First Amendment to the Foreign Currency Act - What this means to your business?

Key Amendments to the Foreign Currency Act (32/2024)

The Maldives has introduced significant changes to its foreign currency regulatory framework through Law No. 13/2026, which amends the Foreign Currency Act (Law No. 32/2024). The amendments came into effect on 1 September 2026 and introduce changes to foreign currency conversion requirements, reporting obligations, approval requirements and enforcement measures.

The amendments are particularly relevant to businesses operating in the tourism sector and other businesses generating foreign currency.

Changes to Foreign Currency Conversion Requirements

One of the key changes relates to the foreign currency conversion requirements applicable to tourism establishments.

Changes Applicable to Non-Tourism Businesses

The amendments also introduce changes for Category C businesses, which generally cover businesses outside the tourism sector. The reporting threshold has been increased from USD 15 million to USD 25 million. This change is expected to reduce the regulatory burden for businesses whose foreign currency sales fall below the revised threshold.

In addition, the amendments provide a lower conversion requirement of 7% for businesses that are 100% Maldivian-owned, compared with the 40% conversion requirement applicable to foreign-owned entities.

Prior Approval for Certain Foreign Currency Transactions

Businesses may continue to make certain foreign currency payments permitted under Clause 4, including international transactions, dividend payments and salary payments, without prior approval from MMA.

For transactions relating to goods and services, businesses earning foreign currency will be required to obtain prior MMA approval for both receiving and making foreign currency payments, providing a clear framework for such transactions under the new regulations.

Businesses should ensure that transactions requiring approval are appropriately authorised before being undertaken.

Revised Conversion Deadline

The amendments reduce the timeframe for meeting foreign currency conversion obligations, with mandatory conversions now required to be completed by the 28th day of the following month.

Businesses should ensure that their month-end closing and reconciliation processes allow sufficient time to complete the required calculations and conversions within the revised deadline.

Strengthened Enforcement Measures

The amendments strengthen the enforcement framework applicable to foreign currency transactions, including measures addressing unauthorised and parallel-market foreign currency trading.

Foreign currency transactions must be conducted in accordance with the requirements and applicable rates prescribed by the Maldives Monetary Authority (MMA). The amendments also criminalise trading in foreign currency through unauthorised or parallel markets, including the sale or advertisement of US dollars at rates outside the bands prescribed by MMA.

The amendments provide for significant penalties for non-compliance. Fines may extend to MVR 5 million for corporate entities and MVR 1 million for individuals, depending on the nature of the offence and the applicable provisions.

What Does This Mean for Your Business?

In light of the amendments, businesses should:

• Review foreign currency obligations: Assess the applicable conversion, reporting and approval requirements based on the business category and activities.

• Strengthen accounting processes: Ensure accurate tracking of gross foreign currency sales and timely monthly reconciliations to meet the 28th-day deadline.

• Update internal controls: Ensure foreign currency transactions requiring MMA approval are appropriately authorised and conducted through permitted channels, with accounting, treasury and compliance procedures updated accordingly..

How Crowe Can Help

We can assist to assess the revised obligations under the amended framework and align your accounting, treasury and compliance processes with the revised conversion, reporting and approval requirements.