Maldives: A General Business Law Overview
Macroeconomic Overview
The Maldivian economy in 2025 remained strongly driven by the tourism sector, marking one of the strongest years in the country’s tourism history. Infrastructure upgrades at key international airports, together with increased bed capacity across resorts and guesthouses, supported record tourist arrivals of approximately 2.24 million and a corresponding rise in government revenue, particularly from tourism-related taxes and fees.
The sector’s performance also stimulated renewed transactional activity, particularly in hospitality financing, acquisitions, and development projects, including those within special economic zones.
The government has also implemented fiscal and regulatory measures, including foreign exchange requirements, aimed at strengthening foreign currency reserves and improving external liquidity to address public debt levels and 2026 debt service obligations.
Alongside these measures, economic diversification remains a strategic priority. Initiatives such as financial hubs, investor visa programmes, and large-scale mixed-use developments are intended to broaden the economic base and reduce structural reliance on tourism.
Reflecting these priorities, the legal and regulatory framework has undergone notable reform to support investment, diversification, and institutional strengthening, with increased emphasis on compliance, governance, and regulatory oversight.
Key Legislative and Regulatory Developments
Foreign investment framework
The Foreign Investment Act, which came into effect in December 2024, established a modern, comprehensive framework governing foreign direct investment in the Maldives. The Act sets out a structured process for obtaining foreign investment approval and codified the existing practices into a cohesive piece of law.
Revised foreign investment entry requirements were issued under the new Act that set out “open”, “closed” and “conditional” sectors across the economy and detail the sectors that are open to full foreign ownership, restricted with joint venture or minimum shareholding conditions, or closed to foreign investment entirely. Notable closures include general retail trade, domestic logistics services, human resource and employment services, and sea transport.
The Act also introduced meaningful investor protections, including guarantees of fair and equitable treatment and protection against expropriation except in cases of genuine public interest.
Intellectual property: trade mark reform
One of the most significant milestones in recent Maldivian legal history was the enactment of the Trademark Act, ratified in November 2025. The Act is scheduled to come into force in November 2026, with all subordinate regulations required to be promulgated by May 2027.
For the first time, the legislation establishes a formal, comprehensive registration system for trade marks in the Maldives, bringing the domestic regime into closer alignment with international standards, including the principles of the Paris Convention and World Trade Organization (WTO). Critically, the Act permits trade mark protection to foreign individuals and entities, which had not previously been available under the existing regime. Registrations will operate on a first-to-file basis, with a ten-year registration period and renewable terms.
Special economic zones and sustainable townships
The Maldives has advanced significant amendments to its special economic zones (SEZs), introducing a new category of development known as sustainable townships. These are large-scale, integrated developments designed to combine hospitality, residential real estate, healthcare, education, and renewable energy infrastructure. The framework targets economic diversification by attracting high-value investment beyond the traditional resort model. A significant example of this framework is Project Ayla, a USD790 million sustainable township development. The project, set for completion in 2028, will present luxury residences, an ultra-luxury resort with marina, an international healthcare facility, and a world-class school of hospitality, operating on at least 60% renewable energy.
Corporate law reform
The Companies Act replaces the 1996 legislation in its entirety and represents the most significant overhaul of Maldivian company law in nearly three decades.
The Act introduces several landmark changes to corporate structure and governance. Key changes include permitting single-shareholder companies, reducing minimum director requirements and removing the previous obligation for directors to be shareholders, thereby allowing companies to appoint independent third-party directors. However, private companies with 100% Maldivian ownership remain restricted from appointing foreign individuals to their Board of Directors, preserving an element of domestic control.
Foreign currency regulation
Foreign currency regulation has become one of the most significant policy areas in response to persistent US dollar shortages in an import-dependent economy.
The legislation imposes a mandatory deposit obligation requiring businesses to transfer their realised foreign currency sales proceeds to a designated local bank account. Mandatory conversion obligations apply on a tiered basis and distinguish between tourism and non-tourism sectors. Generally, businesses earning an equivalent of USD15 million or more annually must convert 20% of gross foreign currency sales to the local currency. Tourism establishments have the option to convert 20% of the gross foreign currency sales or USD500 or USD25 per guest (depending on the category of establishment) to meet the conversion obligation.
Impact on Investors and Businesses
The Maldives’ economic fundamentals continue to remain grounded in tourism, which continues to perform strongly. At the same time, large-scale development initiatives under the SEZ and sustainable township frameworks reflect the government’s strategy to attract high-value investment capable of diversifying revenue streams beyond the traditional resort sector.
For investors and operating businesses, the evolving regulatory environments requires increased compliance planning and legal oversight. Companies in newly restricted or closed sectors for foreign investment must assess eligibility for transition arrangements and consider restructuring strategies where necessary. Brand owners should prepare for re-registration under the Trademark Act to preserve existing rights and benefit from international priority claims, while tourism operators and major foreign currency earners must implement internal controls to meet deposit and conversion obligations, as non-compliance carries financial penalties. These developments have increased demand for legal advice on regulatory due diligence, investment structuring and cross-sector compliance, creating both challenges and opportunities for legal professionals advising on foreign investment, corporate governance, intellectual property and foreign exchange regulation.
Regulatory Outlook
For investors and businesses, the evolving landscape presents both heightened compliance obligations and meaningful opportunities, particularly in sustainable development, tourism diversification and brand protection. Recent legal reforms in the Maldives demonstrate an effort to modernise the legal framework while strengthening economic oversight and long-term resilience.
As subordinate regulations continue to be issued and transitional periods draw to a close, legal practitioners will play an increasingly crucial role in guiding clients through a more complex but ultimately more transparent and predictable regulatory environment.