The government has submitted the Foreign Investment Act to the Maldives Parliament. The bill was submitted to the parliament by Parliamentarian Ahmed Azaan Marzooq.
The newly submitted bill is proposed by the government to define the rules for determining the areas in which foreign investors can invest in Maldives, including rules relating to foreign investments. The government notes that this act will increase foreign investment and create a favourable environment for foreign capital, technology, knowledge and skills to be brought to Maldives.
According to the bill, an investment promotion mechanism should be established to attract and retain foreign investors. The act should also determine the areas in which foreign investors can invest, the rules and conditions for issuing permits and the protection and security of foreign investors. The bill also states that the regulations to promote investment in Maldives should be made by a ministry entrusted with the responsibility by the government. The work has now been entrusted to the Ministry of Economic Development and Trade.
Once the bill becomes law, the minister will have to determine and announce the areas where foreign investors cannot invest in the country. It states that in designating these sectors, the likelihood of a threat to national security, the impact on the competitiveness of the industry, the development of indigenous enterprises in the industry or sector and its contribution to productivity in the long run should be considered.
It also stipulated that areas in which investment can and cannot be made should be reviewed every three years. It also states that the investment permission will be required if the shares of a Maldivian company are transferred to a foreign entity and that this can only be done with companies designated for foreign investment.
The Foreign Investment Act provides for full protection and security for foreign investors and their investments. As such, the capital and profits are entitled to be repatriated to the country of the investor. However, the bill may restrict foreign investment or related rights to maintain sovereignty, maintain defence security and safety, protect the environment and protect human rights.
Furthermore, once the Foreign Investment Act comes into force, violators will be fined not more than 30 percent of the investment. Submission of incorrect information to obtain a license, will be fined between USD 6,494 and USD 64,94 depending on the seriousness of the case.
Additionally, the existing Foreign Investment in Maldives Act will be repealed with the enactment of the new Act. With this, the investments licensed under the Foreign Investment in Maldives Act will be transferred to the new Act and foreign investments permitted under the Ministry of Tourism will be given a period of 12 months to register under the new Act.
It was also noted that the Foreign Investment Act will be used in relation to matters concerning foreign investments except for those related to the Special Economic Zone Act. The Foreign Investment Act was accompanied by bills to amend the Financial Securities Act and the Business Registration Act. As such, an amendment was proposed to the Business Registration Act to allow foreign investors to invest in permitted securities.