Maldives passes new law, introducing mandatory regulations for tourist establishments to exchange part of their foreign currency earnings into Maldivian Rufiyaa. President Mohamed Muizzu has recently ratified the Foreign Exchange Bill which was passed by the Parliament on Thursday.

While the new legislature is set to take effect next year, the bill sets forth the following key provisions:

The bill was passed by Parliament on Thursday and sets forth the following key provisions:

• Category A Establishments (registered resorts, integrated tourist resorts and private islands): such establishments can exchange USD 500 per tourist or 20% of their total revenue in foreign currency.
• Category B Establishments (registered guesthouses, hotels, liveaboards): such establishments can opt to exchange USD 25 per tourist or 20% of their total earnings.
• Non-tourism businesses generating more than USD 15 million per year must exchange a percentage of their foreign exchange income monthly. Such entities are required to register with the MMA.

However, some stakeholders have voiced concerns about inconsistencies in how these concessions may apply across different types of resorts. Maldives Association of Tourism and Travel Operators (MATATO), Maldives Monetary Authority (MMA), Kanifushi Investment and Maldives Association of Tourism Industry (MATI) are the four key stakeholders who have submitted written comments on the bill.

MMA initially drafted the bill to formalize the foreign exchange regulations which were introduced in October 2023. Since the bill was passed, more than 50 resorts have informed MMA that they do not intend to comply with the new regulations without another feasible option.

The finance committee has made several changes, including provisions for concessions in order to ease compliance. Children under the age of 12 are exempt from being counted as tourists when calculating the required currency exchange. Additionally, tourist establishments do not require to exchange USD for tourists spending less than 24 hours at the establishment, tourists hosted by establishments on a complimentary basis, and tourists hosted by the government.