Legal
A “foreign person” means every person who is not a Maldivian citizen as explained in Article 9 of the Maldives constitution, and includes companies, partnerships, clubs, societies, and business entities registered overseas.
Article 9 of the Maldivian Constitution
- i) The following persons are citizens of the Maldives:
(a) Citizens of the Maldives at the commencement of this Constitution.
(b) Children born to a citizen of the Maldives; and
(Foreigners who, in accordance with the law, become citizens of the Maldives.
- ii) No citizen of the Maldives may be deprived of citizenship.
iii) Any person who wishes to relinquish his citizenship may do so in accordance with law.
- iv) Despite the provisions of article (i) a non-Muslim may not become a citizen of the Maldives.
In accordance with the applicable laws and regulations, a foreign person may choose, either to set up a company, partnership, reregister a company incorporated in a foreign jurisdiction or establish a branch of a foreign legal entity by incorporating or re-registering a business in the Maldives.
Currently, there are 2 regimes available for foreign investors to establish their business in the Maldives.
normal regime governed under the
- Foreign Investment Law
- ii) Special Economic Zone (SEZ) regime
governed under the Special Economic
Zones Law
The Business Registration Act (Law No.: 18/2014) lists out the following criteria under which foreign persons are allowed to carry out business in the Maldives under this regime.
- i) It is a professional service either in
the field of law, healthcare, accounting, taxation, financial services; or
- ii) If the business activity is not a professional service stated in sub-paragraph (i), the share capital of the business exceeds one million United States Dollars and makes a security deposit of One Hundred Thousand United State Dollars to an agency determined by the Maldives Government; or iii) It is a wholesaler; or
- iv) It shall have a certificate of
creditworthiness issued from a bank approved by the Maldives Government; and
- v) It is not a retailer, engaged in small business or any kind of retail trade.
Subject to fulfilling the above criteria, a foreign
person will need to be registered as a Company under the Maldives Companies Act (Law No.: 10/96) or as a Partnership under Partnership Act (Law No.: 13/2011).Maldives Companies Act also allows re-registration of companies incorporated under foreign jurisdictions and establishment of branches of foreign companies.
FOREIGN INVESTMENT REGISTRATION PROCEDURE
Noted below is a step-by-step guide on obtaining approval for a foreign investment request, and the subsequent registration process that is required to establish a business entity under the normal regime governed under the Foreign Investment Law
STEP 1 Lodge Foreign Investment Application at the Ministry of Economic Development
- Application for a Foreign Investment is available from the Ministry’s website; www.trade.gov.mv.
- Walk-in meetings are available at Foreign Investment Registry Unit located at 4th floor, Velaanaage Building for all foreign investors, who may wish to discuss their proposal, prior to applying.
STEP 2 Getting the Foreign Investment approval
- An approval will be granted for the requested proposal in consultation with relevant government stakeholders and in accordance with the applicable laws and regulations.
- The standard processing time is 3 working days. However, in cases where relevant line Ministries need to review the applications further, it may take 10-14 days for a decision on the application.
STEP 3 Registration of a business entity
- At the stage of lodging the foreign investment application, a decision will need to be made on the type of business entity to register the business subject to getting approval for the proposed business. The options available include Company, Partnership, or re-registering a company, which has been duly incorporated in another jurisdiction.
- Application forms for registering as a legal entity are available from the Ministry’s website www.trade.gov.mv. and such applications can also be lodged online via business.egov.mv
STEP 4 Sign the Foreign Investment Agreement
- Upon registering as a business entity, a Foreign Investment Agreement (FIA) must be signed with the Ministry of Economic Development. This Agreement outlines the terms and conditions related to carrying out the specific business in the Maldives. For tourism sector investments, the said FIA need not be signed with the Ministry of Economic Development. In such instances, where, land is acquired through the government, a land lease agreement is signed with the Ministry of Tourism
STEP 5 Obtain licenses and permits
- Depending on the type of business activity undertaken, an operating license or permit may need to be obtained to commence operations.
- Please refer to the section on Business Licenses for more details.
