The Maldives has introduced revised foreign currency conversion requirements for tourism establishments and major foreign currency-earning businesses under the First Amendment to the Foreign Currency Act, strengthening the regulatory framework governing the flow of foreign currency through the domestic banking system.
The First Amendment to the Foreign Currency Act, Law No. 32/2024, was ratified on 31 August 2026 and came into force on 1 September 2026. The changes revise several important areas of the existing foreign currency framework, including mandatory conversion percentages, conversion deadlines, eligibility thresholds for businesses outside the tourism sector, foreign exchange licensing and procedures governing certain payments made in foreign currency.
A major component of the amended framework concerns Category A tourism establishments, including resorts, integrated tourist resorts, private island resorts and resort hotels. These businesses are now required to convert 40 percent of their monthly gross sales through the banking system. The previous arrangement that allowed eligible establishments to choose to convert USD 500 per tourist has been removed.
The revised requirement is particularly significant for the Maldives’ resort industry, which remains the country’s largest generator of foreign currency and a central pillar of the national economy. The Maldives has developed one of the world’s most recognised resort tourism sectors, attracting international travellers across the luxury, premium and leisure segments while generating substantial demand for aviation, transport, food supplies, construction, telecommunications and a wide range of supporting services.
By establishing a percentage-based conversion requirement for Category A establishments, the framework creates a standard mechanism linked directly to business performance and monthly sales. As resort revenues increase, the amount of foreign currency channelled through licensed banks will correspondingly increase, strengthening the role of the formal banking system in handling foreign exchange generated by the country’s principal export industry.
The revised framework is also expected to provide greater predictability in the way resort-generated foreign currency enters the domestic financial system. With tourism businesses earning substantial foreign currency from international visitors, greater circulation through domestic banks is intended to support foreign currency liquidity and strengthen the capacity of the financial system to meet the needs of businesses, consumers and the wider economy.
There has been no change to the basic conversion requirement applicable to Category B tourism businesses. Category B establishments, which include tourist hotels, tourist guesthouses and tourist vessels, are required to convert either USD 25 per tourist arrival or 20 percent of their monthly gross sales, in accordance with the applicable requirements.
The amendment also introduces important changes for Category C businesses outside the tourism sector. Previously, businesses outside the tourism and financial sectors generally fell within Category C requirements when their annual foreign currency revenue reached USD 15 million. The amended Act raises this threshold to USD 25 million, narrowing the requirement to larger foreign currency-earning businesses.
Category C businesses meeting the applicable threshold are now required to convert 40 percent of their monthly gross sales received in foreign currency through the banking system. However, a separate rate applies to businesses that are 100 percent Maldivian-owned, which are required to convert seven percent of their monthly gross sales.
The higher USD 25 million threshold provides additional space for smaller and medium-sized businesses outside the tourism sector to expand their operations before becoming subject to the mandatory conversion requirements applicable to large foreign currency earners. At the same time, the reduced seven percent requirement for wholly Maldivian-owned businesses recognises a distinction within the domestic business sector while maintaining their participation in the formal foreign exchange framework.
Another significant change concerns the deadline for completing mandatory foreign currency conversions. Under the previous framework, businesses had a longer period of up to three months to fulfil their conversion obligations. Under the amended law, the prescribed amount relating to each month’s foreign currency earnings must be converted through an MMA-licensed bank by the 28th day of the following month.
This means that businesses subject to the requirements must complete the prescribed conversion relating to foreign currency income earned during September by 28 October. The monthly timetable is expected to create a more regular flow of foreign currency through the banking sector while giving regulators and businesses a clearer and more consistent compliance schedule.
Businesses subject to mandatory conversion requirements must deposit the relevant foreign currency proceeds into designated foreign currency accounts maintained with banks licensed by the Maldives Monetary Authority. The required conversion must subsequently be completed through the banking system within the prescribed deadline.
The regulatory framework also requires relevant businesses to provide the MMA with information concerning their designated foreign currency accounts in the manner specified by the Authority. This strengthens reporting arrangements and enables the central bank to maintain greater visibility over foreign currency flows covered by the legislation.
The amendment also strengthens regulation of the buying and selling of foreign currency. Foreign currency may only be bought and sold at rates, or within exchange-rate bands, determined by the Maldives Monetary Authority, while businesses providing foreign currency exchange services are required to operate under licences issued by the Authority.
The regulatory framework governing foreign exchange businesses sets out licensing and operational requirements and provides the MMA with a clearer supervisory basis for overseeing entities involved in the buying and selling of foreign currency. These measures form part of broader efforts to increase transparency within the foreign exchange market and encourage transactions to take place through regulated financial channels.
The law also establishes penalties for selling, attempting to sell or advertising foreign currency at rates exceeding the rate or permitted band determined by the MMA. The provisions are intended to reinforce compliance with the official foreign exchange framework and strengthen confidence in authorised market channels.
Further procedures have also been introduced concerning businesses that earn income in foreign currency and wish to settle certain purchases of goods or services in foreign currency. Where approval is required under the Foreign Currency Act and implementing regulations, affected businesses must obtain authorisation from the Maldives Monetary Authority before completing the relevant foreign currency transactions.
Amendments to the General Regulation on Foreign Currency and the Regulation on Registration under the Foreign Currency Act were subsequently gazetted on 10 September 2026. The regulatory changes provide further procedures relating to registration, foreign currency payments, designated bank accounts and applications concerning mandatory deposit and conversion obligations.
Under the updated framework, businesses subject to the relevant requirements are also expected to plan their foreign currency expenditures in advance. The regulations provide procedures through which projected expenditure to be settled in foreign currency is submitted to the MMA and approval obtained where required, giving businesses a clearer structure for managing their foreign currency commitments.
The Government’s revised foreign currency framework comes as the Maldives continues to strengthen its financial architecture around an economy in which tourism remains the principal source of foreign exchange. Resorts and other tourism establishments generate substantial inflows from visitors around the world, while businesses across construction, trade, transport and services rely on access to foreign currency for imports and international payments.
Increasing the amount of tourism-generated foreign currency circulating through domestic banks is intended to deepen foreign exchange liquidity within the regulated financial system and improve the availability of foreign currency for legitimate economic requirements. The approach also provides the MMA with stronger regulatory tools for overseeing the domestic foreign exchange market.
For resorts and other affected businesses, the revised framework makes regular financial planning increasingly important. Businesses will need to closely monitor monthly foreign currency receipts, ensure that proceeds are deposited into designated accounts, complete required conversions before the 28th-day deadline and incorporate applicable foreign currency expenditure approval procedures into their financial management systems.
The amendments mark a further development in the Government’s broader efforts to strengthen monetary and financial stability, increase the circulation of foreign currency through the banking system and establish a more transparent and structured foreign exchange market. For businesses operating in the Maldives, particularly the internationally significant resort sector, understanding the revised requirements and maintaining timely compliance will be central to operating effectively under the country’s updated foreign currency framework.
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