Maldives to Establish and Regulate Tourism Trust Fund Under Amended Tourism Law

The Maldives is set to enhance its world-renowned tourism industry with a new initiative aimed at streamlining financial support and development efforts. The government has proposed an amendment to the Tourism Act that will introduce the Tourism Trust Fund, shifting its regulation from the Finance Act to the Tourism Act. This strategic move aims to ensure the effective management of financial resources dedicated to the growth and sustainability of the tourism sector.
The amendment, submitted to the parliament by Ahmed Riyaz, a lawmaker from the ruling People’s National Congress (PNC), includes several key provisions aimed at fostering tourism expansion and infrastructure development. In addition to the establishment of the Tourism Trust Fund, the amendment introduces new regulations concerning the designation of islands, lagoons, and land for tourism projects under a cross-subsidy model. It also extends the timeframe allowed for construction and introduces a mechanism for the temporary closure of tourist establishments undergoing redevelopment.
A major change in the proposed amendment grants the President the authority to designate uninhabited islands and lagoons under local councils’ jurisdiction for tourism development. Despite this shift, island councils will retain their authority to allocate specific land areas for tourism projects, ensuring local governance involvement in the process.
The amendment also provides guidelines for the temporary closure of tourist establishments for renovation and upgrades. According to the new provision, lease agreements of properties undergoing redevelopment must align with regulations set forth by the Ministry of Tourism and Environment. Furthermore, establishments failing to complete redevelopment within the agreed timeframe could face penalties, including lease termination without compensation.
The Tourism Trust Fund, once operational, will play a crucial role in supporting the tourism industry by offering financial assistance, fostering sector-wide capacity building, and investing in tourism infrastructure. Funding sources will include contributions from corporate social responsibility initiatives, sponsorships from both local and foreign entities, and returns on investments. The fund will be managed with a strong commitment to transparency and sustainability, ensuring that resources are efficiently utilized for the benefit of the industry.
With the formalization of this amendment, the Tourism Industry Trust Fund currently governed under the Finance Act will be dissolved, making way for a more tourism-focused financial management framework. The Tourism Trust Fund will be overseen by a dedicated management committee comprising representatives from associations registered with the Ministry of Tourism and the Ministry of Finance. The committee’s composition and governance procedures will be outlined in regulations formulated under the amended act.
As the Maldives continues to reinforce its position as a premier global travel destination, this legislative reform marks a significant milestone in ensuring long-term sustainability and innovation in the nation’s tourism sector. The initiative is expected to create new opportunities for tourism investors while enhancing the overall visitor experience, further solidifying the Maldives’ reputation as a leading luxury travel destination.