Maldives Fact Sheet & Investment Projects The Republic of Maldives has approximately 1,192 inhabited and uninhabited islands, an area of 90,000 square kilometers in the Indian Ocean. Famous for its natural beauty with white sand beaches and crystal-clear waters, the Maldives is ranked as one of the best diving destinations in the world. High-end tourism has propelled the economy's substantial expansion over recent decades and enabled the Maldives to gain middle-income status. According to World Travel & Tourism Council, the direct and total contribution of Travel and Tourism to the Maldives Gross Domestic Product (GDP) was 52.4% and 96.5% of the total GDP in last five years, respectively; thus, making tourism the critical industry for the economy. The Ministry of Tourism plays a vital role in shaping the tourism landscape in the Maldives. Boosting tourism arrival, the government has planned to expand the country's main gateway airport in Malé and to build new airport around the islands. His Excellency Ibrahim Mohamed Solih is the 7th President of the Republic of Maldives The Republic of the Maldives is a sovereign archipelagic nation positioned in the Indian Ocean. Notably, the South Asian Island nation has no counterpart in the entire world in terms of its unique geography and topography. Maldives, the sunny side of life is blessed with magical and breathtaking displays of sunshine for the better part of a year. Similar to tropical countries, the Maldives enjoys a dry and wet season. Conveniently, the hot and humid weather is complemented with cooling sea breezes and periodic rain.
Facts & Figures
Capital Malé Official languages English · Dhivehi Ethnic groups (2019) ≈100% Maldiviansa Religion Islam (mandated by law) Demonym(s) Maldivian Government Unitary presidential republic • President Ibrahim Mohamed Solih • Vice President Faisal Naseem • Speaker of the Majlis Mohamed Nasheed • Chief Justice Ahmed Abdulla Didi • Legislature People's Majlis • Independence from UK 26 July 1965 • Current constitution 7 August 2008 Area • Total 298 km2 (115 sqm) (187th) Population • 2016 estimate 427,756 (175th) • Density 1,102.5/km2 GDP (PPP) 2018 estimate • Total $7.396 billion (162nd) • Per capita $20,228 (69th) GDP (nominal) 2018 estimate • Total $4.825 billion • Per capita $13,196 Currency Maldivian rufiyaa (MVR) Time zone UTC+5 (Maldives Time) Date format dd/mm/yy Driving side left Calling code +960 ISO 3166 code MV Internet TLD .mv ECONOMIC OUTLOOK In 2015, growth in Maldives' GDP came mainly from substantial public and private foreign investment, which doubled growth in the construction sector to 40%. According to the Asian Development Bank, the Maldivian government planned for a growth of 140% to 9.1 billion rufiyaa's (almost 60 million USD) in 2016 in its public sector investment program (fueling construction and real estate development). The government also plans to scale up investment in public infrastructure particularly related to trading and industrial ports and the country's international airport; This would have transformational implications for the Maldives with the ability to change it from a niche luxury market to a broader, more diverse market.
ACCESSIBILITY International Visitor Arrivals The Maldives benefits from steady Leisure demand for hotel and resort accommodation throughout the year. Total international passengers arriving in Ibrahim Nassir International Airport has steadily grown from 2010 to 2015 with a CAGR of 9.3%. According to statistics by the Ministry of Tourism, the total international arrivals to the Maldives were approximately 1.3 million in 2015. However, the rate of growth in 2018 was increased by 7% only. Despite the slower growth, given the government's efforts to maintain the Island’s attractiveness as a destination, it is expected that the performance will potentially recover in the mid to long term.
Tourism Target 2019: Visit the Maldives Year 2019 campaign is expected to achieve 1.6 million tourist arrivals. As of April 2019, Maldives managed to attain approximately 30% of the target.
TOURISM INDUSTRY Ibrahim Nassir International Airport, the international airport of Maldives in Malé, is well connected to key global markets in the world. British Airways, China Eastern Airlines, Emirates and Korean Air amongst others fly daily to and from this airport. Recently, Maldives has been directly connected with Sri Lanka by SriLankan Airlines. At its current capacity, the airport can handle approximately 2.3 million passengers annually. Chinese state-owned enterprises have seen higher contribution to investments across the country. In December 2015, Maldives and China signed an agreement for a US$373 million loan for the development of a new runway at Ibrahim Nasir International Airport. Upon completion of the US$800 million airports, the capacity will increase to 8.5 million passengers a year. Connectivity to resort destinations is generally by chartered seaplanes, speed boats or airport ferries. Hotel operators are also investing in their airplanes to fly their guests around the Maldives. Tourist arrivals to the Maldives recorded monthly averages of a little over 103,000 from 2012 until 2018, reaching an all-time high of 144,000 in February of 2018. At the end of September 2018, the Maldives has seen an 8.3 percent increase in tourist arrivals, comparative to the same period in 2017 and every year. SOURCE MARKETS Huge demand for tourism in the Maldives is mainly dependent on international travels. The Chinese are an essential demand segment, which made up 29% of all international arrivals in 2018 and have maintained their top position as a source market over the last five years. However, despite being the high source market for the Maldives, there has been a decline in numbers from approximately 364,000 Chinese travelers in 2017 to 360,000 in 2018 with an increase in the European source markets to balance. The top three international source markets in 2018 remained consistent with 2017 rankings; China, Germany and United Kingdom contributed 29%, 9%, and 8%, respectively to the total international arrivals to the Maldives. Post the weakening of the Rouble, the Russian market, which contributed to 5% of total visitors in 2018, declined significantly and was surpassed by travelers from Italy and India.
RESORT MARKET & PERFORMANCE Resort Market & Performance According to the Ministry of Tourism (MOT), the number of luxury and upscale resorts in the Maldives has remained relatively stable over the past few years. A total of 11 upscale and luxury resorts, comprising 3,330 rooms are planned for construction by 2018. This new pipeline will increase places supply to 21,668. Therefore 28 new resorts have been constructed over the last two years of 2016-2019. The International Leisure segment has predominantly driven tourism in the Maldives. However, many resorts suffered from the weakening of the global economy, especially in 2015 as the island nation had previously relied heavily on feeder markets from Russia and China. Due to the weakening of the Russian Rouble and the Chinese Yuan, the market-wide average daily rate (ADR) and occupancy (OCC) were lower as compared to other regional cities. With both essential markets facing an uncertain economic situation, resorts have yet to see an improvement in performance this next two years.
HOSPITALITY TRANSACTIONS Since 2013, funds from Singapore have accounted for 73% of all transaction volume in this market. The next most significant sources of funds are from Thailand and the United States. The largest transaction in the past five years was the sale of Angsana Velavaru in 2013 for approximately US$71 million. Other notable investment transactions include the Jumeirah Dhevanafushi and Six Senses Laamu, investments coming mainly from Arab Emirates. Sale of the Cheval Blanc to Royal Abu Dhabi family next to Coral Island. Primary Category New investors: Middle East/Africa Investors Secondary Categories: Financing, News, Ownership
ABU DHABI, United Arab Emirates—The Middle East and Indian Ocean are seeing healthy investment numbers overall, but a closer look at investment in the region reveals most of the money is finding its way to one or two large deals, according to speakers at the recent Gulf & Indian Ocean Hotel Investors’ Summit. “In the Indian Ocean, we’ve seen $300 million worth of transactions in 2017, an increase of 65% over the previous year, but that is mostly down to the purchase of one resort in The Maldives,” said Nihat Ercan, managing director of investment sales, Asia, at JLL Hotels & Hospitality Group. That impressive deal was the $200 million sale, to an undisclosed owner, of the Cheval Blanc Randheli next to CORAL ISLAND FOR SALE Ercan said. The price per key was approximately $5 million for that property, which has an average daily rate of approximately $1,700. “Over the last six years, 34% of transactions (across the Indian Ocean) have been institutional in nature. This bodes well for liquidity,” Ercan said. Ercan added The Maldives has become especially investor- friendly, but that is not necessarily the situation across the region. The growing interest in hospitality assets in the Maldives from global institutional investors has been able to keep the investment market in the nation very healthy in the next decade. TOURISM SUSTAINABILITY The Maldives tourism industry flourishes in a delicate environmental balance, and its further evolution is vulnerable to external challenges. Efforts and policies have been made and need to be augmented to ensure long-term tourism sustainability in economic, environmental, legislative, and social aspects. The government is also scaling up infrastructure investment such as the expansion of the country's international airport and other smaller domestic airports located in the southern region of Maldives, new airport has been built Maafaru Airport next to Coral Island. This is expected to boost tourism capacity in the Maldives and allow opportunities for the emergence of different tourism products such as new types of attractions, resorts, trading and agriculture etc. As a result, tourism growth is expected to be sustained as the Maldives diversifies its tourism offerings and attracts new markets into the country.
SUSTAINING INVESTMENT INTEREST IN THE MALDIVES Investment interest is expected to grow as the Maldives becomes a more sustainable destination. Since 2014, Maldives has seen a handful of foreign direct investments in the tourism sector. In July 2014, the Maldivian government and Dutch Docklands Maldives undertook the Five Lagoons Development together. The project involves the construction of five humanmade floating lagoons on 8 million square meters of water with US$10 million worth of villas, a free 18-hole golf course, a conference complex and four individual ring-shaped floating islands that will each house water villas, a marina, restaurants, bars and retail shops. In June 2015, China-based Guangdong Beta Ocean Limited was the first to develop a five-star resort with 71 rooms on V. Kunaavashi Island in a joint venture with a Maldivian Company. The Maldives is also much sought after by many hotel companies for establishing international brand presence; additionally, it offers attractive returns on investment. Year (2016), both Melia Hotels International and The Oberoi Group have announced plans to open their first resort in the Maldives within the next few years.
To sustain the interest of foreign investors, government policies have been improved to guarantee the security of these investments by ensuring the following (according to the Ministry of Economic Development and Tourism):
• No foreign exchange restriction • No restrictions on the repatriation of earnings and or profits • No ownership restrictions and freedom to operate as wholly-owned foreign investment if desired • 100% duty free for the construction imports • Extension of long-term land leases (up to an additional 21 or 50 years) depending on the scale of the investment • Provision for overseas such as British Law arbitration of disputes • Legally backed investment guarantee PROCEDURE FOR FOREIGN INVESTMENTS Foreign investments in the Maldives have primarily involved resort management, but also include telecommunications, accounting, banking, insurance, air transport, real estate, courier services, and some manufacturing.
The government encourages investment projects that:
The Land Act allows foreigners to lease land on • Establish and enhance the delivery of essential services required inhabited islands for up to a maximum of 50 years, but there is no formal process for registration of leasehold to be provided by the state titles. The Uninhabited Land Act allows foreigners to lease land on uninhabited islands for purposes other than • Promote economic diversificationand demonstrate potential to tourism for a maximum of 21 years for investments structurally reduce the country’s current dependence on the amounting to less than USD1 million and up to a maximum of 50 years for investments over USD10 million. tourism sector The Ministry of Tourism develops regulations relevant to the tourism sector. Specific business sectors require sector- • Expand the export base of the economy and support import level operating licenses from other ministries/agencies substitution; including fisheries and agriculture, banking and finance, health, tourism, transport, construction, and education. A • Enhance human capital development and employment subsequent 2014 amendment allows the extension of resort leases up to 99 years for a payment of USD 5 million. opportunities for Maldivian's The changes aim to incentivize investors, make it easier to • Promote innovative product development and new markets for obtain financing from international institutions and increase revenue for the government. Leases can be the tourism sector renewed at the end of their terms, but the formula for assessing compensation value of a resort at the end of a • Bring enhanced improvements to the health and education contract has not been developed. For now, its renewed sectors in terms of service delivery, quality, and accessibility automatically same terms. The approval procedure for foreign investments is as • Expand and develop sports infrastructure and services in the follows:
Maldives • Submit a completed Foreign Investment Application form • Promote the use of renewable energy in the Maldives to the Ministry of Economic Development - The Foreign Investment Application Form is available from • Promote incremental social and economic benefits from the the Ministry’s website; www.trade.gov.mv.Walk-in consultations are available for foreign investors who may available natural resources. wish to discuss their proposals before applying. • Receive approval - The standard processing time is three working days, and however, if relevant ministries must be consulted, the approval may take 10-14 days. • Register a business vehicle - Once approval is received, an investor must register as a company, partnership, or a company which has been incorporated in another jurisdiction. Application forms for registering as a legal vehicle are available from the ministry’s website. • Sign the Foreign Investment Agreement with the Ministry of Economic Development - This Agreement outlines the terms and conditions related to carrying out the specific business in the Maldives. For tourism sector investments, a Foreign Investment Agreement is not required as the land lease signed with the Ministry of Tourism governs all matters relating to tourism businesses in the Maldives. • Obtain licenses and permits - Sectors which require operating licenses include fisheries and agriculture, banking and finance, health, tourism, transport, construction, and education. TAX AVOIDANCE TREATY The Maldives signed a Double Tax Avoidance Treaty with the United Arab Emirates in October 2017, which had not come into force as of April 2018. In April 2016, LEGAL SYSTEM & JUDICIAL INDEPENDENCE Maldives and India signed an agreement to avoid The sources of Law in the Maldives are its double taxation of income derived from air transport constitution, Islamic Sharia law, regulations, and an agreement to share information on taxes, both presidential decrees, International Law, and English of which are currently in force. In 2005 Maldives signed Common Law, with the latter being most influential a double taxation avoidance treaty which is a limited in commercial matters. The Maldives has a multilateral agreement between members of the South Contract Law (Law No. 4/91) that codifies English Asian Association for Regional Cooperation (SAARC) for standard law practices on contracts. the avoidance of double taxation and mutual assistance Foreign parties can invest in the Maldives through in tax matters. The Maldives currently does not have the Foreign Investment Law or the Special personal income taxes, although bank profits and Economic Zones (SEZ) Act. Details are available on business profits are taxed and there is a goods and the Ministry of Economic Development’s Doing services tax on the tourism sector and a general goods Business in the Maldives Guide: and services tax. Under the Business Profit Tax Act, a http://mif.mv/manage/xpdf/dbg-2017-web.pdf non-resident owner or charterer of a ship or aircraft Foreign investment in the Maldives is governed by may be exempt from the fee if the commissioner Law, covering agreements between the general of taxation of Maldives is satisfied that the government and investors. taxpayer’s country of residence grants a reciprocal The Business Registration Act (18/2014) requires treatment for business profit tax or any other similar foreign businesses to register as a company or charge to a Maldivian-resident taxpayer. The Maldives partnership. The Companies Act governs the signed its first bilateral free trade agreement with China registration as well as the regulatory and in December 2017. However, the contents of the operational requirements for public and private Agreement have not been made public as of April 2018. companies. The Partnership Act of 2011 regulates The government is currently engaged in negotiations to the formation and regulation of partnerships. establish another free trade agreement with Hong Foreign investments are currently approved for an Kong. The Maldives and the United Arab Emirates initial period of five years, with the option to signed an Agreement on the Promotion and Reciprocal renew. Protection of Investments in October 2017. CORAL ISLAND BEST VALUED ISLAND ON THE MARKET EXCELLENT HIDEAWAY FOR NATURE LOVERS Coral island is located in the prestigious Noonu Atoll, which is home to some of the most exclusive resorts in the Republic of Maldives, features beautiful coral reef and pristine white sand beaches. The Island's natural beauty is yet untouched which allows the new owner to create an island of their dreams. This enticing Island features a substantial white sand beach that encircles the entire Island, offering a variety of locations to enjoy the solitude of the atoll, ocean breezes, swaying palm leaves, and breathtaking views of the endless azure sea that at times turns a magnificent shade of purple. This blank canvas is a unique hideaway for nature lovers and an ideal location to create your dream island retreat, whether that means an ultra- luxurious private home, boutique island vacation property or possible resort. The potential is immense and inspiring... The Island is located in a few minutes from the best five-star Maldivian hotels Vella and Cheval Blanc. Eighteen hectares size will enable you to easily create a private island of your dreams, where you will build a luxury any size private villa, guest and staff houses, a football or a golf course, on-site restaurant and spa, a garden with fruits, a large harbor for ships. Eight minutes by boat from the most expensive hotels Velaa and Cheval Blanc (owned by Abu Dhabi royal family) and near the second international airport of Maldives opened in 2018. This Island is a virgin Island.
By Speed boat only minutes from the second international airport By Speed boat From Male 1 hour 40 minutes By Plane From Male 35 minutes from Male By Yacht 2,5 hours from Male CRYSTAL ISLAND COCONUT PALMS, COMPACT PARADISE EXCELLENT HIDEAWAY FOR NATURE LOVERS This is barefoot luxury in a setting that's about as exclusive as it gets, This is probably the most reclusive Island escape out there – and yet also the most indulgent, too. A place where it feels like you're the only people on the planet, CRYSTAL is a 42-hectare island, comparable to the size of 60 football fields. Located in 5 minutes from 5 star St.Regis hotel opened in 2016. At your disposal are crystal clear lagoon 1,700 meters long, white sandy beaches and a world of coconut palms. This palm Paradise is surrounded by a natural lagoon, which can be served as parking for yachts: yours and your guests. While diving, you can enjoy the fantastic coral reefs and the wealth of the underwater world! You can build any size residence, guest villas, and houses for staff. "CRYSTAL" is a considerable virgin 42- hectare island, which is comparable to 60 football fields — located in 5 minutes from 5 star St.Regis and Jumeirah Dhevanafushi hotels. At your disposal are crystal clear lagoon 1,700 meters long, white sandy beaches and a world of coconut palms. You can build any size private residence, guest villas, and houses for staff.
Domestic flight, 1 hour from Male By yacht, 6 hours from Male Included Plans and Approvals for Crystal Island agriculture & resort purpose: 1. Building / Development permission from the Ministry obtained and does not expire for 40,000 livable square meters to be build; 2. Biometric study and land survey of the island (value of $40,000 USD) obtained; 3. House plans and master plan of the island (value of $66, 000 USD) obtained; 4. Full Environmental Assessment report, including infrastructure (value of $19,500 USD) obtained; 5. Permission to dredge and construct harbor and jetty with possible options (value of $4,500 USD) obtained; 6. Opened bank accounts each company as owner of each Island; 7. Quota for visas to bring in foreign workers; (Crystal & Shell are connected by a widest & most desirable Lagoon) SHELL ISLAND JUST A WALK FROM CRYSTAL NO LIMITS, UNDOUBTEDLY A PARADISE FOR DIVERS AND SNORKELERS The Island offers a wide range of undersea sites. The Ocean that surrounds can reach a depth of 4000 meters. Outside of edges, reefs rapidly fall to abysses and can give vertigo to the most experimented diver. On the other side, inside reefs offer ideal conditions, reaching an average of 50 meters depth. In Maldives, a few minutes of boat transfer are sometimes enough to bring you to the most exciting and rich diving sites. Each Island is owned by a different corporation. There is a 21-year lease (with 16 years left as of 2019) to each island and auto renew option as long as maintenance and taxes are paid to Maldives, see Investment options to increase the lease to a 50 or 99 years lease. Government, Maafaru New Airport have been built and been operating since 2018
High End resorts within Area: ▪ W Maldives ▪ Four Seasons ▪ Constance Resort ▪ Nika Island Resort ▪ Jumeira Vittaveli ▪ Fairmont ▪ Vellaa Private OWNERSHIP USE OF ISLANDS All Three islands are located in the most prestigious lagoons in the Maldives. (SALE OF RIGHTS TO USE EACH INDIVIDUAL COMPANY) CRYSTAL 42-hectare island is 9.650.000 € CORAL 18-hectare island is 5.600.000 € SHELL 16 hectare is $7.000.000 € Company: (when sold, all assets and belongings to the company – title for the company is transferred to a new ownership)
18-hectare Coral island: Owner: Elephant farm Pvt Limited company 42-hectare Crystal island Owner: Five-star Maldives Pvt Ltd 16 acres Shell Island Lagoon Owner: Sunny Farm Pvt Ltd