The government has begun enforcing new foreign investment restrictions on businesses operating in the wholesale and retail trade and logistics sectors, following the expiry of a transition period on October 8.
In an announcement issued on Thursday, the Ministry of Economic Development, Transport and Trade confirmed that businesses with foreign shareholding will no longer be permitted to operate in the affected sectors unless they have completed the necessary compliance requirements under the Foreign Investment Entry Requirements (FIER).
The restrictions cover wholesale and retail businesses as well as logistics activities classified under the CSA, GSA and PSA categories.
The ministry warned that businesses continuing to operate in these sectors without meeting the applicable requirements after October 8 could be in violation of the Foreign Investment Act, Law No. 11/2024.
The announcement follows earlier notices issued on October 8, 2025, and September 23, 2026, informing affected businesses of the new requirements and the deadline for bringing their operations into compliance.
According to the ministry, several companies have already approached the government seeking to regularise their operations through local ownership arrangements, corporate restructuring or other measures permitted under the foreign investment framework.
Applications submitted by these businesses are currently under review.
Companies that formally engaged with the ministry before the deadline and initiated the necessary compliance procedures will be required to complete any outstanding steps within the timeframe specified by the authorities.
The ministry said it would continue working directly with these businesses to facilitate their transition and ensure they meet the requirements.
However, businesses that failed to submit a transition application or contact the ministry before October 8 will receive formal notices under the Foreign Investment Act.
Those companies will be instructed to take the necessary corrective measures within a specified period, including discontinuing activities that are no longer permitted under the foreign investment rules.
Failure to comply with the ministry’s instructions could result in enforcement action under Sections 23, 24 and 25 of the Foreign Investment Act.
The ministry also clarified that companies seeking to continue operating in the restricted sectors through the transfer of shares to Maldivian owners must demonstrate that the ownership changes are genuine.
Under the requirements, transferring shares to local shareholders will not automatically be sufficient to establish compliance.
Instead, businesses must provide evidence that the proposed restructuring results in meaningful Maldivian ownership and participation in the company’s operations.
The ministry said it would examine the substance of ownership transfers, including the extent of local shareholding, financial arrangements, beneficial ownership and the actual control exercised by the incoming Maldivian shareholders.
Companies may also be required to disclose details of the consideration paid for shares, the source of funds used in the transaction and any continuing financial or commercial interests retained by the foreign shareholders.
The role of the new Maldivian shareholders in managing and participating in the business will also be assessed.
The additional scrutiny is intended to prevent arrangements in which ownership is transferred to a Maldivian individual or company only on paper, while effective control remains with the previous foreign owners.
Detailed procedures and documentation requirements for such transfers will be announced separately.
The restrictions form part of the government’s implementation of the Foreign Investment Act, which establishes the legal framework governing foreign investment and the sectors in which overseas investors are permitted to operate.
The foreign investment framework seeks to regulate overseas participation in the Maldivian economy while establishing conditions for investment in different industries.
The wholesale and retail trade sectors are particularly significant to the domestic economy, encompassing businesses involved in importing, distributing and selling goods across the country.
The latest requirements could therefore have implications for companies with foreign shareholding that have traditionally operated in these activities, particularly those seeking to restructure their ownership to remain eligible.
The ministry stressed that the end of the transition period marks the beginning of the compliance and enforcement process, meaning companies that remain in breach of the requirements may face action regardless of whether they previously engaged with the authorities.
At the same time, the government said it remains committed to ensuring an orderly transition and providing affected businesses with guidance on the steps necessary to meet the new rules.
Businesses that have not yet contacted the ministry have been urged to do so without delay.
Further clarification and assistance can be obtained through the ministry’s Foreign Investment Unit under Invest Maldives.
The announcement signals a new phase in the implementation of the country’s foreign investment regulations, with authorities moving from the transition period to active compliance monitoring and enforcement across the affected sectors.
