Maldives Foreign Investment Application Form

This application will be complete only with the following additional documents:

A.                    If any of the shareholders of the investing company is an individual, please submit a photocopy of the passport data page, and the permanent address.

B.                    If any of the shareholding of the investing company is a legal entity, other than a public company, please submit the photocopy of the passport data page and the permanent address, of each of the share holders of the legal entity.

C.                     Photocopy of passport of each of the shareholders of the proposed investing company.

D.                   Separate declaration from all shareholders of the proposed investing company stating that they have no objection to FISB seeking a Police Clearance Report for each individual shareholder. If one or more of the shareholders of the proposed investing company is a legal entity, declaration from individual shareholders of the company shall be submitted as well.

E.                    Bank Reference or a Reference letter from a reputable bank for each of the shareholders of the proposed investing company.

F.                    If the investing entity is a company, a Resolution of the Board of Directors of the Company, confirming their decision to invest in the proposed project.

G.                   Project feasibility report including:

•       Details of the main components/ activities of the proposed project.

•       Projected financial statements including the Balance Sheet, Profit and Loss Account and the Cash Flow Statements for the first 5 years of operations.

•       Feasibility indicators, including NPV, IRR, Payback period.

•       The main assumptions underlying the financial projections, including cost, revenue, market and other non‐ financial assumptions, if any.

•       Phasing plan for the investment detailing the phasing of the main capital/ infrastructure investments.

•       Financing plan for the investment including details of debt & equity financing

•       HR Plan including:

o    Labour requirement for commencing operations under the investment with the breakdown of local and foreign labour classified by occupation and the details of wages and benefits accruing to labour;

o    Localization plan detailing proposed training for local labour and a replacement schedule for foreign labour.

H.                   Draft of the Articles of Association and the Memorandum of Association of the entity proposing to undertake the investment.

I.                     Letter of Authority or Power of Attorney for Contact Person (if applicable).

Maldives Foreign Investment Law

The Law No. 25/79

Law on Foreign Investments in the Republic of Maldives

1.                  a) A foreign government or a foreign national or a body incorporated outside the Republic of Maldives may invest in the Republic of Maldives, in accordance with the terms of this Law. The Government of the Republic of Maldives or any part representing the Government, or Maldivian nationals or a body incorporated in the Republic of Maldives may collaborate in such investments.

b)            A Foreign Investment may be made in the Republic of Maldives in accordance with section 3 hereof, in the Ministry of Tourism if the investment is in tourism, and in the Ministry of Trade and Industries in all other investments after signing an agreement and having the investment duly registered in the Ministry of Trade and Industries.

2.                  The nature and the areas of any Foreign Investment that could so be made in the Republic of Maldives shall be decided by the Ministry of Tourism should the investment be tourism related and by the Ministry of Trade and Industries in all other investments. The said investments shall have a capital acceptable to the Government of the Republic of Maldives.

3.                  All foreign nationals investing in tourism shall sign an agreement with the Ministry of Tourism. Similarly those investing in all other sectors shall sign an agreement with the Ministry of Trade and Industries. This agreement in respect of the investment shall set out the terms and conditions and the manner of implementation of the investment scheme and programme.

4.                  Of those foreign parties referred to in section 1. A) of this law, only a bank or a Government recognised by the Government of the Republic of Maldives, or a person or body whose financial status is either guaranteed by a bank or such institution or is acceptable to the Government of the Republic of Maldives, may investment in the Republic of Maldives.

5.                  An investment made in the Republic of Maldives will be permitted to carry on operations and activities for the full term of the agreement if there is compliance with the Law on Foreign Investments in the Republic of Maldives. And such investments will be duly facilitated by the Government of the Republic of Maldives.

6.                  The Government of the Republic of Maldives may, without giving any notice or after giving such notice that it deems necessary, suspend an investment before the expiry of the period under the agreement, either where the Foreign Investor indulges in an activity detrimental to the security of the country of where such temporary closure is necessary in the opinion of the Government of the Republic of Maldives in the interests of national security.

Any temporary closure referred to herein would not lead to the Government of the Republic of Maldives or any party representing the Government, or Maldivian nationals incurring any liabilities therefore or thereby nor would it relieve the Foreign Investor of his obligations under an agreement other than the agreement referred to in Section 3 of this Law, subsisting at the closure referred to in this Section.

7.                  If, after due investigations, it cannot be concluded within sixty days of the temporary closure of an investment referred to in Section 6 of this Law, that the Foreign Investor had, infect, indulged in activity detrimental to the security of the Republic of Maldives or even contemplated such an act, then the Government of the Republic of Maldives will give fair compensation to the Foreign Investor and allow the Foreign Investor to resume the investment.

8.                  If a Foreign Investor fails to comply with the Laws of the Republic of Maldives and if there be failure to comply with the same even after a notice by the Government of the Republic of Maldives to so comply, the Government may closure the investment and terminate the agreement relating to such investment.

9.                   Capital belonging to an investment that is closed under Section 6 and 8 of this law would be permitted to be taken out of the country in a manner to be agreed on by the parties.

10.              If the investment operations in the Republic of Maldives be such that local raw materials could be used, such items shall be obtained and in the process. Provided however, where suitable materials for the processes are not obtainable in sufficient quantities locally, they may be obtained from outside the Republic of Maldives.

11.              Maldivian nationals shall be employed in investments in the Republic of Maldives except in those cases where employment of non-nationals becomes necessary.

12.              If the items produced by the investment is a requirement of the Maldivian people, a percentage of the production shall, if necessary, be required to be marketed in the Republic of Maldives in a manner to be agreed to by both parties.

13.              The profits of the investment in the Republic of Maldives may be remitted out of the country under the terms of the agreement entered into under Section 3 of this Law.

14.              The Government of the Republic of Maldives may waive duty and tax investments carried out in the country for a period, the Government, at its discretion specifies. The tax referred to in Law No. 15/79 (Law on Tourism in the Maldives) does not come under the provision of this Law.

15.              In the event of disagreement on any matter in regard to the investment made under this Law and on failure to reach an agreement by discussion between the two parties concerned, the matter in dispute shall be dealt with in accordance with the agreement.

16.               As from the date of operation, this Law will apply to all Foreign Investments to be made in the Republic of Maldives and also to those already established in the country.

17.              In this Law:

a)             “Foreign Investment” means the goods, money and services brought into the Republic of Maldives by Foreign Governments, bodies or Nationals as are referred to in Section 1 and 4 hereof, to undertake an economic activity in the Republic of Maldives, exclusive of those imported by them under Law No. 4/79 relating to Business undertakings of Foreign Nationals in the Republic of Maldives

b)            “Capital” means money and property

c)            “Foreign Investor” includes the shareholders, directors, managers and all the employees of the investment

d)            “Investment in Tourism” means the construction or the management of a Tourist Resort or a Guest House as referred to in the Note to Law No. 15/79.

e)            The singular as used herein shall include the plural and vice versa.

Note: This Law No. 25/79 (Law on Foreign Investment in the Republic of Maldives) was amended by the Citizens’ Majlis 1 February 1989 and came into effect on 9 February 1989.

What is the cost?

 Royalty

The Government of the Republic of Maldives refrain from duty and tax investments on Foreign Investors. However, businesses are entitled to pay an annual royalty to the government with regard to the investment option they had chosen.

•      Those foreign investment entities, in which less than 51% of the ownership is help by Maldivians or wholly owned by Maldivian entities, are obliged to pay an annual royalty akin to 3% of gross turnover or 15% net profit, whichever is greater.

•      Those foreign investment entities, whose ownership is at least 51% of held by Maldivians or wholly owned Maldivian entities incorporated in the Maldives, are obliged to pay an annual royalty akin to 1.5 percent of gross turnover or 7.5 percent of Net Profit, whichever is greater.

Registration fees

Upon submission of all relevant documents by the investors, all companies incorporated in Maldives are entitled to pay Fees to the Registrar of Company as followed:

1.      Annual Fee of USD 156 (approx)

2.      Stamp Fee of USD 39 (approx)

3.      Company registration fee depending on the authorized registration fee capital of the Company (Minimum authorized capital of USD 156 [approx.] is required by Law)

4.      An administration fee of USD 2,000

Note: Re-registration of a company in the Maldives or Re-registration of a company resident overseas in the Maldives are all free of charge.

How to apply?

Foreign investors going for Option 1, where they form a joint venture with a Maldivian

national or company will be communicated by the Maldivian Government within 10 working days.

Those selecting Option 2, where the business in wholly owned by foreign firms will be communicated within 30 working days by.

Submissions

1.  If any of the shareholders of the investing company is an individual, a photocopy of the passport data page, and the permanent address must be submitted.

2.    If any of the shareholding of the investing company is a legal entity, other than a public company, please submit the photocopy of the passport data page and the permanent address of each of the shareholders of the legal entity.

3.  Photocopy of passport of each of the shareholders of the proposed investing company.

4.   A Bank Reference or a Reference letter from a reputable bank must be submitted for each of the shareholders of the proposed investing company.

5.   If the investing entity is a company, a Resolution of the Board of Directors of the Company, confirming their decision to invest in the proposed project is to be applied.

6.  Project feasibility report must be applied; including the following documents:

•         Detailed review of the main components and the activities of the proposed investment project.

•         Project’s financial statements including the Balance Sheet, Profit and Loss Account and the Cash Flow Statements for the first 5 years of operations.

•         Feasibility indicators, including NPV, IRR, Payback period.

•         The main assumptions underlying the financial projections, including cost, revenue, market and other non- financial

•         Assumptions, if any

•         Phasing plan of the investment along with the detailed phasing of the main capital/ infrastructure investments.

•         Financing plan for the investment including details of debt & equity financing

•         HR Plan including:

i)        Labour requirement for commencing operations under the investment with the breakdown of local and foreign labour

classified by occupation and the details of wages and benefits accruing to labour;

ii)      Localization plan; highlighting the training scheme for local labour and a replacement schedule for foreign labour.

7.   Draft of the Articles of Association and the Memorandum of Association of the entity proposing to undertake the investment.

8.  Letter of the Authority or Power of Attorney for Contact Person (if applicable) must be submitted.

9.  A copy of the signed Joint Venture agreement between the JV partners of the proposed investment in the Maldives.

See also: Guide to Investing in the Maldives

http://maldivesbusinessopportunities.blogspot.com/2016/12/guide-to-investing-in-maldives_13.html

What has been approved so far?

Although not exclusive, the following lists out investments that has been already approved by

the Government and hence would be speedier in approvals provided the relevant requirements are observed.

1.  Financial consultancy

2.  Auditing services

3.  Insurance services

4.  Water sports activities

5.  Commercial diving (salvage)

6.  Domestic air transport services

7.  Catering services for airlines

8.  Big Game fishing

9.  Technical support services i.e. photocopies, elevators, ATM machines etc

10.  Manufacturing of garments

11.  Water production, bottling and distribution

12.  Consultancy in public relation, editorial, advertising and translation services

13.  Packing and distribution of cement

14.   General Sales Agency, Passenger Sales Agency and Cargo Sales Agency for airlines and shipping lines

15.  Spa operations and management

16.  Water treatment plant

17.  Boat building

18.  Software development and related support services

19.  Domestic maritime ferry services

20.  Financial leasing services

21.  Fish processing activities

22.  Traditional medical services

23.  Production of underwater photography, videography and postcards

24.  Block ice making

25.  Speciality Restaurants

26.  Professional business valuation services

27.  Flying School

28.  IT System integration and implementation services

Note: Approvals for investments on the “positive list” are subject to relevant regulatory approvals, where applicable.

(a) Of those foreign parties referred to in section 1. a) Of this law, only a bank or a Government recognised by the Government of the Republic of Maldives, or a person or body whose financial status is either guaranteed by a bank or such institution or is acceptable to the Government of the Republic of Maldives, may invest in the Republic of Maldives.

(b)   An investment made in the Republic of Maldives will be permitted to carry on operations and activities for the full 1 term of the agreement if there is compliance with the Law on Foreign Investments in the Republic of Maldives. And such investments will be duly facilitated by the Government of the Republic of Maldives.

(c)   Capital belonging to an investment would be permitted to be taken out of the country in a manner to be agreed on by the parties.

(d)  If the investment operations in the Republic of Maldives be such that local raw materials could be used, such items shall be obtained and in the process. Provided however, where suitable materials for the processes are not obtainable in sufficient quantities locally, they may obtain from outside the Republic of Maldives.

(e)     Though foreigners are allowed to take up employment in those cases where non-Maldivians become extremely necessary, it is highly recommended that Maldivian nationals shall be employed in investments in the Republic of Maldives.

(f)   If the items produced by the investment are a requirement of the Maldivian people, a percentage of the production shall, if necessary, be required to be marketed in the Republic of Maldives in a manner to be agreed to by both parties.

(g)   The profits from investing in Maldives may be repatriated back to host country under the terms of the agreement in the Law.

See also: Guide to Investing in the Maldives

http://maldivesbusinessopportunities.blogspot.com/2016/12/guide-to-investing-in-maldives_13.html