On 19 March 2025, the Fifteenth Amendment to the Tourism Act (Law No. 2/2025) (“Fifteenth Amendment”) came into effect, bringing with it several important changes aimed at shaping the future of tourism development in the Maldives. This amendment introduces key revisions to how islands, land, and lagoons are allocated for resort development under cross-subsidy arrangements. It also updates the rules around extending lease periods for tourist properties and introduces new policies related to the closure and redevelopment of existing resorts, advertising and promotion, and the creation of a Tourism Fund. Below is a summary of the revisions to the Tourism Act under the Fifteenth Amendment.
Tourism Zone Designation and Restrictions
The Fifteenth Amendment clarifies and formalizes the process of designating land and areas for tourism development, particularly in inhabited islands and their surrounding jurisdictions. Under the updated sections, Island and City Councils continue to have the authority to designate land within inhabited islands or cities for tourism purposes, provided it aligns with the respective urban development plans. The amendment explicitly states that the authority to designate uninhabited islands and lagoons, even if located within a council’s jurisdiction, remains with the President, a role that was previously implied but is now clearly stated in the law. Furthermore, the amendment reaffirms that only tourist guesthouses and hotels may be developed in areas designated by councils, maintaining the specific development limitations that were already in place.
lease extensions
The Fifteenth Amendment introduces significant changes to the lease extension framework for islands, land, and lagoons leased for the development of tourist resorts or integrated tourist resorts. Lease extensions can now be obtained for up to 70 years and 75 years, if applied within six months from the Fifteenth Amendment. Additionally, outright lease extensions for 99 years period can be paid in instalment basis provided an application for extension is submitted within the same duration.
Below is a table outlining the current lease extension pathways introduced by the Fifteenth Amendment:
| Lease Type | Extension Period | Extension Fee | Conditions |
| Leases with a term of less than 50 years | Up to 50 years | USD 100,000.00 per year (lump sum) | Applicable if agreeable to pay full extension fee as within 6 months (by 18 Sept 2025) |
| Leases with a term of less than 50 years | Up to 50 years | USD 200,000.00 per year (lump sum) | Applicable if agreeable to pay the extension fee after 6 months (post 18 Sept 2025) |
| Leases already extended to 50 years – Option 1 | Additional 20 years (up to 70 years) | USD 2,500,000.00 (lump sum) | Application and payment must be made within 6 months (by 18 Sept 2025) |
| Leases already extended to 50 years – Option 2 | Additional 25 years (up to 75 years) | USD 3,000,000.00 (lump sum) | Application and payment must be made within 6 months (by 18 Sept 2025) |
| Leases already extended to 50 years – Option 3 (a) | Additional 49 years (up to 99 years) | USD 5,000,000.00 (lump sum) | Application and payment must be made within 6 months (by 18 Sept 2025) |
| Leases already extended to 50 years – Option 3 (b) | Additional 49 years (up to 99 years) | USD 1,500,00.00 (lump sum) USD 4,000,000.00 in instalments | Application and lump sum payment of USD 1.5 Million must be within 6 months (by 18 Sept 2025) USD 4 Million must be paid in instalments within 1 year from application |
| Leases already extended to 50 years – Option 3 (c) | Additional 49 years (up to 99 years) | USD 1,500,00.00 (lump sum) USD 4,500,000.00 in instalments | Application and lump sum payment of USD 1.5 Million must be within 6 months (by 18 Sept 2025) USD 4.5 Million must be paid in instalments within 2 years from application |
| Leases already extended to 50 years – Option 3 (d) | Additional 49 years (up to 99 years) | USD 10,000,000.00 (lump sum) | For applications submitted after 18 Sept 2025 |
If the payments under the instalment plans are not completed within the stipulated timeframe, the lease extension becomes invalid, and any fees paid up to the point will not be refunded. However, any amount already paid can be offset against future lease rent. The detailed procedures and requirements for the instalment plans will be outlined in the regulations formulated by the Ministry of Tourism.
Temporary closure for redevelopment
The Fifteenth Amendment authorizes the temporary closure of islands or land developed for tourism for the purpose of redevelopment or other related activities. Such closure must be approved by the Ministry of Tourism and carried out for a period specified by the Ministry. This period must be formalized through an amendment to the head lease agreement, in accordance with regulations issued by the Ministry under the Tourism Act.
If the redevelopment is not completed, the property is not reopened, and tourism services are not resumed within the approved timeframe, the Ministry is empowered to take enforcement action. This includes the right to cancel the head lease agreement without any obligation to compensate the lessee. Furthermore, any unapproved cessation of operations outside the framework of an amended head lease also gives the Ministry the authority to terminate the head lease.
MANDATORY COMPLIANCE CODE
All tourism establishments are required to develop a Compliance Code within 1 (one) year from the amendment’s effective date (by 19 March 2026). This code must outline safety and operational standards across key areas of operation and must comply with criteria established by the Ministry of Tourism.
TOURISM ADVERTISING
The new rules introduced under the Fifteenth Amendment outlines how tourist establishments may promote themselves and their services. Only establishments that are registered and licensed under the Tourism Act may advertise their services. However, the Ministry of Tourism may permit the advertising of properties under development, provided they meet regulatory standards.
All advertising must adhere to strict standards, including:
- representing the establishment only as per its registered or licensed type.
- using only the officially designated grade or category assigned by the Ministry.
- providing complete and truthful information about services, natural surroundings, and nearby amenities.
Additional advertising guidelines and enforcement mechanisms will be prescribed through forthcoming regulations issued by the Ministry.
tourism trust fund
The Fifteenth Amendment establishes the Tourism Trust Fund, a dedicated financial mechanism to support the development, sustainability, and strategic goals of the Maldives tourism sector. The creation of this fund dissolves the Tourism Industry Trust Fund, which was previously established under the Public Finance Act (Law No. 3/2006). All assets from the former fund are to be transferred to the new Tourism Trust Fund.
The newly established Tourism Trust Fund is designed to:
- provide financial assistance to tourism-related initiatives based on transparent, accountable criteria.
- promote tourism resources and invest in their development.
- support education and training programs aimed at building industry capacity.
- fund social impact initiatives that align with tourism development.
- invest Fund resources to ensure sustainable financial support for future projects.
The Tourism Trust Fund will be capitalized through:
- sponsorships and contributions from domestic and international partners.
- CSR payments made by tourism sector in accordance with the regulation formulated under the Tourism Act.
- returns generated from fund investments.
- other sources as specified by regulation formulated under the Tourism Act.
The Tourism Trust Fund will be managed by the Ministry of Tourism, under the guidance of a Tourism Trust Fund Management Committee, which will be established under the regulations made under the Tourism Act. This Committee is responsible for setting operational policies, investment strategies, and overseeing compliance with the Fund’s Trust Statement and applicable laws.
The Tourism Trust Fund is to be managed independently from other state finances. Annual reports and audited financial statements must be submitted by the Ministry to the President, the Parliament, and the Auditor General. The Auditor General is then required to audit and submit the audit report to the Parliament within two months of receiving the financials.
expansion of policy basis for cross-subsidy
Prior to the Fifteenth Amendment, islands, land, and lagoons could be granted as cross-subsidies only to parties entrusted with, or funding, important projects designated by the Government pursuant to its economic or social policies aimed at achieving a public benefit of the state. The Fifteenth Amendment expands this scope, permitting such grants to be made under any other important policy determined by the Government to serve the public interest.
