Maldives Passes New Foreign Investment Law After 45 Years
President Dr. Mohamed Muizzu has ratified a new Foreign Investment Bill, replacing the Maldives' outdated foreign investment framework that had been in place for 45 years. This marks a significant update aimed at modernizing the nation's approach to international investments, ensuring better alignment with current economic development goals.
A Modern Approach to Foreign Investments
The new law introduces a more structured and proactive system for handling foreign investments. One key feature is the government’s responsibility to identify, evaluate, and prepare feasibility reports on potential business opportunities. This approach allows the Maldives to actively guide investments into sectors that support its long-term economic objectives.
Licensing and Sector Restrictions for Investors
Under this legislation, foreign investors will only be allowed to enter specific sectors designated by the government. To operate, investors must obtain a special license from the Ministry of Economic Development and Trade. This selective approach ensures that foreign investments are aligned with national priorities.
Moreover, the process of granting these licenses is now more efficient. The Ministry must approve or reject applications within 30 days, provided all necessary regulatory requirements are fulfilled. This streamlined approach aims to encourage quicker decision-making, helping investors plan and execute projects more effectively.
Government Consultation on Investment Sectors
A key safeguard introduced by the new law is the requirement for the government to consult with the Cabinet when determining which sectors are open to foreign investments. This added layer of consultation ensures that all decisions reflect national interests. Additionally, some sectors may have special conditions attached, allowing for greater flexibility while ensuring that foreign investments do not conflict with local policies.
Penalties for Non-Compliance
The law comes with strict penalties for businesses that do not comply. Foreign companies found to be operating outside of their permitted scope may face fines of up to 30 percent of their business value. Additionally, those submitting false information during the license application process could be fined between MVR 100,000 and MVR 1 million. These penalties reflect the government’s commitment to maintaining transparency and fairness in foreign investment practices.
A New Era of Economic Growth
With the introduction of this revised Foreign Investment Bill, the Maldives is positioning itself as a more attractive destination for international investors. The law balances the need for modernization with the protection of national interests, fostering a transparent and regulated investment environment.
As the Maldives looks to expand its international partnerships, this legislative overhaul is expected to attract a broader range of investors, ultimately contributing to sustainable economic growth and development across the nation.