This jurisdiction is located in the Indian Ocean and is famous for its beautiful landscapes and tourism industry. It also has well-developed telecommunication, banking, and accounting sectors of the economy. But, this country also creates favorable conditions for foreign investors in other sectors. If you are considering this jurisdiction as a possible option for setting up your business, the next opportunities may become available to you.
Major Forms of Legal and Business Presence
If you wish to incorporate a company in the Maldives, these are basic options for realizing this intent:
- Private Limited Company – an option for doing business where certain restrictions to the transfers of shares shall be applied (those are indicated in the entity’s statutory documents). The liability of shareholders, in this case, is limited to the amounts contributed to the entity. It should have from 2 to 50 shareholders and a minimal amount of chartered capital of MVR 2,000.
- Public Limited Company – an opportunity for doing business involving external financing. This body corporate may offer its shares for subscription and it allows their next transfers without restrictions. It can be established by 10 persons at least without limitations to the maximum number of shareholders. The minimal amount of statutory capital of MVR 1,000,000 is required in this case.
Registration Requirements and Steps
If you intend to open a company in the Maldives, passing these registration steps may be preliminary necessary:
- Listing business priorities you wish to realize through a local enterprise.
- Selecting and checking a corporate business name for a future enterprise.
- Collecting details about the company's founders, beneficiaries, and officials.
- Arranging a registered business address for an enterprise.
- Drafting and formalizing statutory and registration documents.
- Submitting the package of required documents for the state registration.
- Registration for tax and social security purposes.
- Opening a corporate bank account.
- Obtaining additional licenses and business permits that may be required for certain regulated activities.
Legal and Regulatory Framework
In the jurisdiction, foreign investors may expect to operate in a transparent political and economic environment. The local government ensures favorable conditions for starting a business by foreigners by providing different incentives, creating free zones, and simplifying the procedures of establishing and maintaining business in this country.
The Foreign Investment Act and the Companies Act are major laws related to the area of doing business in the Maldives. The Ministry of Economic Development is the major state authority foreign investors may deal with while entering and doing business in this jurisdiction.
Tax System of Maldives
An opportunity of establishing a company in the Maldives should be assessed along with the following tax highlights:
- Corporate income tax (CIT) rate – 15%;
- Personal income tax (PIT) rate – 15%;
- Goods and services tax rate – 6%;
- Withholding tax rates (for non-residents) – (i) dividends – 10% (ii) interests – 10% (iii) royalties – 10%;
- Capital gains tax rates – (i) corporate – subject to the basic CIT rate (ii) personal – subject to the basic PIT rate.
Advantages of the Jurisdiction
If you wish to buy a company in the Maldives or establish a new one, the following advantages may become available to you:
- 100% foreign ownership is allowed;
- easy and straightforward process of company registration;
- zero restrictions on transferring earned profits to countries of residence of foreign investors;
- high level of assets and investment protection;
- developed infrastructure.