As we enter 2025, businesses in the Maldives must stay ahead of several significant regulatory changes that have emerged in 2024. These new frameworks across company law, occupational health and safety, taxation, and foreign currency obligations will impact how businesses operate and ensure compliance.
In this article, we provide an overview of the key compliance requirements that companies must meet as we transition into the new year.
cOMPANY LAW OBLIGATIONS
In 2024, a new regulatory framework for companies in the Maldives was introduced. The Companies Act (Law Number: 7/2023) took effect on 1 January 2024, followed by the Private Companies Regulation (Regulation Number: 2024/R-99), which became effective on 10 October 2024. For more information on the new companies framework, please refer to our Companies Act Guide and Update on Private Companies Regulation.
A one-year transitional period was granted for existing companies to comply with the new obligations under the Act. As the transitional period approaches its conclusion on 31 December 2024, companies must ensure the following compliances:
- Update Constitutions: Align their constitutions with the Act by either adopting the Model Articles of Association or drafting customized articles, along with a Compliance Statement as outlined in Schedule 5 of the Private Companies Regulation.
- Board Director Requirements: Starting 1 January 1 2025, boards of directors must meet the requirements specified in Section 115 of the Act. A key requirement is that all private companies must appoint Maldivians as directors, with an exception granted only to foreign investment companies. Private companies with 100% local shareholding but foreign directors on their boards must ensure compliance. Such companies should explore alternative arrangements to maintain strategic alignment while adhering to the Act’s requirements.
- Re-Registered Companies: Re-registered companies must ensure compliance with all new obligations imposed under the Companies Act. This includes the appointment of a local agent as required by the Act and the Foreign Companies Registration Regulation. All such obligations must be fulfilled by the end of the transitional period.
occupational health and safety obligations
In 2024, a comprehensive occupational health and safety framework was established within the employment landscape. The Occupational Health and Safety Act (Law Number: 2/2024) came into effect on 2 April 2024, and was later supplemented by the Occupational Health and Safety Regulation (Regulation Number: 2024/R-103), which became effective on 14 October 2024.
The new occupational health and safety framework requires employers to adopt and implement the following key standards amongst others:
- Health and Safety Policy: Employers must establish an occupational health and safety policy that complies with the minimum standards to be published by the Labour Relations Authority.
- Health and Safety Officers: Employers with 75 or more employees are required to appoint Health and Safety Officers. Employers with more than 151 employees must appoint the prescribed number of Health and Safety Officers by 14 October 2025. Employers with 75 to 150 employees must appoint the required number of Health and Safety Officers by 14 October 2026. Appointed Health and Safety Officers must meet the qualifications and criteria outlined in the Regulation.
- Health and Safety Management System: Employers are required to implement a health and safety management system as prescribed in the Regulation.
- Compensation for Health and Safety Hazards: Employers must ensure the implementation of rights to compensation for physical injuries sustained or deaths caused during or in connection with work.
taxation amendments
- Goods and Services Tax (GST): The tourism sector GST (TGST) will increase from 16% to 17%, effective from 1 July 2025. Moreover, as of 5 November 2024, goods and services sold in cafes and shops within tourist establishments operating exclusively for employees are subject to the General Goods and Services Tax rate at 8%.
- Green Tax: Starting from 1 January 2025, the green tax payable per night will double for tourism establishments. For tourist resorts, integrated resorts, resort hotels, tourist vessels, and hotels and guesthouses on uninhabited islands, the green tax rate will change from USD 6 to USD 12. For hotels and guesthouses with 50 rooms or fewer on inhabited islands, the green tax rate will increase from USD 3 to USD 6. Notably, infants under two years old are exempt from the green tax starting from 1 January 2025.
- Departure Tax and Airport Development Fees: Effective from 1 December 2024, departure tax and airport development fees have increased based on travel class, except in the case of Maldivians travelling economy class. For Maldivians travelling economy class, both departure tax and airport development fees remain at USD 12 per person. For foreigners travelling in the same class, both the tax and fee have increased from USD 30 to USD 50. For Maldivians and foreigners travelling business class, both departure tax and airport development fees have increased from USD 60 to USD 120. For first class Maldivian and foreign travelers, both the tax and fees have increased from USD 90 to USD 240. For Maldivians and foreigners travelling in private jets, the tax and fees have increased from USD 120 to USD 480.
foreign currency obligations
Effective from 1 January 2025, the Foreign Currency Act will replace the previous Foreign Currency Regulation introduced on 1 October 2024. While the Act maintains the foreign currency deposit and conversion requirements outlined in the earlier regulation, it introduces certain modifications.
One significant change is the reclassification of tourism establishments under the Act. The new categorization is as follows:
- Category A establishments: tourist resorts, integrated tourist resorts, private islands, resort hotels; and
- Category B establishments: tourist vessels, tourist hotels and tourist guesthouses.
Below is a summary of the deposit and conversion compliances required under the Act and Regulation.
| Compliance | From 1 January 2025 onwards (Foreign Currency Act) | From 1 October to 31 December 2024 (Foreign Currency Regulation) |
| Deposit – Who Must Comply | Deposit requirement applies to both tourism goods and service providers and entities generating an annual revenue of at least USD 15,000,000. | Deposit requirement applies to tourism goods and service providers for foreign currency sales proceeds received from the sale of tourism goods and services. |
| Deposit – When to Comply | Aforesaid businesses are required to deposit realized foreign currency sales proceeds received in a month by the 28th day of the third subsequent month to a local bank account. For example, realized foreign currency sales proceeds received in January 2025 must be deposited by the 28th of April 2025. | Tourism goods and service providers are required to deposit sales proceeds received in a month by the 28th day of the third subsequent month. For example, realized foreign currency sales proceeds received in October 2024 must be deposited by the 28th of January 2025. |
| Conversion – Who Must Comply | Conversion obligation applies to tourism establishments and entities generating an annual revenue of at least USD 15,000,000. | Conversion obligation applies to tourism establishments only. |
| Conversion – Amount | Tourism establishments have the option to convert either based on monthly arrivals or revenue. Category A establishments must convert either an amount at the rate of USD 500 per tourist arrived per month or 20% of the gross sales earned in foreign currency in a month. Category B establishments must convert an amount at the rate of USD 25 per tourist arrived per month or 20% of the gross sales earned in foreign currency in a month. Entities generating an annual revenue of at least USD 15,000,000 must convert 20% of the gross sales earned in foreign currency in a month. | Conversion amount based on the category of the tourism establishment monthly arrivals. Category A establishments are required to convert an amount equivalent to USD 500 per tourist arrival each month. This requirement applies to tourist vessels and tourist hotels with more than 50 rooms and/or those located on uninhabited islands for the period of October – December 2024. While these establishments are not classified as Category A under the Act, they have been designated as Category A establishments under the Regulation. Category B establishments are required to convert an amount equivalent to USD 25 per tourist arrival each month. |
| Conversion – When to Comply | Businesses under conversion obligation must convert the amount in respect of each month by the 28th day of the third subsequent month. For example, the amount applicable to January 2025 must be converted to Maldivian Rufiyaa at a local bank by the 28th of April 2025. | Tourism establishments must convert the amount in respect of each month by the 28th day of the third subsequent month. For example, the amount applicable to October 2024 must be converted to Maldivian Rufiyaa at a local bank by the 28th of January 2025. |
REGISTRATION OBLIGATIONS
Under the Foreign Currency Act, all individuals and entities within its scope must register with the Maldives Monetary Authority (MMA), unless already registered under the Foreign Currency Regulation.
- Those falling within the Act’s scope must complete their registration with MMA by 10 January 2025.
- Entities with an annual revenue of at least USD 15,000,000 must register by 30 January 2025.
- Tourism establishments beginning operations after 1 January 2025, are required to register with MMA within 30 days of commencing operations.
REPORTING OBLIGATIONS
- From 1 January 2025 onwards: Reporting requirements under the Foreign Currency Act are yet to be announced by the MMA.
- From 1 October to 31 December 2024: Under the Foreign Currency Regulation, tourism establishments must report sales details of tourism goods and services of a calendar month by the 28th day of the following month. For sales in December 2024, this information must be reported to the MMA by 28th January 2025.
