The Peoples Majlis, on 22 August 2019, continued their discussion on the bill for the first amendment to the Business Registration Act.
Under the proposed amendment, Section 6 of the Business Registration Act is to be repealed, effectively removing several conditions imposed on foreign investors interested in conducting business in the Maldives. Under the current law, foreign investors are required to make a deposit of USD 100,000 or the entity must maintain capital of USD 1,000,000, and they may be subject to other restrictions such as being prohibited from operating in certain sectors. If the bill is ratified as proposed, these barriers to entry will be removed, effectively allowing for a wider scope of foreign investment opportunities. However, it is understood that although the restrictions imposed by the Business Registration Act are eased, the government will, through other regulatory instruments, restrict the areas that foreign parties may invest.
The members of Parliament, raised concerns on the proposed amendment to remove Section 6 of the Business Registration Act – Business Forms permitted for foreign persons, and policy. While many members construed this to mean that, Foreigners and foreign enterprises will have free reign to carry on with their business in the Maldives, unregulated, the Minister of Economic Development Mr. Fayyaz Ismail stated that all foreigners are required to register as per the Foreign Investment Act of the Maldives. The Minister informed parliamentarians that the current practice, as always, is that no foreign entity can carry on with a business in the Maldives unless registered under the foreign investment act. Further, those parties must also follow all regulations and rules set out by the ministry – restrictions from operating in certain industries, or working in specific vocations such as photography.
The Minister also highlighted that the Business Registration Act, and the proposed amendment, is meant to address largely procedural and administrative matters pertaining to registering business, regardless of whether they are local or foreign. The Bill is meant to streamline registration processes, and enhance ease of doing business in the Maldives.
(Photo credits: Nattu)