in other sectors, the duration can be negotiated. Foreigners entering through this route are also required to commit to a minimum investment threshold based on the relevant sector and to be invested over a period of 5 years or within an agreed period.
To enter via the FDI route, you must first obtain foreign investment approval from the Ministry of Economic Development and Trade. Most key sectors are subject to automatic or guaranteed approval whereas others are subject to approval after wider government consultations. Once approval is granted, foreigners must incorporate a business entity (a company or partnership) in the Maldives before they can commence operations. A binding foreign investment agreement is also formalized between the Ministry and the business entity. For information on the procedure to enter via FDI route, refer to our incorporation guide #2.
Private Sector Initiated Proposal
Private Sector Initiated Proposals (PSIPs) to the government offer a structured framework for foreigners to propose innovative solutions and investments aligned with the government’s developmental agenda.
Governed by the Public Finance Regulation (2023 Amendment), investors entering through this route must submit a comprehensive proposal to the Ministry of Economic Development and Trade. These proposals must include an application form, project details, legal documentation, and financial statements. Proposals undergo thorough assessment at three stages: initial, strategic, and detailed assessment. They will be evaluated for compliance with governmental objectives before being presented to the Cabinet for approval. Once key terms are finalized and approved, a binding agreement is formalized between the government and the investor, facilitated by the relevant ministry or government agency.
PSIPs progressing to contractual stages are subject to disclosure, with relevant information published on the Ministry’s website. However, commercially sensitive details remain confidential, with consultation between the government and investor ensuring appropriate disclosure.
Government Tenders/ Public Private Partnerships
Foreign businesses can operate in Maldives by participating in Government Tenders and PPP Projects announced by the government.
Governed by the Public Finance Regulation (Chapter 18), this entry route allows foreigners to engage in PPP Projects aligned with the government’s economic and social policies for public benefit. Unlike PSIPs, PPPs focus on larger-scale foreign investments without direct state expenditure, emphasizing public transparency and accountability.
Foreigners interested in the PPPs option can participate in government-announced open tenders or calls for proposals by submitting a detailed proposal to the Ministry of Finance. The proposal must include an application form, project details, legal documentation, and financial statements. The proposals undergo a rigorous assessment process at initial, strategic, and detailed stages. Following direct negotiations with the investor and Cabinet approval, a binding agreement is signed with the investor, detailing project scope, terms, and monitoring plans.
Special Economic Zones
Special Economic Zones (SEZs) are aimed towards large-scale private investments in government-designated priority areas. These areas typically include export processing, transshipment, international logistics, education, healthcare, technology, finance, renewable energy, food security, and gas exploration. Each year, the priority areas are reviewed and determined by the President.
Governed by the Special Economic Zones Act, these zones offer special tax and regulatory incentives for both developers and businesses operating within them. These include exemptions on import duty of capital goods, business income tax, goods and services tax (for the first 10 years), withholding tax (for the first 10 years), and concessions in respect of tax relief and tax credit.
The minimum investment amount to qualify as a SEZ is annually reviewed and determined by the President. Foreign investors interested in entering through this route must submit a proposal to obtain a development permit from the Board of Investments established under the Ministry of Economic Development and Trade. Successful proposals are formalized by an investment agreement entered between the investor and the Board.
Ready to establish your business in the Maldives? Contact our team for expert guidance on the best entry route for your investment and navigate the process with ease.