MALDIVES Law and Practice Contributed by: Hassan Maaz Shareef, Aminath Amathulla, Aishath Shifala, Mohamed Azmee, Nazahath Ahmed, Maaisha Mohamed Musthafa, Aifa Shareef and Noorul Hudha Ahmed, Premier Chambers LLP
• the environmental impact of the proposed invest - ment; and • the potential to introduce and develop technology in the Maldives through the investment. Eligibility Under the FI Act, the foreign investment in the Mal - dives is open to: • citizens of foreign countries; • companies with 100% foreign shareholders; • companies with both Maldivian and foreign share - holders; • companies incorporated outside of the Maldives with 100% direct or indirect shareholding by Mal - divians; • partnerships and companies consisting of shares held by foreigners; and • companies to be re-registered in the Maldives under the Companies Act. Joint ventures between Maldivians and foreigners, for - eign NGOs and legal entities incorporated outside of the Maldives are also eligible to invest in the country. 2.2 Procedure to Obtain Approval and Sanctions for Non-Compliance Stages of Approval The FI Act has introduced the following stages for obtaining approval for a foreign investment in the Maldives. • Foreign investment application: A formal applica - tion must be submitted to the Ministry of Economic Development, Transport and Trade (the “Ministry”) along with the required documentation, investor profile and proposed activity. • No objection letter: Following a review of the appli - cation, the Ministry may issue a letter of no objec - tion to eligible applicants. This letter sets out the specific procedures that the applicant must com - plete before the investment can proceed. • Administrative fee: Upon receipt of the letter of no objection, the applicant is required to pay a non- refundable administrative fee for foreign investment to the Maldives Inland Revenue Authority (“MIRA”).
• Registration of business: Applicants must register the business with the Ministry after settling the foreign investment administrative fee. • Foreign investment licence: Upon complying with the procedures and submitting the required docu - ments, the Ministry issues a foreign investment licence to the investor, enabling them to legally engage in the approved business activity in the Maldives. • Foreign investment agreement: Following the grant of the licence and completion of the formalities, the Ministry enters into a foreign investment agreement with the foreign investor, which formally regulates the terms and conditions of the investment. Non-Compliance with the Approval Requirement While the FI Act does not prescribe specific penalties for investing without prior approval, non-compliance with the approval requirements will result in the for - eign investment not being recognised. If an inves - tor with an approved foreign investment engages in business activities outside the scope of the approved investment licence or in contravention of the FI Act or regulations, a penalty not exceeding 30% of the total value of the unapproved investment or business will be imposed on the investor. 2.3 Commitments Required From Foreign Investors Minimum Investment Requirements Investors must meet the minimum initial investment thresholds applicable to the specific business activity they intend to undertake. These thresholds vary by sec - tor and range from USD250,000 to USD100,000,000. For business activities that do not have a predefined investment amount, the terms can be negotiated with the authorities. Sectoral investment requirements are currently governed by the New Foreign Investment Entry Requirements (the “FI Entry Requirements”), which were published on 8 October 2025. Foreign Shareholding The maximum allowable percentage of foreign shareholding varies depending on the type of busi - ness activity. Under the FI Entry Requirements, for - eign shareholdings may range from 40% to 100%, depending on the proposed activity.
626 CHAMBERS.COM
Powered by FlippingBook