Tourism Law may change again

Government has proposed several amendments to the Tourism Act. An amendment bill to achieve the changes is now in parliament. After preliminary debate, the bill is now in committee stage – waiting to be reviewed in detail. 

If these changes are accepted, and the bill is ultimately adopted, that would be the 11th Amendment to the Tourism Act of 1999. 

The last amendment, the Tenth Amendment was introduced on 27 December 2020. 

This post outlines some of the key highlights of the new tourism amendment bill. 

Government Shares in JV Companies 

Rules are to change again for transfer of shares in joint venture companies created with Maldives Government.

The new rule is to apply for joint ventures companies established before the Tenth Amendment came into effect. These joint venture companies may hold islands, lagoons or land for tourism development.

According to the new proposal, the shares held by the government in those companies may be sold to the other shareholder(s) or even third parties.

The transaction is to be carried out in accordance with regulations made by the Ministry of Finance. 

The minimum value of transfer shares will be decided based on a valuation carried out by an independent valuer. This valuer is to be appointed according to the Public Finance Instructions issued under the Public Finance Act. Any such valuation ought to factor in the acquisition fee as well the land rent charged by the Ministry of Tourism for comparable islands designated for tourism. 

The current practice is explained in a previous blog post of ours. Please read it here.

Separate leases for lagoons

The current law is found in the Tenth Amendment to the Tourism Act. According to that, lease bifurcation is allowed only in respect of islands (whether natural or created) and forming part of the same lease. 

The proposed change will now allow a lease having more than one lagoon within its demised premises to be split even without the requirement of an island (being there). 

This gives holders of lagoons the benefit to slice their lease, and grant separate leases in respect of individual lagoons to third parties. 

According to the new proposal, the rule will be effective only in respect of lagoons leased before the Tenth Amendment came into effect. 

Land Rent

The land rent (lease rent) in respect of islands (including land and lagoons) is to change substantially under the new proposals pending before parliament. In accordance with the new proposal, the land rent will be charged as per a schedule attached to the law. 

According to the new proposal – land rent for islands (land and lagoons) within Noonu, Raa, Baa, Ari, Vaavu, Meemu, Faafu, Dhaalu atolls would be US$6 with a cap of US$750,000 for land area below 200,000sqm – US$1,125,000 for land area between 200,001 to 400,000 sqm, and US$1,500,000 for land area from 400,001sqm onwards.

As for islands within Thaa, Laamu, Gaafu Alif and Gaafu Dhaalu atolls, the land rent would be US$5 with a cap of US$750,000 if the land area is less than 200,000sqm.

Lease Period Extension 

One of the current conditions in asking for an extension of the current lease period by an additional 49 years is to ensure that the resort (to which the lease applies) is in operation (and not under development). However, this will no longer be a requirement if the new proposal is passed – any island at any stage would be able to ask for the forty-nine-year extension. 


Photo: Courtesy of Mihaaru