The regulation on commercial activities of local councils, formed under the amendments brought to the Decentalisation Act, has been publicised.
The regulation provides the framework for local councils to establish businesses with other local councils or private companies. The regulation states local councils are allowed to have shares of up to 20% in a company formed with a private party.
The regulation further states local councils seeking to establish businesses must identify the effect such a business would have on other businesses established in a city, atoll or island under its jurisdiction. The regulation also states the amount of jobs created through the business and the contribution of the business to the overall Gross Domestic Product (GDP) of the city, atoll or island must be taken into account when establishing the business.
Local authorities were permitted to conduct commercial activities, under the amended Decentralisation Act. The amendments were brought to empower local councils and grant financial independence to the councils.