The Government of Maldives has strengthened regulatory scrutiny over foreign businesses operating in sectors reserved exclusively for Maldivian ownership, with authorities confirming that proposed ownership transfers to local citizens will undergo comprehensive verification to ensure that control, profits and commercial decision-making genuinely rest with Maldivians.
Under the Foreign Investment Act and the revised Foreign Investment Entry Requirements that took effect on 8 October, wholesale, retail and sales agent services are reserved exclusively for domestic ownership. The framework forms part of the Government’s broader efforts to strengthen opportunities for Maldivian entrepreneurs, protect sectors designated for local participation and ensure that foreign investment remains aligned with the country’s economic priorities and regulatory requirements.
Foreign businesses previously operating in these restricted sectors were provided with a one-year transition period to either discontinue their activities or bring their operations into compliance with the revised framework. Businesses were permitted to restructure their commercial activities, revise their corporate scope or transfer full equity ownership to Maldivian citizens within the prescribed period.
Following the expiry of the statutory wind-down deadline, a number of businesses have submitted proposals seeking to amend their permitted activities or transfer ownership to Maldivian shareholders. The Ministry of Economic Development, Transport and Trade is currently reviewing the submitted documentation before determining whether the proposed changes satisfy the requirements of the new regulatory framework.
The ministry has emphasised that any ownership transfer must result in genuine and meaningful Maldivian equity ownership and participation. Authorities are therefore examining not only the names recorded as shareholders, but also the source of financing used in the transaction, the identity of the ultimate beneficial owners, the distribution of profits and the extent to which any foreign party continues to exercise influence over management, commercial decisions or day-to-day operations.
Applicants are required to provide detailed supporting documentation demonstrating that ownership and operational control have genuinely been transferred. The strengthened verification process is intended to prevent arrangements in which ownership is transferred only on paper while effective control or financial benefits continue to remain with foreign parties.
The Government’s approach is aimed at ensuring that the revised foreign investment framework delivers meaningful economic participation for Maldivians while maintaining a transparent, predictable and well-regulated business environment. By closely assessing beneficial ownership, financing structures and operational control, the authorities are seeking to ensure that businesses operating in protected sectors comply with both the legal requirements and the wider policy objectives behind domestic ownership restrictions.
Businesses that failed to regularise their operations during the permitted transition period will be issued formal notices requiring the immediate cessation of unauthorised commercial activities. The enforcement process reflects the Government’s commitment to consistent application of the law while supporting legitimate businesses that have taken the necessary steps to comply with the revised regulatory framework.
The strengthened system is expected to provide greater clarity for investors and local businesses while reinforcing Maldivian participation in key commercial sectors and supporting the Government’s wider objective of building a more inclusive, accountable and sustainable domestic economy.
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