In Maldives, import duty is governed by the Export Import Act and implemented by the Maldives Customs Service. The President has the authority to waive import duties, royalties, and revenue fees, either fully or partially, upon the advice of the Cabinet.
Under the earlier framework, exemptions were primarily limited to government-approved economically beneficial activities and special circumstances involving public benefit. The new framework, under the Regulation on the Discretionary Power of the President to Grant Exemptions on Import Duties, Royalties, and Revenue Fees, expands this scope to include goods imported in connection with strategic economic projects or businesses that are economically beneficial.
Here is an overview of import duty, royalty, and revenue fee exemptions applicable to businesses.
Exemptions for Economically Beneficial Activities
Exemptions for economically beneficial activities are available for new economically beneficial activities or for the expansion of existing ones. Previously, exemptions required a minimum investment threshold of US$ 2,000,000. Currently, there is no fixed minimum value, and the extent of exemption is determined by the President.
Activities eligible for exemption
The following activities are eligible for exemption under the category of economically beneficial activities:
- businesses and economic activities that promote the increase of exports and decrease of imports
- business and economic activities that promote the growth of key economic activities and increase business and employment opportunities
- businesses and economic activities that increase inward foreign currency
- economic activities that introduce new activities and diversify Maldives economy
- economic activities that promote the growth of Small and Medium Enterprises (SMEs)
- new development, redevelopment or upgrading, and extension projects in the tourism sector
- SME activities initiated by the government or conducted through government projects, loans, or grant schemes
- materials and equipment imported for the construction and maintenance of marine vessels, including the repair and refurbishment of boats and ships
- equipment and supplies imported by SMEs specifically for the advancement of agricultural activities
- materials and resources imported by stakeholders in the fisheries sector to modernize, develop, and increase the productivity of the fishing industry
- marine fuel bunkering services and the re-export of fuel by Maldivian businesses licensed to operate within the Maldives, providing bunkering fuel to foreign to vessels
- resort development projects in atolls where tourism is currently less developed, specifically in Thiladhunmathi, North Miladhunmadulu, Kolhumadulu, Haddhunmathi, and Addu Atolls
- development projects initiated by parties investing in the halal tourism sector
Materials eligible for exemption
- capital equipment
- spare parts
- materials and other supplies
Duration of Exemptions
For new economic activities, import duty, royalty, and revenue fee exemptions are granted until the investment is established. For economic activities already in operation or under expansion depending on the total value of investment, the maximum duration of import duty, royalty and revenue fee exemption is as follows:
- 3 years for investments between US$ 2,000,000 – US$ 25,000,000
- 5 years for investments between US$ 25,000,000 – US$ 50,000,000
- 7 years for investments between US$ 50,000,000 – US$ 75,000,000
- 10 years for investments between US$ 75,000,000 – US$ 100,000,000
- 15 years for investments above US$ 100,000,000
Exemptions under Special Circumstances involving Public Benefit
Import duties, royalties, and revenue fees may be exempted where goods are imported for the general benefit of all citizens of the Maldives, or for the residents of a specific island or region. The extent to which import duties, royalties, and revenue fees are exempted are determined by the President.
GOODS ELIGIBLE FOR EXEMPTION
- goods imported to provide medical treatment or emergency relief during epidemics or widespread disease outbreaks
- goods imported to address crises affecting the livelihood or basic living standards of the public, including disruptions to essential services such as education, healthcare, electricity, water, or sewerage
- goods imported to alleviate hardships caused by interruptions or deterioration in essential public services
- goods imported to mitigate the effects of natural disasters or catastrophes impacting citizens or specific islands
- goods imported under foreign grant aid projects for public facilities, essential services, or social, infrastructure, or environmental development
- goods imported under specific agreements that provide for duty exemption, for projects supporting public services, infrastructure, or environmental protection
- goods received as donations or gifts for the benefit of the public or residents of a specific island
- legal tender (currency notes and coins) printed or minted abroad and imported into the Maldives
- goods imported for use by national defense services
- goods imported for projects deemed economically beneficial to the Maldives or for promoting the Maldives at international platforms and exhibitions
Exemptions for Strategic Economic Projects
Goods imported in connection with strategic economic projects or businesses that are considered economically vital to the country are eligible for exemption from import duties, royalties, and revenue fees. Such exemptions are subject to the applicable approval procedures and conditions imposed by the relevant authorities and may only be granted after obtaining approval from the President’s Office.
goods eligible for exemption
- goods imported for specific projects designated or approved by the Government as strategically important, as well as goods exported or re-exported in connection with such projects
- goods imported under an agreement that expressly includes provisions for the exemption of import duties, royalties, and revenue fees for the duration of the project or agreement
Applying for Exemptions and Compliance Obligations
The Regulation Governing the Grant of Import Duty, Royalty, and Revenue Fee Exemptions sets out the criteria and procedures for requesting exemptions, including documentation requirements, approval timelines, and ongoing compliance obligations.
Persons eligible to apply for exemption
Registered business entities in the Maldives that maintain compliance with fees and taxes payable to the government and have registered in ‘Importer/Exporter Registry’ with the Maldives Customs Service are eligible to apply for import duty exemptions.
In addition, Local Councils and Government institutions are eligible for import duty exemptions.
Applying for Exemptions
Applications for import duty, royalty or revenue fee exemption, except in agriculture, fishery and tourism sectors, must be submitted to the Ministry of Economic Development and Trade. For duty exemptions in agriculture, fishery and tourism sectors, applications must be submitted to the relevant ministry overseeing the sector.
Applications must be submitted at least 14 days prior to the expected import or export date. In emergency or urgent circumstances, applications may be submitted within a shorter period.
Applications requesting for exemptions must be submitted through the designated form and must include:
- name and address of the applicant
- nature and description of the goods
- purpose and detailed explanation of the project or activity
- legal basis for the exemption request
- justification for the exemption
- specific items and quantities requested
- declaration of accuracy and intended use
- list of goods and invoices
- business registration certificate
- copy of agreement (where applicable)
- any other information as required by the relevant authority
The relevant authority shall decide on the application within 7 days of receipt, taking into account the impact on state revenue, the social and economic benefits or losses, and whether the exemption achieves its intended purpose. Approved exemptions are communicated in writing to the Maldives Customs Service for implementation. Upon the expiry of the exemption period the applicant may apply for an extension in same manner as the initial application.
Monitoring and Compliance
Relevant authorities that approve the exemption are responsible for monitoring projects and activities granted exemptions. If exempted goods are used for purposes other than those approved, the exemption may be revoked following an administrative investigation and notification to the Maldives Customs Service.
Upon revocation, Customs has the power to demand payment of the applicable duties or fees and may initiate legal action where necessary. Failure to receive a payment notice does not relieve the liable party from payment obligations. Exempted goods, projects, or businesses may not be transferred or used for other purposes without prior written approval from the relevant authority, and the Maldives Customs Service must be notified of any such approved changes.
Validity of Exemptions
An exemption granted remains valid as long as the recipient complies with the domestic laws and fulfills all conditions attached to the exemption. Where exempted goods are exported, destroyed, or stolen, the matter will be handled in accordance with applicable Customs procedures. If an exemption granted is revoked or expires, the relevant authorities and the recipient must be promptly notified.
Exemptions on Goods Imported Through Regional Ports
Goods imported to regional ports other than Male’ port are eligible for import duty exemptions up to 50%. However, tobacco, liquor and pork, and their related products are not eligible for this exemption.
Exemption on goods imported through regional ports are regulated by the Maldives Customs Service. Regional ports to which the above exemptions apply are:
- Hdh. Kulhuduffushi regional port
- S. Hithadhoo regional port
- Hdh. Hanimaadhoo International Airport
- S. Gan International Airport
- N. Maafaru International Airport
Our experienced team can provide personalized guidance to ensure you make the most of available exemptions while staying compliant with regulations. Reach out to our team for advice and support to seek applicable exemptions to your business.