November 2020 – Amendments to Tourism Act

TOURISM BULLETIN

PROPOSED AMENDMENTS TO THE TOURISM ACT

INTRODUCTION

A Bill on Amendments to the Tourism Act (the “10th Amendment Bill”) has been submitted to the Maldives Parliament on 15th November 2020, proposing several key amendments to Law No. 2/99 (the Tourism Act).

A copy of the 10th Amendment Bill (in Dhivehi language) is available on www.majlis.gov.mv.

This bulletin provides a brief overview of the salient provisions of the 10th Amendment Bill.

PART A: CHANGES TO LEASE RENT

General Lease Rent Structure

The 10th Amendment Bill proposes revised lease rent structures based on atoll and land size:

  • Gnaviyani / Seenu: US$ 2–8 per sqm depending on size, up to US$ 800,000 annual rent.
  • Haa Alif / Haa Dhaalu: US$ 4 per sqm or fixed caps up to US$ 1,000,000.
  • Noonu / Raa / Baa / Lhaviyani / Kaafu / Alifu Alifu / Alifu Dhaalu / Vaavu / Meemu / Faafu / Dhaalu: US$ 8 per sqm or up to US$ 2,000,000.
  • Shaviyani / Thaa / Laamu / Gaafu Alifu / Gaafu Dhaalu: US$ 6 per sqm or up to US$ 1,500,000.

LEASES FOR INHABITED ISLANDS

  • Proposed lease rent structure also applies to tourism land in inhabited islands.
  • Different caps apply depending on atoll group and land size.

PART B: LEASE TERM EXTENSION

Lease Extension Fees

  • US$ 100,000 per year of extension if applied within 2 years of enactment.
  • US$ 200,000 per year if applied after 2 years.
  • Ministry must process applications within 1 month of receipt.

99-Year Lease Extension

  • US$ 5,000,000 if applied within first 2 years.
  • US$ 10,000,000 if applied after 2 years.

PART C: LEASING BY LOCAL COUNCILS

  • Island and city councils may designate tourism development areas.
  • Leasing must follow public bidding procedures.
  • Ministry of Tourism will regulate leasing procedures.

PART C: SPLITTING HEAD LEASES

  • Head leases covering multiple islands in a lagoon may be split into separate leases.
  • Lessees may sell or transfer rights of individual islands.
  • Guidelines on boundaries and fees will be issued by the Ministry of Tourism.

PART D: INTEGRATED TOURIST RESORT DEVELOPMENT

  • Introduces legal framework for integrated tourism developments.
  • Allows multiple operators (hotels, retail, F&B) on one island or lagoon.
  • Projects may be developed by SOEs or private parties.
  • Head lessees may lease parts of land to third parties.
  • Separate licensing required for individual operators.

Conversion to Integrated Resorts

  • Existing resorts may be converted into integrated resorts.
  • Conversion fee: US$ 1,000,000.

PART E: STRATA TITLE LEASES (VILLAS)

  • Villas may be leased individually on a strata basis.
  • Lessee obtains usage rights, not ownership.
  • Registration fee: US$ 5,000 per villa.
  • Villas may be leased to individuals (18+) or Maldivian companies.

Key Conditions

  • No subleasing allowed.
  • Cannot exceed head lease duration.
  • Must comply with Ministry regulations.
  • Mortgage of lease rights is permitted.

PART F: PRIVATE ISLAND LEASING

  • Private islands may be developed in designated lagoons.
  • Lease term: 50 years, extendable by 49 years.
  • Only SOEs may initially receive lagoon leases under presidential decree.
  • Investors may lease private islands for non-commercial use.
  • Annual rent: US$ 1 per square meter.

PART G: OTHER AMENDMENTS

  • Foreign vessel fee revised to US$ 5,000 for vessels over 15m only.
  • License durations to be determined by regulation instead of statute.
  • Definition of “Tourist” revised to align with immigration visa category.

DEFINITIONS

  • Private Island: Reclaimed islands in designated lagoons for long-term lease.
  • Developer: Entity granted rights to develop private island.
  • Investor: Party leasing private island from developer.

CONCLUDING REMARKS

This amendment introduces significant restructuring of the Maldives tourism legal framework, including leasing, taxation, and integrated development models.

SHC Lawyers LLP

This document is a general guide and does not constitute legal advice.

No responsibility is accepted for reliance on this material.

For further information, please contact SHC Lawyers LLP.

Cover photo by Ishan @seefromthesky on Unsplash.

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