New Guidelines on Acquisition Costs Payable under Boundary Regulation

The Tourism Ministry, on 7 May 2018, published a guideline specifying the acquisition cost payable under Section 3(b)2(iii) of Regulation Number 2012-R7 (Boundary Regulation).

As per Section 2(a), the guideline indicates that the acquisition cost for a lagoon that is to be leased out separately from an island designated for the development of a tourist resort, shall be determined in accordance with schedule 1 of the guidelines. The schedule denotes the lease acquisition cost to be the total size of the island in hectares multiplied by the base rate indicated in the schedule. The base rate varies depending on which atoll the lagoon is located in.

The guidelines indicate that the size of the area shall be determined by the concept drawings approved by the Ministry, after which the Ministry, at its discretion can require immediate full payment of the total acquisition cost, calculated in accordance with 2(a) of the guidelines, to the Maldives Inland Revenue Authority. Once the payment has been made, the Ministry shall enter into a new lease agreement with respect to that area.

Once the leased-out area has been dredged, a land survey report must be submitted to the Ministry. Based on that land survey report, the Ministry may, at its discretion, enter into an addendum to the initial lease agreement, with a revised acquisition cost for that area.