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
if an investor with an approved foreign invest - ment 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 have to meet the minimum initial investment thresholds applicable to the specific business activity they intend to undertake. These thresholds vary depending on the sector and range from USD250,000 to USD5,000,000. For business activities that do not have a predefined investment amount, the terms can be negotiated with the authorities. As the regulations under the FI Act have not yet been published, sectoral investment requirements are currently governed by the Foreign Direct Investment Policy (the “FDI Policy”) which was published on 11 February 2020 and remain in force until the regulations come into force. Foreign Shareholding The maximum allowable percentage of foreign shareholding also varies depending on the type of business activity. Under the FDI Policy, for - eign shareholdings may be between 40% and 100%, depending on the proposed activity. For business activities that do not have a specified minimum initial investment threshold, the appli - cable foreign shareholding percentage is not predetermined and may be subject to negotia -
eign investment. The Ministry has to establish a review committee to consider these matters. If the complaint involves a decision made by a committee member, that member will be exclud - ed from the committee convened to review the matter. If the investor’s complaint is not resolved through a decision of the Ministry, the investor has the right to refer the matter to the relevant court or pursue the dispute resolution process outlined in the investment agreement. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity The most common forms of corporate vehicles in the Maldives are companies and partnerships. Another form of vehicle used for conducting business is a co-operative society. Any person who wishes to conduct any business in the Mal - dives must register their business under one of these types of corporate structures. Unlike all other forms of corporate structures, which can be utilised to conduct any type of business, co-operative societies can only be formed to achieve common economic and social needs shared by a group of individuals within a society. Companies registered in the Maldives, includ - ing re-registered foreign entities are regulated by the Companies Act. Partnerships are regu - lated by the Partnership Act of the Maldives (Law 13/2011). There are regulations made under the relevant Act which also regulate matters relating to each corporate entity. There is a distinct law relating to co-operative societies as well. Companies The following types of company can be incorpo - rated in the Maldives.
tion with the authorities. 2.4 Right to Appeal
Under the FI Act, investors have the right to challenge decisions made by the Ministry or any other government authority concerning their for -
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