Foreign-Owned Retailers and Sales Agents Face Enforcement as Transition Ends

Foreign-owned businesses in wholesale and retail trade, and those working as cargo, general or passenger sales agents, may no longer operate in those sectors unless they meet the Maldives’ revised foreign investment rules. Their one-year transition period ended on 8 October.

The Ministry of Economic Development, Transport and Trade said in an announcement dated 8 October that any activity in these sectors after that date, without meeting the applicable requirements, may breach the Foreign Investment Act (Law No. 11/2024).

The ministry said the end of the transition period “marks the commencement of the applicable compliance and enforcement process”.

Notices for Firms That Did Not Engage

The ministry said it had received applications from a number of businesses seeking to regularise their operations through localisation, restructuring or other measures. Those applications are under review.

Companies that have formally engaged with the ministry must complete their outstanding requirements within the timeframe it sets and follow its directions.

Companies that had not submitted a transition application or engaged with the ministry by 8 October will receive formal notices under the Act. Each notice will set a period for the company to take the necessary steps, including stopping activities that are not permitted where required.

According to the announcement, failure to comply may be a contravention under section 23 of the Act and may lead to enforcement action under sections 24 and 25. Companies that remain non-compliant may face enforcement whether or not they previously engaged with the ministry.

Checks on Transfers to Maldivians

Businesses that want to stay in these sectors by transferring ownership to Maldivians must show that the transfer results in “meaningful and substantive local ownership” and participation in the business.

On top of the standard share-transfer requirements, the ministry may examine:

• the nature and extent of the ownership transfer
• the price paid and payment arrangements
• the source of funds and financing
• beneficial ownership and effective control
• any continuing rights or interests of the foreign seller or a related party
• the role of the incoming Maldivian shareholders

The ministry said the assessment is meant to ensure a substantive transfer “rather than a nominal or formal change in shareholding”. It said detailed requirements and procedures for these share transfers would be issued separately.

Eight Companies Named in September

On 23 September, the ministry issued a notice reminding companies of the deadline. It said it had contacted affected businesses by email and telephone, and that a number had begun the transition process.

The notice named eight companies with listed wholesale, retail or sales-agent business objectives that the ministry said it had been unable to contact. Their registration numbers date from 1985 to 2000.

How the Rules Began

The Foreign Investment Act was ratified on 3 September 2024. The ministry issued the revised Foreign Investment Entry Requirements on 8 October 2025, which list general retail trade, including online trading, as closed to new foreign investment.

The transition framework gave existing wholesale and retail businesses a maximum of one year, with no new outlets or expansion during that period. Cargo, general and passenger sales agents also received one year. Longer periods of up to seven years apply to sea transport, domestic logistics and businesses with substantial investments, depending on the amount invested.

The 8 October announcement directs affected companies to Invest Maldives’ Foreign Investment Unit, which can be reached at fiu@trade.gov.mv or on 3333181 and 3333182.