Maldives is an island nation situated to the south west of India and Sri Lanka with more than 1900 islands distributed over 19 atolls. The country attracts over 1.2 million tourists annually and is a popular holiday destination among celebrities and high networth individuals.
Maldives has a conducive business environment for foreign investors, with liberal trade environment, strong private business sector, educated and healthy young population, modern tax system supported with proper legal protection for foreign investments. Over the last 15 years the country has experienced a stable economic growth of more than 7% annually.
All foreign investment applications are subject to review by a special committee. Initial investments with a value exceeding USD 1 million are expected in most industries.
Except for a few industries, most of the capital and technology intensive industries are open for foreign investment in Maldives, particularly the following:
Some industries in the Maldives are restricted for foreign investment.The guesthouse industry, which was previously closed for foreign investors is now open for foreign investments with a maximum of 49% foreign shareholding. Dive Center & Dive School operations is now categorized as a joint-venture investment with a maximum of 75% foreign shareholding.
Agriculture, Forestry and Fishing
Mining and Quarrying
Wholesale and Retail Trade
Transportation and Storage
Accommodation and Food Service Activities
Information and Communication
Professional, Scientific and Technical Activities
Administrative and Support Service Activities
Public Administration and Defense; Compulsory Social Security
Human Health and Social Work Activities
Other Service Activities
There are three ways to register a business entity in the Maldives, under the normal regime governed by the Foreign Investment Act (Law No: 25/79) of the Maldives.
Benefits of Registering a company in Maldives
Legal procedures required for liquidation of a company
Maldives has a modern tax system with most services available online. Government of Maldives has imposed several direct and indirect taxes.
Corporate Income Tax
All corporates are subject to 15% Income tax on income exceeding MVR 500,000 (approximately US$ 32,425) except for Banks, taxed at 25% on the total taxable income.
Sole proprietors, Partnership and Corporate Entities are required to file Income Tax return on or before 30th June of the following year and must pay the calculated taxes to Maldives Inland Revenue Authority (MIRA) within the period. Taxpayers should submit an interim return before 31st January and 31st July every year.
Personal Income Tax
Personal employment income and business income of sole proprietors are subject to following tax brackets based on the yearly income. Personal employment income is deducted at source and employer is responsible to pay the tax monthly.
Income Tax is charged on the taxable income of an individual as per the table below.:
Employee Withholding Tax
Remuneration subject to withholding tax is the amount of remuneration per month, after the deduction of the amount contributed to the Maldives Retirement Pension Scheme by the recipient of the remuneration.
Employee Withholding Tax is payable on or before 15th day of the month following the month in which salary was paid.
Non-resident Withholding Tax
Where a person that carries on any business in the Maldives makes a payment of the following kinds to a person who is not a resident in the Maldives, the person shall deduct non-resident withholding tax from the gross amount of the payment at the rate of 10%.
Non-resident Withholding Tax is payable on or before 15th day of the month following the month in which a payment subject to withholding tax was made.
Goods and Service Tax (GST)
Goods and Services Tax (GST) is a tax charged on the value of goods and services supplied in the Maldives from 2 October 2011 onwards. GST is charged under the Goods and Services Tax Act (Law Number 10/2011). Registration is compulsory if the value of taxable supplies of a business exceed MVR 1 million per annum. However, importers of goods to the Maldives and suppliers of tourism goods and services are required to register even if the value of their supplies do not exceed the MVR 1 million threshold.
The deadline to file the GST return and make payment is the 28th day of the month following the taxable period.
Green Tax is payable by tourists who stay in tourist resorts, tourist hotels, tourist vessels and tourist guesthouses. Green tax is payable at the rate of USD 6 per day of stay from tourist resorts, tourist hotels, tourist vessels and tourist guesthouses. Maldivians and resident permit holders are not required to pay Green Tax.
Green Tax Return must be filed and the payment of Green Tax must be made monthly, on or before 28th of the following month.
Maldives is a fast growing small island economy with a young and educated population having a literacy rate of 99%. English language is widely spoken and used as the primary language in doing business.
Usually Government of Maldives prefer 100% of local employment, however, for projects 100% foreign employment is allowed. Freedom to use foreign managerial, technical and unskilled workers are one of the general incentive for foreign Investments in the Maldives.
Foreign investments in the Maldives must employ Maldivian nationals except in those cases where employment of non-nationals become necessary.
Labour unions are not active in Maldives, however in some industries Employees Associations works to lobby the employee rights. Employee rights including leave, recruitment and terminations procedures are defined in the Employment Act of the Maldives.
The Pension Act (Law No: 8/2009) mandates a contribution of 7% of the pensionable wage from both employee and employer to Maldives Retirement Pension Scheme.
Government: The government office day runs from Sunday to Thursday from 8.00 am to 2.00 pm.
Private Offices:The standard working days are from Sunday to Thursday starting from 8 am, or 9 am to 5 pm or 6 pm.
Banks: All the banks in Maldives are open from 8.30 am to 2 pm on a normal day. But in Ramadan, the working hour starts from 9.30 am to 12.30 pm.
Companies Act of Maldives
Partnership Act of Maldives
Employment Act of Maldives
Maldives Pension Act
Law on Foreign Investments in Maldives
Income Tax Act of Maldives
Foreign Investment: Investing in Maldives
Foreign Direct Investment Policy
Non-Resident Withholding Tax
Income Tax - An Overview
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For further information and assistance in registering a Foreign Investment in Maldives