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
6. Competition Law 6.1 Merger Control Notification
Exemptions Granted by the President Under the authority granted by the Export-Import Act, the President may decide to fully or partially exempt goods from import duties when imported for activities considered economically beneficial to the Maldives. These exemptions apply to: • activities aimed at reducing imports and increasing exports; • activities that introduce and promote technologies not currently available in the Maldives; • activities that expand the country’s core economic sectors, generate business and employment opportunities and improve overall living standards; • activities that enhance foreign currency inflows into the Maldives; • new or uncommon economic activities that con - tribute to diversifying the Maldivian economy; • activities that support the growth of small and medium-sized enterprises; and • entirely new ventures in the tourism sector or capi - tal expenditure and renovation projects for existing tourism investments, where costs exceed 25% of the original investment value. FTAs The Maldives is a party to the South Asian Free Trade Agreement (SAFTA), which has been effective since 2006. Under SAFTA, the Maldives allows lower tariff rates on specific goods imported from countries in the region. The free trade agreement between the Chinese gov - ernment and the government of the Maldives (the “China-Maldives FTA”), ratified in 2017, has been in effect since 1 January 2025. The China-Maldives FTA provides distinct tariff treatments for goods imported from China. • Category A: goods on which all tariffs will be elimi - nated starting from 1 January 2025. • Category B: goods on which tariffs will be elimi - nated over a five-year period. • Category C: goods on which tariffs will be elimi - nated over an eight-year period. • Category E: goods on which tariffs will remain at “base rates”.
The Maldives introduced the Competition Act (Law 11/2020) (the “Competition Act”) in 2020 and it became effective on 28 Feburary 2021. The Compe - tition Act defines a “merger” as: • the merger of two or more legal entities that were previously independent; and • the acquisition of direct or indirect control over all or part of the assets and goodwill of an entity through a joint venture agreement. The Competition Act states that the criteria to deter - mine whether a merger infringes the principles of mergers under the Competition Act are to be formu - lated and published by the Ministry within six months from the date on which the Competition Act came into force. However, the Ministry has not published any such criteria to date, leaving uncertainty over what it considers an anti-competitive merger, in terms of either revenue or market share. 6.2 Merger Control Procedure Unlike other jurisdictions, the existing legal framework for merger control in the Maldives does not mandate notification of mergers to the Minister of Economic Development, Transport and Trade, nor does it pro - vide an option for voluntary notification. However, this may change once the necessary merger control regu - lation is published by the Ministry. Where a merger contravenes the Competition Act’s provisions, the Minister of Economic Development, Transport and Trade has the authority to issue an order to amend a merger agreement and levy a fine of between MVR10,000 and MVR100,000. Following the Ministerial Order, the Registrar of Companies reserves the right to deny any service to the parties involved that could aid the execution of the merger agreement. 6.3 Cartels The Competition Act prohibits business agreements or conduct that hinders, limits or distorts competitive practices within a market. The Competition Act con - siders the following types of agreements or conduct to be anti-competitive practices:
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