The government has moved a comprehensive bill to overhaul the leasing framework for lagoons and uninhabited islands, set to replace the long‑standing Uninhabited Islands Act.
The legislation, sponsored by ruling party lawmaker Saudullah Hilmy of Thinadhoo North, was submitted to Parliament and outlines a new system for designating, allocating, and managing these natural assets.
Under the proposed Lagoons and Uninhabited Islands Lease Bill, the President will assume authority to earmark lagoons and uninhabited islands for a broad spectrum of uses, including tourism, fishing, agriculture, industry, economic and social projects, state functions, and any special purposes stipulated by other laws.
While islands earmarked for tourism and industrial development will be leased directly by the government. All other uninhabited islands under the jurisdiction of local island councils will manage the leasing and administration. Lagoons, meanwhile, will be managed by the relevant Ministry.
The bill opens the door for both domestic and foreign investors. Uninhabited islands designated for commercial purposes may be leased to Maldivian‑registered companies, partnerships, or private individuals, as well as to foreign entities that re‑register in the Maldives. For any other purpose, uninhabited islands can be allocated to any Maldivian citizen, registered business, or association for activities such as large‑ or medium‑scale industrial ventures, economic projects requiring a minimum investment of USD 64,850, aquaculture, and related enterprises.
Lease terms are clearly delineated with an island designated for a specific purpose may be leased for up to 21 years, with a possible extension that caps the total tenure at 50 years. For islands without a pre‑designated use, the bill permits a maximum initial lease of five years, renewable for additional five‑year periods.
Financial provisions stipulate that acquisition fees for leased islands will be set by the Ministry of Finance, while rent schedules will be governed by the new law—except for existing agreements under the current Act, which will remain valid but will be subject to the new bill’s regulations aside from rent and maintenance rules.
To safeguard the integrity of these ecosystems, the bill imposes steep penalties for infractions. Illegal activities on leased uninhabited islands will attract fines not exceeding USD 32,425, whereas any breach of the lease law itself could incur penalties of up to USD 64,850.