Why Set Up Your Business in Maldives? by Mohamed Rehan
The Government of Maldives recognizes that Foreign Direct Investments (FDI) is a crucial element in the economic development of the island nation and acknowledges the importance of foreign investments to the overall prosperity of the country.
Furthermore, Maldives incorporates a liberal trade environment with a dynamic private sector while the legal structure is development-oriented, all of which are conducive towards trade and investment.
Meanwhile, foreign investors enjoy a simple policy environment in Maldives and the foreign investment law guarantees security of foreign and domestic investments.
The island nation is an ideal environment for foreign investments because of the untapped potential in natural marine resources as well as the strong workforce in the country.
Moreover, these have been the definitive reasons why internationally famous brands such as Hilton, Four Seasons, One & Only or even Club Med have chosen to invest in the country’s tourism sector.
Other major areas of foreign investment in the country relate to the transport and telecommunication sectors, water production and distribution as well as the financial sector which is has attracted globally renowned corporations such as Hong Kong Shanghai Banking Corporation (HSBC), Ernst and Young (E&Y), PriceWaterhouseCoopers (PwC) as well as the KPMG.
But why invest in the Maldives?
Foreign investors, regardless of their corporate infrastructure are encouraged to enter and operate in the Maldives – while these are easily accessible for foreign investments, on the grounds that they present all the necessary documents and hold a commendable business background.
Smaller investors or enterprises are encouraged to enter into joint ventures with Maldivian parties or companies registered in the Maldives. In addition to this, investors making investments in excess of USD5 million do not face ownership restrictions – granting them flexibility to operate as a wholly-owned foreign investment.
The incentives of investing in the Maldives are many which include the right to 100% foreign ownership, legally backed investment guarantees as well as provision of overseas arbitration of disputes. Furthermore, investments in the Maldives provide long-term contractual agreements and long-term lease of land; which are ideal for businesses or FDIs looking to invest in the tourism sector.
Certain countries restrict foreign investments from using foreign managerial employees, which is not the case when it comes to the Maldives. The country not only provides the freedom of utilizing foreign managerial employees but technical or unskilled workers as well. Furthermore, foreign investments do not face foreign exchange restrictions or reparations of earnings or profits.
In recent years, other major brands have landed in the Maldivian soil such as the InterContinental, Marriott International, Atmosphere Hotels and Resorts among many others and have been operating successful luxury resorts in the country.
The foreign investment window is not only exclusive to hospitality or tourism, but pretty much in every major economic segment as well. This is observable on the number of international fast-food franchises expanding their businesses into the Maldives as well which include popular names such as Burger King, PizzaHut, Gloria Jeans Coffees and several other chains; which operate on a royalty sharing model.
These businesses have been effective and one such example is Australia’s franchise chain, Gloria Jeans Coffees which has already opened a second outlet at the satellite town of Hulhumale’; apart from their original outlet in Male’ City.
Meanwhile, luxury resorts owned or operated by popular global brands happen to attract travelers in large numbers as well due to brand awareness, popularity and identity – meaning that the return on investments on such large-scale projects have been nothing but fruitful for the entities behind them.
To sum up a long story, it is reasonable to state the obvious that Maldives is a safe haven for not just travelers but also for foreign investors who are looking to turn their investment portfolios into a bigger success than they already are.