Effective 3 December 2024, the Maldives commenced the implementation of the Foreign Investment Act (Law No: 11/2024), marking the repeal of the long-standing Foreign Investment Act of 1979. Ratified earlier on 3 September 2024, the new law establishes a modern and comprehensive framework designed to both attract and regulate foreign investment. With streamlined procedures and strengthened investor protections, the Act represents a major advancement toward aligning the Maldives’ investment landscape with global standards.
The Ministry of Economic Development and Trade (MED) is currently the authority responsible for overseeing the implementation and enforcement of this Act.
Key Features of the New Foreign Investment Act
Eligibility for Foreign Investment
The Act outlines a broad scope of parties eligible to apply for foreign investment approval, including:
- Foreign individuals.
- Foreign and mixed-shareholding companies.
- Companies incorporated abroad with 100% Maldivian shareholders.
- Local partnerships and re-registered entities with foreign shareholders.
- Joint ventures between Maldivians and foreigners.
- Foreign NGOs and legal entities governed by foreign jurisdictions.
Investment Areas: Open, Restricted, and Closed
Foreign investment opportunities are divided into three distinct categories:
- Open Areas: Sectors where foreign investors may operate freely.
- Restricted Areas: Investments permitted with specific conditions set by MED.
- Closed Areas: Sectors off-limits to foreign investment, based on factors such as national security, market competitiveness, and environmental impact.
As of 3 December 2024, these classifications remain guided by the existing Foreign Direct Investment Policy, until further updates.
Investment Approval Process
Foreign investors must follow a four-step approval process:
- Certificate of No Objection – Issued to confirm eligibility.
- Fulfilment of Requirements – Investors must meet all specified conditions.
- Foreign Investment License – Granted upon successful completion of due diligence.
- Investment Agreement – Finalised with the Ministry.
Criteria for Investment Approval
When reviewing applications, the Ministry will consider:
- Financial capability and funding sources.
- Immigration and legal compliance of the investor.
- Fulfilment of conditions for investments in restricted areas.
- Alignment with national interests.
Additional factors include job creation, technology transfer, export potential, environmental impact, and sectoral competitiveness.
Investor Rights and Protections
The Act guarantees several key rights:
- Fair and Equitable Treatment: Ensuring protection aligned with international norms.
- Right to Repatriate Profits and Capital: Subject to temporary controls during major economic crises.
- Stability Guarantee: Investments are protected from arbitrary changes in law, except where related to sovereignty, security, or public emergencies.
- Protection Against Expropriation: Investments cannot be expropriated without fair compensation, based on fair market value up to the date of expropriation.
Revocation of Foreign Investment Licenses
The Ministry may revoke a license if:
- False or misleading information was provided.
- The investor is declared bankrupt.
- Ownership is restructured to be fully local.
- The business is inactive for over a year or engages in unauthorized activities.
- The investor fails to meet license terms or loses prerequisite sectoral licenses.
- The entity is dissolved or liquidated.
Penalties for Non-Compliance
| Violation | Penalty |
| Unlicensed or unauthorized activities | Up to 30% of investment value |
| False/misleading license application | MVR 100,000 – MVR 1,000,000 |
| Breach of license terms | MVR 100,000 – MVR 1,000,000 or up to 10% of investment value |
| Ignoring Ministry directives | MVR 100,000 – MVR 1,000,000 or up to 10% of investment value |
Transitional Provisions
All existing foreign investments licensed under the previous Act are considered compliant under the new law. However, current license holders must re-register under the new Act by 3 December 2025.
A New Era for Foreign Investment
The Foreign Investment Act of 2024 signals a strategic shift in how the Maldives approaches international investment. By introducing a more transparent, rule-based system that balances national interests with investor rights, the country is poised to attract a broader and more diverse range of foreign investors—while ensuring investments contribute meaningfully to sustainable economic development.