FDI policy shift now allows foreign shares in guesthouses

A guesthouse located in suburban Hulhumale'. (File Photo/Sun)

The foreign direct investment policy of the Maldives has been shifted to allow foreigners to take part in the guesthouse businesses in the country with a minority share.

The previous policy was that foreigners could not buy shares in a guesthouse business, however, after the business was started shares were sometimes transferred to foreigners through courts.

A case of an American who was defrauded by his local partners with a guesthouse in Hulhumale’ had hit the spotlight. 

However, with the new policy in effect since March 11, now states that foreigners can acquire shares in a guesthouse business in certain designated locations of the country. However, foreigners are still limited to 49 percent of the shares. 

Such businesses can only be started with a minimum investment of USD 250,000. Under the new policy, foreigners can now invest in 92 types of businesses while being barred from 24 types.

Automatic opportunities for 37 other businesses are also extended under the policy. 

It is estimated that there are more than 500 guesthouses operating in the country.