Successfully incorporating your business in the Maldives is just the first step. Navigating the post-incorporation phase involves several crucial activities to ensure your business is ready to commence operations. Here are some key considerations to help you streamline your operations and maintain compliance with Maldivian laws.
Setting Up a Service Address
A service address serves as the primary location for receiving all correspondence from the Registrar of Companies and third parties. Companies, except for those re-registered, have the option to register a service address with the Registrar. For re-registered companies, maintaining a service address is mandatory under the Companies Act. You can designate the service address to be the address of a firm (law firm, audit or accountancy firm) appointed by you. If no service address is provided, the company’s registered address will be used as the service address for sending correspondence.
Opening a Bank Account
Setting up a bank account is a crucial step for managing your company’s financial transactions and operations in Maldives. There are 8 banks operating in the Maldives, including 3 local banks, 1 subsidiary of a foreign bank, and branches of foreign banks.
The minimum requirements to open a bank account and the extent of corporate finance services offered vary across the banks. As the Maldives financial sector is regulated by anti-money laundering and terrorism financing laws, banks typically conduct Know-Your-Customer (KYC) reviews prior to onboarding customers and throughout the term. Additionally, transactions are subject to monitoring, and you may need to provide the bank with supporting documentation for transactions. Therefore, it is advisable to keep records of sales of goods or services rendered.
For information on corporate banking services, refer to our business operation guide #2.
Obtaining Permits and Licenses
In key economic sectors such as agriculture, construction, education, fishery, health and tourism, certain business activities require permits or licenses before you can commence operations. These permits or licenses should be obtained from the government authority responsible for overseeing the specific sector.
For business activities that do not require a sector specific permit or license, prior registration of the activity with the Ministry of Economic Development and Trade is mandatory. Additionally, if a business name is used, it must also be registered with the Ministry before commencing operations.
Employment Requirements
In Maldives, foreign investments are encouraged to employ Maldivian nationals, except where employment of foreigners becomes necessary. For information on employment requirements in the Maldives under Employment Act, refer to our business operation guide #3.
Maldivian employees are entitled to minimum wage under the Employment Act, while foreign employees are exempt from minimum wage. For information on minimum wage, refer to our article on this topic.
In Maldives, employees are entitled to the service charge collected by their employers. Where an employer collects service charge, they must distribute 99% of the service charge collected in any given month equally among all of its employees. For information on service charge, refer to our article on this topic.
Maldivian employees are also entitled to receive pension benefits. Employers are required to register Maldivian employees between the ages of 16 to 65 years with the Maldives Retirement Pension Scheme (MRPS), whereby both the employer and employee, each must contribute 7% of the pensionable wage to the MRPS.
Work Visas
Maldives implements a foreign workers quota policy, allowing business entities to apply for a quota to employ foreigners. It is the responsibility of the employer to obtain the necessary work permit entry passes for foreign employees before they enter the country and to ensure they maintain a valid work permit and work visa throughout their employment duration. You can apply for a quota using the Government’s Xpat Online System. After obtaining a quota, a work permit for the foreign employee must be obtained, along with the payment of a deposit. Once the employee enters the Maldives, within 15 days, the employer must apply for a work visa. Typically, work visas are issued for the duration of the employment agreement and are subject to renewal.
Below are the applicable fees relating to work permits and work visas.
- Deposit: this is a one-time refundable fee based on the foreign employee’s country of nationality
- Medical check-up: annual fee of MVR 430 (approx. US$ 28)
- Expatriate insurance: annual fee of MVR 800 (approx. US$ 52)
- Quota fee: annual fee of MVR 2,000 (approx. US$ 130)
- Work permit fee: monthly fee of MVR 350 (approx. US$ 23)
- Work visa fee: no fees are charged for work visas
RCo Lawyers specializes in providing expert legal guidance to businesses like yours, ensuring smooth operations and compliance with Maldivian laws every step of the way. Contact us to get the expert assistance you need to navigate post-incorporation processes successfully.