Foreign businesses operating in sectors exclusively reserved for Maldivians that transfer ownership to local citizens to enter the legal framework will be subjected to rigorous verification to determine who receives profits and who holds operational control, the Ministry of Economic Development, Transport and Trade cautioned. Under the existing Foreign Investment Act, newly established Foreign Investment Entry Requirements restrict wholesale, retail, and sales agent services exclusively to domestic ownership, effective from 8 October.
Foreign enterprises within these restricted domains received a one-year grace period to either cease operations or align with the revised regulations by altering their corporate scope or transferring full equity to Maldivian citizens. As the statutory deadline for winding down operations expired, numerous enterprises submitted proposals modifying their commercial activities or transferring shares, officials reported. Authorities are presently examining the documentation to determine formal outcomes.
Applicants proposing ownership changes must demonstrate the transaction yields "genuine and meaningful Maldivian equity ownership and participation," the ministry asserted. The government is rigorously evaluating the nature of ownership transfers, the origin of financing structures, the identity of ultimate beneficial owners, and the degree to which any foreign shareholder retains commercial discretion. Applicants must submit exhaustive documentation to substantiate these elements, the ministry explained.
The scrutiny aims to ensure proposals represent a true transfer of operational control, preventing paper-only restructurings designed to circumvent policy objectives. Firms failing to account during the mandated wind-down period will receive formal notices compelling the immediate cessation of unauthorised commercial activities, regulatory officials stated.