A Foreign Direct Investment (FDI) Policy which would govern the approval guidelines in relation to foreign investments in the Maldives has been published. The new policy consolidates existing FDI approval practices and introduces new policy changes. The main objective for publishing the policy is to set out the regulatory requirements and procedures in relation to FDI transparent and certain/predictable.
The new policy introduces an Automatic Route and a Government Route for FDI. These routes are subject to the FDI Entry Requirements (which include the maximum shareholding percentage, minimum investment amount and duration of foreign investment) detailed in Annex I of the policy. Provided the qualifications in FDI Entry Requirements are met, under the Automatic Route, foreign investment approval will be automatic/guaranteed. However, under the Government Route, approval will not be automatic/guaranteed and will be at the Government’s discretion.
Other notable changes under the policy include, guesthouse business being opened for foreign investment, which was previously 100% restricted for FDI. Pursuant to the new policy, foreign investors can now hold up to 49% shares of a company conducting guesthouse business.
The Ministry of Economic Development also has set certain service benchmarks for the approval/registration of FDIs under the new policy (i.e. under Automatic Route 2 working days and under Government Route 5 to 14 working days).
The policy came into force effective 11 February 2020 and all new foreign investment applications submitted after this date will be subject to the new policy.