Maldives Introduces Key Changes to Tourism Act in 15th Amendment

On 19 March 2025, the Government of Maldives ratified the 15th Amendment to the Maldives Tourism Act, bringing in crucial changes. These revisions are designed to streamline resort lease extensions, improve compliance, regulate advertising, and formalise redevelopment processes. Below are the key updates and their implications.

Lease Extension Changes

The 15th Amendment has extended the window for resorts to apply for reduced lease extension fees. Previously set to close on 28 February 2025, the new deadline is now 18 September 2025.

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Leaseholders now have multiple payment options for extending their resort leases:

Up to 50 years: USD 100,000 per year for lump sum payments within the new window, or USD 200,000 per year for payments made after this window.
From 50 to 70 years: USD 2.5 million lump sum if paid within the new window.
From 50 to 75 years: USD 3 million lump sum if paid within the new window.
From 50 to 99 years: USD 5 million lump sum if paid within the new window, or USD 5.5 million in instalments over 12 months, or USD 6 million in instalments over 24 months. Payments made after the window closes will require a lump sum of USD 10 million.

Notably, extensions paid in instalments will only take effect once the full amount is settled. If payment deadlines are missed, the application will be cancelled, and any previously paid amounts will not be refunded, though they may be credited against future lease rent.

Compliance Code Requirements

Tourism establishments are now required to develop a Compliance Code that outlines safety and operational standards across their services. The deadline to submit these codes is 18 March 2026. The Ministry of Tourism is tasked with setting minimum standards that must be met in these codes.

New Advertising Rules

For the first time, the 15th Amendment introduces advertising regulations for tourism properties. Establishments must now adhere to the following rules:

Properties can only be marketed as the type of facility stated in their registration or operating licence.
Establishments classified by the Ministry under specific categories must adhere to their designated category in advertisements.
Tourism properties must ensure accuracy in descriptions of services, surroundings, and facilities.

Properties still under development must obtain approval from the Ministry before launching advertisements.

Redevelopment and Closure Rules

The 15th Amendment now includes clear guidelines for temporarily closing tourism establishments for redevelopment. Leaseholders must formally request an amendment to their lease for this purpose. If redevelopment is not completed within the approved timeframe, the Ministry has the discretion to terminate the lease agreement without compensation.

New Tourism Trust Fund

The 15th Amendment also formalises the creation of a Tourism Trust Fund, replacing the earlier fund under the Public Finance Act. This newly established fund will follow defined rules for management, expenditure, and investment.

Local Council Powers

Under the amendment, local councils may allocate land within their jurisdiction for tourist hotels and guesthouses in their Land Use Plans. However, uninhabited islands and lagoons can only be designated for tourism development by the President.

Updated Definitions

The 15th Amendment updates key definitions:

The term “Hotel” has been replaced with “Tourist Hotel,” which excludes resorts, resort hotels, and guesthouses.
The definition of “Tourist Guesthouse” has been revised to confirm that such properties can be developed on land leased by local councils.

Next Steps for Tourism Operators

The Ministry of Tourism has until 18 June 2025 to introduce the necessary regulations to implement these changes. With the 15th Amendment now in effect, tourism operators must familiarise themselves with the updated rules to avoid penalties and ensure compliance. From adjusted lease extension fees to stricter advertising requirements, these changes aim to improve transparency and accountability in the Maldives’ vital tourism sector.