The government has cancelled 29 foreign investments operating in business sectors now reserved for Maldivian nationals, as authorities move to enforce restrictions introduced under the country’s revised foreign investment framework.
Minister of Economic Development, Transport and Trade Mohamed Saeed disclosed the figures during a press conference at the President’s Office, revealing that 150 foreign investments had been identified as requiring compliance with the new regulations.
Of these, 29 have so far been cancelled, while another 17 foreign-invested businesses have approached the government with proposals to restructure their operations and meet the revised requirements.
The restrictions primarily target wholesale and retail trade, logistics and airline sales agency services, which the government has designated for Maldivian businesses.
Under the new framework, foreign investors are prohibited from operating in certain sectors, including acting as General Sales Agents (GSA), Passenger Sales Agents (PSA) and Cargo Sales Agents (CSA) for airlines serving the Maldives.
Saeed said the changes are intended to create greater opportunities for local entrepreneurs by ensuring that businesses operating in sectors where Maldivians already possess sufficient expertise and investment capacity remain under genuine local ownership.
However, the minister stressed that foreign businesses seeking to continue operating through the transfer of shares to Maldivians will face strict scrutiny.
He revealed that 17 businesses involved in wholesale and retail activities have expressed interest in transferring their ownership to Maldivian shareholders to comply with the regulations.
Saeed warned that simply placing shares under the names of Maldivian citizens would not be sufficient to satisfy the government’s requirements.
Instead, businesses must demonstrate that ownership and control have genuinely transferred to Maldivians, rather than using local shareholders as nominal representatives while foreign investors continue to manage the operations.
The minister said the process would involve extensive legal and administrative checks, including notarised ownership documents and assessments carried out with relevant professionals.
Authorities will examine whether the proposed arrangements reflect genuine Maldivian participation in the businesses.
The requirements form part of the government’s wider efforts to prevent foreign investors from bypassing restrictions through ownership structures that appear locally controlled on paper but remain under foreign influence in practice.
The revised framework follows the Foreign Investment Act, which was ratified in September 2024 and established a new legal basis for regulating foreign investment in the Maldives.
Subsequent Foreign Investment Entry Requirements introduced restrictions and minimum investment thresholds across a range of sectors.
Existing foreign-invested businesses affected by the changes were provided with a transitional period to restructure their operations, transfer ownership where permitted or withdraw from activities no longer open to foreign participation.
The transition deadline for wholesale and retail trade and specified airline sales agency activities expired on October 8, 2026.
Businesses that have already approached the ministry and initiated compliance procedures are being given an opportunity to complete the necessary arrangements within timelines determined by the authorities.
However, companies that have failed to engage with the ministry or continue operating in restricted sectors without meeting the requirements may face enforcement action under the Foreign Investment Act.
The ministry has also indicated that businesses seeking to transfer shares to Maldivians will be required to provide evidence of genuine local ownership.
This may include information about the source of funds used in the transaction, payment arrangements, beneficial ownership and the individuals who ultimately exercise control over the business.
Authorities may also examine whether the original foreign shareholders retain financial interests, management powers or other rights that could undermine the intended transfer of ownership.
Beyond wholesale and retail trade, the government’s revised foreign investment policy covers several other sectors where officials believe Maldivian businesses have the capacity to operate and expand.
These include public maritime transport, bunkering services, construction projects valued below USD 15 million and certain real estate developments below USD 100 million.
Residential real estate projects below the USD 100 million threshold and general sea transport services have also been identified among activities reserved for Maldivian participation.
Other sectors, including auditing and information technology, are subject to specific investment conditions, with certain arrangements requiring at least 25 percent Maldivian shareholding.
The restrictions and thresholds vary by business activity, with some sectors closed to foreign investment and others allowing participation through qualifying joint ventures or local ownership arrangements.
According to the ministry, the policy is intended to balance the protection of domestic business opportunities with the continued attraction of foreign investment into industries that require additional capital, specialist knowledge or international expertise.
Officials have also maintained that the transition arrangements are designed to avoid imposing unnecessary financial losses on existing investors by allowing affected businesses time to adjust.
The latest cancellations represent one of the more significant enforcement developments since the revised foreign investment rules were introduced.
With 150 investments originally identified as requiring compliance, the government is continuing to assess the remaining businesses and determine whether their operations meet the new requirements.
Saeed reiterated that the administration’s priority is to ensure that economic opportunities in sectors reserved for Maldivians genuinely benefit local businesses, rather than allowing foreign investors to retain control through nominal ownership changes.
