Starting a Business In Maldives

Business Opportunities in Maldives

Maldives is a beautiful country with several small islands. Located about 620 miles southwest of India and Sri Lanka, Maldives’s growing upper-middle economy attracts several investors to establish a business here. 

The most thriving business sector in the Maldives is the tourism sector. On average, in the last decade, tourist arrivals counted 106619.76. This number skyrocketed in December 2022 when the count reached 184051. Tourism and import duties give the government 90% of its tax revenues. Adding to growing footfalls in the country every year, the abundance of seafood, coastal fruit, and vegetables has also seen an increase in food-related businesses.

The Maldives comprises more ocean than land, making fisheries the second-largest business sector in the country after tourism. Over 20% of the country’s workforce is involved in this sector. Fisheries products and fish drive over 98% of Maldives’ physical exports by value and quantity. The fisheries business sector boosts boat-related business as well. 

One other business sector thriving in the country is the fashion industry. Boat building, handicrafts, and garments production account for 18% of the country’s GDP.

Companies can set up businesses in these sectors to enter the Maldivian market and its customer base. 

Benefits of Starting a Business in Maldives

There are several advantages of doing business in Maldives, listed below:

Stable economy

Maldives’s stable economy helps investors receive stable investment benefits. In the last 25 years, Maldives’ annual GDP growth rate has been 7.5%, predicted to grow by 6.1% in 2023. Additionally, the World Bank supports Maldives’ development as the country became a member of the World Bank’s sister organization, the International Finance Corporation, in 1983. Since then, Maldives has received more than $200 million in investment from the IFC. 

High literacy rate

The country has a high literacy rate of 98% which stipulates that the workforce is efficient and even freshers are skilled. Additionally, Maldives uses English as its business language. Companies can establish business in the Maldives to benefit from the skilled and talented workforce. 

Tourism hotspot

Tourism in the Maldives is an ever-growing field due to its beautiful beaches, alluring islands, and enchanting resorts. As per the World Bank, the economy grew by 12.4% in 2022 due to tourism. Due to this, the country has seen an increase in foreign investments. Companies can tap into the country’s customer base by setting up a business in Maldives in the tourism sector. 

Requirements for Starting a Business in Maldives

Maldives company incorporation requirements are as follows-

Company name and address

• It’s essential to choose a name for the company that should be unique. Hence, the businessperson should choose more than one name as a backup. 
• They should also have a registered address to operate their business.
• They can register their name and address at the Ministry of Economic Development office. 

Bank account

• The best course of action for the businessperson would be to open a local bank account for company-specific transactions. 
• Additionally, they will need this account to deposit the required capital while registering the company. 

Shareholders and directors

• Any established company should have at least two shareholders. They can either be individuals or other companies. 
• The company should also have at least two directors. One of those two directors should either be a Maldivian citizen or a foreigner with a Maldivian work visa. 
• The company should also have a company secretary, a Maldivian citizen.

Documents

For the company registration process in the Maldives, these documents are needed –

• Filled up a Business Registration application form
• Filled up Name Search Approval form
• Memorandum of Association
• Articles of Association
• Identity cards of shareholders, directors, and employees
• An acceptance letter written by the company’s Managing Director and another from the company’s secretary

If the company that is being established is an existing company’s branch, then the additional documents needed are – 

• The documents of board members as evidence of their shares in the company
• Financial documents of the existing company

Types of Business Structures in Maldives

While setting up a company in Maldives, one should decide what kind of company they intend to open. There are three types of companies in Maldives –

Limited liability company

• Foreigners completely owns their companies if they establish a limited liability company. 
• The shareholders in such companies are only liable for the amount they have contributed to the capital. 
• The Maldives government has a 5% profit tax rate on income from outside the Maldives, making it an obvious choice for setting up a company in the Maldives.

Partnership company

• There are two types of partnership companies: general partnership companies and limited liability partnership companies.

1. 1. General partnership companies have two or more partners jointly liable for the company’s debts and obligations and unlimited liability. 
   2. Limited liability partnership firms have two or more shareholders. Still, in this case, the shareholders are only liable for the debts depending on their share of the capital. This is mainly because shareholders in these types of companies are held as separate legal entities. 

Sole proprietorship

• A sole proprietorship is the easiest anf one of the best options for a foreign investor to open a small business in the Maldives. 
• Starting a sole proprietorship is the easiest way to enter the Maldivian market. 
• The company can operate under the owner or a different business name. 
• This is not a legal entity, and the owner is solely responsible for all debts. 

Company Registration Process

The steps to incorporate a company in Maldives are as follows –

Step 1: Submit the application to the Ministry of Economic Development

• The businessperson first needs approval from the Ministry of Economic Development Maldives for foreign investment in the country. 
• Companies can visit the official website, trade.gov.mv, to get the application. The prescribed format to submit the application form and supporting documents are available on Ministry’s business portal – business.egov.mn/Home/Investments. 
• The application can also be emailed to fiu@trade.gov.mv.

Step 2: Get approval from the Ministry of Economic Development

• After verification, the Ministry of Economic Development will approve foreign investment applications in Maldives. 
• They also consult with pertinent shareholders during this process. 
• It usually takes three days to process but can be prolonged to 10-14 days if Ministries need to review the application further. 

Step 3: Company registration

The businessperson must decide the company type they want to register. The four types available are 

• Re-register a company that is the branch of a larger company abroad.
• Register a new company.
• Register a partnership company.
• Register to acquire the shares of an already existing local company.

The application forms for each type can be found online at business.egov.mv and trade.gov.mv. 

Step 4: Sign FIA

• Except for tourism-related businesses other businesses must sign a Foreign Investment Agreement (FIA) with the country’s Ministry of Economic Development. 
• For any tourism-related business where the company has acquired a piece of land from the government, they must sign with the country’s Ministry of Tourism.

Step 5: Obtaining license and permit

• Once all steps are completed, the company must apply to acquire trades and licenses, depending on their business type. They can only commence operation once they have the license for their work. 

How Much Does it Cost to Incorporate a Company in the Maldives?

Knowing the required cost of incorporating a company in the Maldives is essential. Knowing the amount can help any businessperson avoid issues that might arise later on. The fees are – 

Are Foreigners in Maldives on Certain Passes Allowed to Start a Business in Maldives? 

A business visa is at the top of the list of requirements to do business in Maldives. Maldives business visa allows a person to enter the country multiple times for a maximum of 90 days within 12 months. Anyone who has not specified their intention of setting up a company in Maldives on their visa will not be able to start a company there.

The requirements to acquire a business visa in Maldives are as follows –

• Documents supporting the intent of opening a business, i.e., experience letter or certificates of qualification
• IM24 Business visa application form
• Copy of the schedule of the applicant’s Expatriate Medical Insurance Policy 
• A color copy of the applicant’s bio-data page of their passport
• If applicable, the sponsor’s letter stating the applicant’s duration of stay
• The applicant’s registration copy
• If applicable, IM30 Visa Applicant Information Form
• Passport-size photograph

Government Assistance for Foreign-owned Businesses 

The Maldives government has been trying to bring more foreign investors to boost the country’s economy. Some benefits they provide foreign business owners are –

• The country lets foreigners lease islands and lands for a long time for business purposes. Additionally, Maldives lets foreigners sign contracts regarding businesses for a long time.
• Maldives has no restrictions on foreign exchange and repatriation of profit.
• The government has opened an agency named ‘Invest Maldives,’ leading to the country’s investment registration, facilitation, and promotion.
• Invest Maldives provides unified business registration services that simplify the registration process.
• The government has no restrictions on foreign exchange and repatriating the company’s capital proceeds or profits.
• Large-scale projects or investments will receive the added benefit of customs duty exemptions.
• Businesspeople get an easy entry by obtaining a corporate resident visa or business visa for business purposes.
• The government does not pressure the company to hire local managerial or technical staff.
• The government provides long leases on lands of up to 99 years to an investor or businessperson.

How Multiplier Can Help

Starting a business in any foreign country and making it successful needs comprehensive knowledge of laws, regulations, and culture. It will be easier to focus on growing your business if you get help from experts with experience navigating the country’s laws and culture.

Multiplier is an EOR platform offering experts with the required knowledge in 150+ countries. We help you hire local employees and manage their compliance complexities, including and not limited to managing employee payroll, employee taxes, drafting employee contracts, and more.