Businesses with foreign shareholding operating in the wholesale, retail and logistics sectors, including CSA, GSA and PSA activities, are now required to meet the applicable Foreign Investment Entry Requirements (FIER) to continue operations in the Maldives, following the conclusion of the transition period on 8 October 2026.
The Ministry of Economic Development, Transport and Trade said the expiry of the transition period marks the commencement of the applicable compliance and enforcement process under the Foreign Investment Act, Law No. 11/2024. Businesses continuing to operate in restricted sectors without meeting the prescribed requirements may be considered in contravention of the Act.
The Ministry is currently reviewing applications submitted by businesses seeking to regularise their operations through localisation, restructuring or other approved compliance arrangements. Companies that formally engaged with the Ministry before the deadline and have already begun the process are required to complete all outstanding requirements within the timelines specified by the Ministry and comply with any further directions issued.
Businesses that did not submit a transition application or engage with the Ministry by 8 October will receive formal notices under the Foreign Investment Act. The notices will provide a specified period for companies to take the necessary corrective measures, which may include discontinuing activities that are not permitted under the Foreign Investment Entry Requirements.
For businesses seeking to continue operating through localisation, the Ministry has emphasised that the transfer of shares to Maldivian shareholders must represent genuine local ownership and meaningful participation in the company. Nominal changes in shareholding that do not result in effective Maldivian participation will not meet the objectives of the policy.
Companies pursuing localisation will also be required to submit additional information and supporting documentation beyond standard share-transfer requirements. Assessments may consider payment arrangements, sources of funds and financing, beneficial ownership, effective control, and any continuing rights or interests retained by the transferring foreign shareholder or related parties. The Ministry will also assess the role and actual participation of incoming Maldivian shareholders in the business.
Detailed procedures and documentary requirements governing these share transfers are expected to be issued separately by the Ministry.
The Government’s implementation of the framework is intended to strengthen regulatory compliance, promote meaningful participation by Maldivians in key domestic economic sectors and provide greater clarity for foreign investors operating within the country’s investment framework.
The Ministry has advised affected businesses to begin or complete the compliance process without delay. Failure to meet the requirements or comply with Ministry directions may constitute a violation under Section 23 of the Foreign Investment Act and may result in enforcement action under Sections 24 and 25, regardless of whether the business had previously engaged with the Ministry.
advertisment
advertisment
