A newly ratified Foreign Direct Investment (FDI) law is set to transform the economic landscape of the Maldives, with officials and experts projecting a significant boost in investor confidence and economic development. The law, which prioritizes transparency and investor protection, marks a critical shift in the South Asian nation’s approach to foreign investments.
The FDI Act, signed into law by President Mohamed Muizzu, is designed to create a more secure and transparent environment for foreign investors, aligning the Maldives with global investment standards. The law, which comes into effect three months from its ratification, will apply to all foreign entities and individuals looking to establish long-term business operations in the country.
Minister of Economic Development and Trade Mohamed Saeed emphasized the law’s role in enhancing investor confidence, highlighting the government’s commitment to fostering a favorable investment climate. “The new FDI Act is a milestone in our economic development strategy, ensuring that investors have the transparency and protection needed to thrive in the Maldives,” Saeed stated.
The new legislation replaces the previous law, which had been in place since 1979. While the old law served the nation for decades, it was increasingly seen as outdated in the context of modern global investment dynamics. The updated FDI Act is expected to streamline the investment process, clearly outlining sectors open to foreign investment and setting forth robust guidelines for granting investment permissions.
Global investors have welcomed the news, particularly in China, where the law is seen as a catalyst for further investment in Maldivian infrastructure and other key sectors. Fang Qiuchen, chairman of the China International Contractors Association, expressed optimism during the recent Belt and Road Summit in Hong Kong. “This new law will undoubtedly increase global investor confidence in the Maldives, encouraging more companies to engage in long-term investments,” Fang remarked.
The Maldives has been a key partner in China’s Belt and Road Initiative, with significant infrastructure projects like the China-Maldives Friendship Bridge symbolizing the close ties between the two nations. Since its inauguration in 2018, the bridge has become a vital link for the Maldivian islands and a testament to the enduring partnership between the two countries.
Wang Lixin, China’s ambassador to the Maldives, underscored the positive impact of the bridge on the nation’s social and economic development, noting its transformative effect on local communities. “The China-Maldives Friendship Bridge stands as a powerful example of how international cooperation can bring tangible benefits to the people of the Maldives,” Wang stated.
Looking ahead, both Maldivian and Chinese officials anticipate that the new FDI law will pave the way for further collaborative projects, including the expansion of Velana International Airport. The airport, which serves as the main gateway to the Maldives, has already seen significant upgrades, thanks to a bilateral agreement signed in 2014.
As the Maldives positions itself as an attractive destination for foreign investment, the new FDI Act is expected to be a cornerstone of the nation’s economic strategy, driving growth and development in the years to come.
