December 2024 – Regulatory Update – Foreign Currency Act

Information Memorandum

President Dr. Mohamed Muizzu’s Press Briefing

Comprehensive Analysis of the Historic 15-Hour World Press Freedom Day Evaluation

Briefing Date: 03rd May 2025  |  Memorandum Issued: 15th May 2025  |  Analyst Desk: SHC Law & Tax LLP

Introduction

On 3rd May 2025, President Dr. Mohamed Muizzu marked World Press Freedom Day by convening a historic, continuous 15-hour press conference. The session began with an exhaustive executive presentation detailing active performance indicators, strategic legislative ratifications, infrastructural transitions, and upcoming structural plans for the Maldives archipelago.

This memorandum serves as a consolidated general briefing of the public statements and administrative milestones outlined by the Executive branch across core macroeconomic and social sectors.

Sector-by-Sector Comprehensive Summary

Focus SectorStrategic Highlights & Performance Deliverables
Presidential Pledges An ambitious infrastructural and social developmental matrix comprising 2,130 total projects was announced to structurally address public commitments. The pledges are categorically cataloged as follows:

  • 289 commitments derived from the original party manifesto.
  • 1,051 commitments introduced during the presidential campaign trail.
  • 484 commitments registered directly during official regional island tours.
  • 305 commitments established at miscellaneous public town-halls and state events.
Foreign Policy & Sovereignty The administration underscored its core “Maldives First Policy,” emphasizing national unity, sovereign isolation from external friction points, and protection of geographical borders.

While maintaining balanced external relations globally, the executive firmly re-verified the Cabinet decree executed on 15th April 2025 to ban Israeli passport holders from entry into the Republic, standing in explicit legal solidarity with the Palestinian people amidst the ongoing Gaza crisis.

Financial Standing & Treasury Reserve
  • Sovereign Debt Servicing: As of April 2025, the Maldives cleared foreign debt obligations totaling approximately USD 162,000,000.
  • Revenue Generation: Between 1st January 2025 and 30th April 2024, state coffers generated USD 811,000,000 in structural revenues and sovereign free aid.
  • Fiscal Surpluses: The fiscal dashboard posted a budget surplus of USD 123,300,000 alongside a positive primary balance standing at USD 227,000,000.
  • Deleveraging Target: The state is tracking a baseline macro-plan to contract total external liabilities by USD 610,000,000.
  • Foreign Currency Stabilization: Since the formal ratification of the Foreign Currency Act (32/2024), commercial banks have executed conversions amounting to USD 214,000,000, significantly solidifying the central bank’s liquid foreign reserve.
Tourism Indicators & Expansion Strategies Performance Tracker: As of April 2025, the Maldives registered 823,658 total tourist arrivals, charting a robust 7.4% volume increase year-on-year compared to the matching period in 2024.

Logistical Connectivity: Intentions were confirmed to accelerate inner-atoll transits via new commercial helicopter operations alongside expanding the fleet size and flight frequencies of the national carrier, Maldivian.

“Addu Asseyri” Southern Strategy: A 5-year Destination Development Strategy was introduced for Addu City to diversify economic yield away from the central atolls. Key components include:

  • Setting up 6,000 regional tourist beds and generating 10,000 new employment positions.
  • Revitalizing the dormant Shangri-La resort operations and creating a dedicated southern seaplane infrastructure hub.
  • Developing localized cultural heritage villages, specialized wellness zoning, marine protected areas, and a dedicated regional hospitality academy.

Underdeveloped Atoll Influx: Targeted concession frameworks—including structural import duty reprieves and land acquisition cost waivers—will be deployed to attract greenfield resort investments into five marginalized sectors: Haa Alif, Haa Dhaal, Shaviyani, Thaa, and Laamu Atolls.

Environment, SEZs & Eco-Tourism The administration introduced Vision 2040, legally anchoring the country’s objective to reach fully developed nation status by 2040, backed by a strict carbon net-zero target by 2030.

Eco-Tourism Pipeline: Development frameworks have been formalized to scale eco-tourism footprints across protected ecologies on specific islands:

HA. Baarah
Sh. Farukolhu Funadhoo
Noonu Kendhikulhudhoo
Sh. Funadhoo
Haa Dhaalu Keylakun

Sustainable, specialized economic developments were also verified for the urban expansions of Rasmale’ and Laamu Atoll.

Infrastructure & Mega-Projects
  • Velana International Airport (VIA): The targeted operational launch date for the new International Passenger Terminal is fixed for October 2025.
  • Aviation Network Expansion: Structural plans are moving forward to construct international-tier airports in Kahdhoo, Kulhudhufushi, Huvadhoo, and Laamu Atoll, while finalizing the structural modernizations of Addu City-Gan and Hanimaadhoo airports before the end of 2025.
  • Greater Malé Connectivity Project (GMCP): Marine link works are entering concluding phases. Additionally, the official feasibility review for the upcoming Thilafushi-Giraavaru bridge links has been fully finalized by the Asian Infrastructure Investment Bank (AIIB).

Special Insight: Project Solar City (Special Economic Zone)

First Anchor Initiative Under the SEZ Act (Law No. 32/2013)

The state has formally mobilized a flagship mega-scale renewable energy project named Project Solar City. The infrastructure deployment involves constructing a massive 100-megawatt floating solar photovoltaic (PV) farm situated in a lagoon matrix approximately 4–5 kilometers off Hulhumalé.

Executed as a strategic joint-venture with Canadian developer Abraxas Power Corp, the asset will contain grid-scale battery energy storage systems (BESS) interconnected to the Greater Malé main electricity grid via deep-sea submarine cabling.

Representing a total foreign direct investment capitalization of USD 187 Million (with over USD 100 Million earmarked purely for localized high-yield solar components), the project utilizes the fiscal relaxations, tax shields, and fast-track regulatory processing of the Special Economic Zones framework. The site is scheduled to become fully operational by 2027, anchoring the state’s transition mandate to generate 33% of national electrical demand from renewable sources by 2028. (In tandem, the island of Vaadhoo in Raa Atoll will reach 100% solar self-sufficiency by the end of 2025 as a micro-grid proof-of-concept).

Constitutional & Electoral Reforms

The Shift to Ranked-Choice (Preferential) Voting

President Dr. Muizzu announced intentions to send a comprehensive democratic optimization bill to the People’s Majlis, aimed at introducing deep constitutional amendments to streamline state spending during national elections.

The centerpiece of the reform replaces the historical two-round runoff system with a unified Preferential or Ranked-Choice Voting System. Under this system, electors rank political candidates in sequential order of preference on a singular ballot:

  • If no single candidate secures an absolute outright majority (50% + 1 vote) of first-choice rankings, the lowest-ranked candidate is automatically eliminated.
  • The eliminated candidate’s votes are instantly redistributed to the remaining contenders based on the secondary preferences marked by those specific voters.
  • This algorithmic elimination loop continues instantly within the single counting cycle until one candidate secures a clear consolidated majority.

The administration noted that the current two-round layout places an unnecessary financial drain on the state’s budget. For example, the execution of the 2023 presidential runoff mandated massive administrative, logistical, and staffing outlays. Moving to a single-round preferential framework is estimated to save the national treasury approximately USD 8,000,000 per cycle.

Additional Constitutional Amendments in the Bill: Clear legal mechanisms enabling the public recall of underperforming Members of Parliament, the absolute dissolution of Atoll Councils to decrease bureaucratic bloat, and the alignment of presidential and parliamentary election cycles onto a concurrent calendar date. A nationwide public referendum will be organized within the next twelve months to secure public assent for these electoral adjustments.

© 2025 SHC Law & Tax LLP. All rights reserved. The text and structured summaries contained in this document are prepared strictly for general overview tracking and knowledge management purposes; they do not represent explicit, binding legal advice or formal statutory representation. Neither the firm nor its practicing partners assume any liability or professional responsibility for operational business configurations or investments made based on these summary contents.

📄 Looking for the document? Click here to download the PDF file

Authors