Maldives has invited foreign investors to apply for investment licences mandated by the recently ratified new foreign investment law.
The Foreign Investment Law, which came into force from 3 December, mandates foreign investors to acquire a special foreign investment licence through the Ministry of Economic Development and Trade.
The law, ratified by President Dr Mohamed Muizzu in September, outlines the procedures to be followed to acquire foreign investment approval.
Foreign investment approval procedure:
- Submission of application by foreign parties intending to invest in the Maldives.
- Issuance of an initial No Objection Letter from the Ministry.
- Registration of legal entities for business operations.
- Issuance of the investment license from the Ministry.
- Signing the Foreign Investment Agreement between the entity and the Ministry.
In a bid to streamline and strengthen foreign investor confidence, the new government pushed the new law to create a conducive environment for foreign capital, technology, knowledge, and skill transfer through investments to increase foreign investment in the country, and to lay down stringent guidelines for the development of the country’s economy.
The new law outlines provisions for identifying investment opportunities in the island nation, including provisions on investor protection and safety measures, investor responsibilities and details the terms for compensation and other related provisions.
In addition, the law lays down special circumstances under which the investment can be withdrawn by the state and actions that would constitute violations of the law.
It also states the new law would take precedence over any foreign investment provisions laid down in any other law other than the Special Economic Zone Act.
This is the first time Maldives has amended the foreign investment laws in nearly half a century. The old foreign investment law, which was passed in 1979 has been repealed after the new law came into effect.