Ownership and Investment in the Maldives

Maldives, property ownership laws present a unique landscape, especially for foreign investors.

 

Ownership for Maldivian Citizens: Maldivian citizens have the right to freehold ownership of land. This means they can own the land outright with full rights for an indefinite period.
The Maldivian Land Act (Act No. 1 of 2002) governs the allocation, ownership, sale, transfer, and lease of land in the Maldives.
Citizens can be allocated government plots for residential purposes and can purchase these plots after a certain period. Inheritance laws dictate how property is divided among heirs.

Ownership for Foreigners:

The Maldivian Constitution prohibits foreigners from owning land on a freehold basis. Land ownership is exclusively reserved for Maldivian citizens.

Foreigners can primarily engage in property ownership through leasehold agreements.

Leasehold tenures for foreigners can extend up to 99 years, especially for tourism-related ventures or commercial developments.

Foreigners can lease entire islands or parts of islands for tourism development, such as resorts.

Investment in leasehold properties is often tied to tourism or commercial projects rather than private residential ownership.

Government approval is required for all property-related transactions involving foreigners, regulated by the Maldives Investment Act. Most foreign property investment opportunities are located within tourism-designated zones. Private ownership in residential areas is rare for foreigners.

Foreigners can invest in resort villas and overwater bungalows through long-term leases. Some resorts operate on a "leaseback" model where investors receive rental income when they are not using the property.

Strata leases are also available, allowing foreigners to own a part of a building, like a villa or room within a resort, for a specific lease period.

Key Regulations and Considerations for Foreign Investors in the Maldives:

 

No Freehold Ownership: Foreigners cannot own land outright.

Leasehold Agreements: The primary mode of property engagement for foreigners, typically for tourism or commercial purposes, with terms up to 99 years.

Government Approval: All transactions involving foreign entities require government authorization.

Tourism Focus: Investment opportunities are heavily concentrated in the tourism sector and designated zones.

Local Partnership: Partnering with a local Maldivian business or consultant can be beneficial for navigating regulations.

Legal Advice: Seeking professional legal advice with expertise in Maldivian real estate law is crucial.

Due Diligence: Thoroughly investigating lease terms and property details is essential before investing.

In summary, while direct freehold property ownership is not an option for foreigners in the Maldives, significant investment opportunities exist through long-term lease agreements, particularly in the thriving tourism sector. The legal framework prioritizes land ownership for Maldivian citizens while facilitating foreign investment in specific areas crucial for the nation's economy.