New investment rules prioritize Maldivian businesses

The Ministry of Economic Development and Trade has gazetted revised foreign investment entry requirements, significantly reshaping the landscape for foreign investors in the Maldives.

The changes, published on Wednesday, are part of reforms under the Foreign Investment Act which came into force in September 2024.

According to the ministry, the amendments aim to create more opportunities for Maldivian businesses in competitive sectors while reserving areas that require foreign expertise. The reforms consider factors such as national security, domestic market competitiveness, the level of local business involvement, and the need for foreign capital and experience.

From the date of gazette, several sectors previously open to foreign investors will now be restricted. Some will require joint ventures with specific shareholding conditions, while others are entirely prohibited. Existing foreign businesses in these sectors will be granted a transitional period to comply with the new regulations.

Restricted sectors for foreign investment include:

1. Building servicing and maintenance
2. Business support services  
3. Resort construction under USD 10 million and general construction under USD 15 million  
4. Educational support, tutoring, and Quran classes  
5. Government and public services  
6. Non-physiotherapy clinics  
7. Tourism and hospitality operations such as picnic islands, cafes, restaurants, travel agencies, tour operators, and employment agencies  
8. Leasing and rental services  
9. Logistics and postal services  
10. Wood, rubber, brass, and handicrafts (excluding tobacco and furniture)  
11. Banking  
12. Photography, video production, and publishing  
13. General sea transportation  
14. Non-profit organizations  
15. Sand mining  
16. Advertising, event management, legal services, and market research  
17. Real estate under USD 100 million  
18. Repair services for computers, personal, and household appliances  
19. Security and investigative services  
20. General retail, wholesale, and construction wholesale

The ministry emphasized that existing investors with prior approvals and substantial commitments will be reviewed on a case-by-case basis. A Foreign Investment Transition Committee has been established to oversee compliance and facilitate the transition process.