A group of tiny islands scattered in the Indian Ocean, the Maldives may not seem like the bustling business environment for your business. However, with the large and constantly growing tourism sector, the country may be more of a business hub than one might think. So is it possible for an expat to start a business in the Maldives and what does it take to do so? Find out in this article.
Environment
Known worldwide for its natural beauty and white sandy beaches framed with turquoise waters, the Maldives is a prime tourist destination. Thus, tourism and hospitality are the two primary sectors where business opportunities exist. In fact, most foreign businesses in the country are either hotels, resorts, restaurants or travel and recreational services.
While Dhivehi is the official language in the region, English is widely spoken and understood and is the main language of business. The same goes for currency. The country's national currency is the Maldivian rufiyaa but US dollars are widely used across the country as well. This makes communication and negotiations in the country much easier for foreigners.
On top of that, there are several incentives that encourage foreign investment in the country:
- foreigners have the right to 100% company ownership
- legal disputes can be arbitrated abroad
- limited liability: a shareholder's liability is limited to their contribution
- low minimum capital requirements: around $130
- land can be leased for long-term
- foreign companies are free to hire managerial and other talents from abroad
- there are no limits on profits repatriation
There is a variety of companies you can set up in the Maldives including a private ownership company, a partnership, a cooperative society, a sole proprietorship company, and others.
Procedures
The first step of setting up your company in the Maldives will be choosing and registering the name, which has to be unique. Then, you will need to fill in and submit the application for company incorporation as well the article of association, which will need to include the following information:
- approved company name
- a statement of whether you are opening a private or public company
- registered full address of the company
- business objectives
- authorised company capital and how it will be produced
- shareholder details (if applicable), etc.
You will then need to pay the relevant fees calculated based on the registered shared capital ' this part of the process is handled by the Ministry of Economic Development.
Once you've been approved and fees have been paid, you will need to register your business at the Registrar of Companies and apply for a Tax Identification Number (TIN). You will then need to create a register a company seal. This is the final step.
Note that fees apply throughout the process: you will need to pay MVR 2,000 (about $130) as Annual Company Fee, a variable registration fee as well as MVR 500 (about $32) for stamps.
The final decision about whether your application is successful or not is made by the Ministry of Economic Development. The application review process includes police screening of all investors, determining the investors' financial standing, background checks, and more.
Useful links:
Company registration guide
Taxation for foreign companies in the Maldives
We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
