Maldives is a small island country in the Indian Ocean. It is one of the smallest Asian countries both in terms of area and population; It has more than one thousand coral islands. Tourist all over the world visits Maldives to enjoy its natural beauty. The economy of Maldives is well developed, currently, its GDP per capita stands at USD 10,535.79.
Tourism and fishing industry are the two main sectors of Maldives. The country earns most of its revenue from these two sectors. The economic growth of Maldives has been powered mainly by the tourism sector. The GDP recorded around $1.5 billion in 2010 and it now it is growing rate a rate 4% per year. Because of its highly developed economy, business personality all over the world wants to invest in Maldives. Here are some of the main reason to invest in Maldives.
- Highly developed economy & new business opportunities.
- Low corporate tax rate.
- Stable political condition.
Advantage for The Foreign Investors
There are many advantages of starting a business in Maldives as a foreign investor. The government of Maldives provides different types of business to attract more foreign direct investment. In Maldives the foreign investors mainly focused on the sector of resort management, telecommunication, accounting, and related banking sector. The Ministry of Economic Development is the responsible government body to grant all sort of business licenses in the Maldives. Following are some of the advantage of doing business in Maldives –
- Setting up a 100% foreign ownership company.
- No restriction on sending their earning profit to the own countries.
- Emigrant’s in Maldives are not required to pay personal income tax. They need to pay only 3% remittance tax.
- The government encourages projects that are environment friendly. The government also offers training to local employees.
- It takes maximum of 30 days to complete the entire process of company registration in Maldives.
Disadvantage for The Foreign Investors
Though there are lots of advantage of doing business in Maldives, there is also some disadvantage. The following disadvantage are–
- If the foreign investors violate the security act, the government of Maldives can suspend any foreign investment with or without notice.
- As a Muslim country, the constitution of Maldives is based on Islamic Sharia Law. Some business law could be critical to maintain for the foreign investors
- Corruption is a big problem in Maldives. The public sector and public officials are engaged in bribery.
Work Culture in Maldives
The working weeks in Maldives start from Sunday to Thursday. The standard working hours starting from 8 am, or 9 am to 5 pm or 6 pm. However, the standard workday for all Manufacturing sector is 8 hours. All the banks in Maldives are open from 8.30 am to 2 pm on a normal day. But in Ramadan, the working hour starts from 9.30 am to 12.30 pm.
Most of the shops in the Maldives stay open until 11 pm. However, some of the shops also shut down in the evening around 4 to 6 pm. Most of the business remains shut down for a temporary amount (15 to 20 minutes) during the day for prayers. The government office day runs from Sunday to Thursday from 7.30 am to 2.30 pm. During Ramadan, the office starts from 9.30 am to 1.30 pm.
- A transparent political environment is offered to foreign investors. The Foreign Investment Law guarantees investment protection.
- The Maldives is a tax haven for corporate companies.
- All the registered companies in Maldives can now own land if the Maldivians hold the majority of the company shares.
- The government has the political goal of moving from the service provider to the regulatory authority and strengthening the role of the private sector.
Opening a business in Maldives
For opening a business in Maldives, you need to adopt the following 5 points –
- Firstly, search and select your company name (name must be unique). Collect the application forms for company incorporation and fill out the forms with details.
- Secondly, pay the necessary registration fees. The registration fee depends on the scale of shared capital.
If the authorized capital is minimum MVR 10000 the fess charges are MVR 1000.
If the authorized capital is more than 10000 MRV, the payable charges are 4000 MVR and types of income tax in Maldives.
- One the fees are paid now you are eligible to register with the register of companies. It will take a maximum of five days. You must pay around 2000 MVR as annual company fee with the variable registration fee. 500 MVR are also charged as stamp duty.
- You are required to make a company seal, and it will cost you around 200 to 250 MVR.
- Finally, you need to register the company seal with the register of companies. It will take one day (free of charges).
Starting a business in Maldives is much easier than before. The government eases the process of company registration to attract more foreign direct investment. Besides the government also provides many facilities like – lower corporate tax, opportunities for setting up 100% foreign owned company, etc.
However, as a foreigner, you might not know the complete process of company registration. Therefore, it is recommended to take expert advice or to contact a business consulting firm in Maldives. Among many business consulting firm– S & F consulting Firm is one of the best. They assist mainly foreign investor with any types of business problems.
S & F provide service like- foreign company registration, accounting, bookkeeping, auditing and many other services.
Frequently Asked Question
Q: How much fees is required to register a company name in Maldives?
- Company name registration is completely free in Maldives.
Q: How much is Annual company fee?
- The annual company fee in Maldives is around MVR 250.
Q: Can foreigner setup 100% foreign owned company in Maldives?
- In some specific sector foreigners can setup 100% foreign owned company.