President Dr. Mohamed Muizzu has officially ratified the Foreign Currency Bill, a significant legislative measure passed during the 60th session of the People’s Majlis on Thursday, December 12, 2024. This bill is designed to establish a comprehensive legal framework to govern transactions conducted in foreign currency within the Maldives. It outlines regulations for the import and export of foreign currency, as well as its handling, depositing, and exchange within the country. Furthermore, it sets forth principles and rules for other foreign currency transactions.
The legislation prohibits any monetary obligation or transaction in the Maldives from being made or fulfilled in any currency other than the Maldivian currency, except under specific conditions outlined in the bill. It also asserts that Maldivians cannot be compelled to pay for goods and services purchased domestically using foreign currency.
According to this bill, entities operating within the tourism sector and those earning foreign currency income from sales or services totaling at least $15 million USD annually must register with the Maldives Monetary Authority (MMA) within designated timeframes. These entities are required to transfer their foreign currency income into a bank account established in the Maldives.
Moreover, the bill stipulates that entities receiving foreign currency income must adhere to three specified categories, requiring them to convert a portion of their income and mandating that banks sell a certain percentage of this foreign currency to the MMA within a set period:
- Tourism establishments classified under Category-A in the Maldives, such as tourist resorts, integrated tourist resorts, private islands, resort hotels, and similar facilities, are required to convert either $500 per arriving tourist each month or 20% of their monthly gross foreign currency sales, based on their preference.
- Category-B Tourism Establishments, which include tourist vessels, hotels, and guesthouses, must convert either $25 per tourist arriving at their facility each month or 20% of their gross foreign currency sales for that month, according to their choice.
- Entities outside of Category-A and Category-B that have accrued a minimum of $15 million USD or its equivalent in foreign currency from sales or services in the preceding year are mandated to convert 20% of their monthly foreign currency income from these activities into Rufiyaa through a bank.
The enforcement and implementation of this law will be overseen by the Maldives Monetary Authority, which is tasked with formulating necessary regulations within two months of the law’s enactment. Following its ratification by the President, the Foreign Currency Bill has been published in the Government Gazette and is set to come into effect on January 1, 2025.
