MOT Revises CP Extension Fee Rules

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Ministry of Tourism (MOT) has announced a significant change to the rules governing Construction Period (CP) extension fees for resort development projects in the Maldives. In a gazette announcement on 6 August 2024, the MOT revised the regulations, making it mandatory for resort developers to pay the Corporate Social Responsibility (CSR) fee in full before the CP extension is granted.

Key Changes:

• Upfront Payment: Previously, the CSR fee could be paid in quarterly installments after the resort became operational, with a two-year grace period. The new rule eliminates this grace period and requires full payment upfront.

• Condition Precedent: The MOT has made the agreement to pay the full CSR fee a condition precedent to the grant of any CP extension. This means that no extension will be issued unless the fee has been paid in its entirety.

• Amendment Citation: The revised regulations are cited as R-64/2024 and amend Section 3 (b) (2) of the existing rules.

Implications for Resort Developers

This change represents a major shift in the financial obligations for resort developers seeking CP extensions. It eliminates the option to defer payment and necessitates a significant upfront investment. Developers will need to carefully consider the financial implications of this change when planning their projects and extension requests.

Second Amendment

This is the second amendment to the CP extension regulations since their introduction in 2022, with the last revision on 6 December 2022. The MOT has not provided specific reasons for this latest amendment, but it is likely aimed at ensuring timely payment of CSR fees and streamlining the CP extension process.

Stay Informed

Resort developers and industry stakeholders are advised to review the revised regulations carefully and understand the new requirements. It is essential to factor in the upfront CSR fee payment when planning project timelines and budgets.