MALDIVES LAW AND PRACTICE Contributed by: Shaaheen Hameed, Hassan Maaz Shareef, Aminath Amathulla, Nazahath Ahmed, Isha Ali Raoof, Aifa Shareef, Noorul Hudha Ahmed and Mohamed Azmee, Premier Chambers LLP
• compliance with any conditions set out in regulations governing restricted sectors or investments subject to additional require - ments; • the extent to which the proposed investment may pose a risk to national security; • the potential effect of the proposed invest - ment on existing businesses within the relevant sector; • the extent to which the investment is expect - ed to generate employment opportunities and contribute to the development of human resources in the Maldives; • the potential to increase the export of local products, goods or services as a result of the investment; • the environmental impact of the proposed investment; and • the potential for introducing and develop - ing technology in the Maldives through the investment. Eligibility Under the FI Act, the following parties are eligible to invest in the Maldives. The following foreign entities: • companies with 100% foreign shareholders; • companies with both Maldivian and foreign shareholders; and • companies incorporated outside of the Mal - dives with 100% direct or indirect sharehold - ing by Maldivians. The following businesses incorporated in the Maldives: • partnerships and companies consisting of shares held by foreigners; and • companies re-registered in the Maldives under the Companies Act.
Joint ventures between Maldivians and foreign - ers, foreign NGOs and legal entities incorporated outside of the Maldives are also eligible to invest in the country. 2.2 Procedure and Sanctions in the Event of Non-Compliance Stages of Approval The FI Act has introduced the following stages of obtaining approval for a foreign investment to establish in the Maldives under the FI Act. • Submission of the foreign investment applica - tion: a formal application must be submitted to the Ministry of Economic Development and Trade (the “Ministry”) along with the required documentation relating to the investment, investor profile and proposed activity. • Issuance of the no objection letter: following a review of the application, the Ministry may issue a letter of no objection to eligible appli - cants. This letter sets out the specific proce - dures the applicant must complete before the investment can proceed further. • Issuance of the foreign investment licence: upon complying with the procedures and submitting the required documents, the Ministry issues a foreign investment licence to the investor, enabling them to legally engage in the approved business activity in the Mal - dives. • Execution of the investment agreement: fol - lowing the granting of the licence and the completion of the formalities, the Ministry enters into a foreign investment agreement with the foreign investor, formally regulating 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,
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