Business Environment

flag Maldives Maldives: Business Environment

In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices


Accounting Rules

Tax Year
The taxable period coincides with the Gregorian calendar year (1 Jan-31 Dec).
Accounting Standards
Companies registered under the Companies Act No 10 of 1996 are required to follow international accounting standards in the preparation and presentation of their statutory financial statements. In practice, this is interpreted to include both full IFRS Standards and the IFRS for SMEs Standard.
IFRS Standards are required for all listed companies and financial institutions.
Accounting Regulation Bodies
Maldives Inland Revenue Authority (MIRA)
Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)
Accounting Reports
According to the Companies Act No 10 of 1996, the Board of Directors shall prepare the accounts to be submitted to the annual general meeting, showing the income and expenses, profit and loss, the annual balance sheet and annual report. The annual report shall include the following:
(1) A review of the business and other activities of the company during the past year
(2) The amount which the Board of Directors recommend should be paid as dividends and the amount they propose to set aside as reserves
(3) Names of the directors of the company and details of the members of the company in the past year
(4) The main activities carried out by the company in the past year.
Publication Requirements
According to the Company Act of the Maldives, all registered companies are required to submit annual financial statements, director’s reports, and auditor’s reports of the previous year to the registrar of companies.
Professional Accountancy Bodies
Institute of Chartered Accountants of the Maldives
Certification and Auditing
Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
Auditor General's Office.
Accounting News

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Tax Rates

Consumption Taxes

Nature of the Tax
Goods and Services Tax (GST)
Tax Rate
6% (standard rate) - 8% as of 2023
12% (tourism sector) - 16% as of 2023
Reduced Tax Rate
Zero-rated goods and services include rice, sugar, flour, salt, milk, cooking oil, eggs, tea leaves, deep sea fish, reef fish, all types of fish packed in the Maldives, and rihaakuru (fish paste), vegetables such as potatoes, onions, carrots, cabbage, beans and tomatoes, ingredients used in making curry paste (cumin, fennel, coriander, turmeric, garlic, ginger, chilli, chilli powder, cinnamon, cardamom, peppercorn, any other such ingredient), dhiyaahakuru, coconuts (kaashi, kurun’ba, kurolhi), carrots, cabbage, beans and tomatoes among vegetables, all kinds of fruits, bread, buns and faaroshi (rusk), baby and adult diapers, baby food, cooking gas, diesel, petrol.

Some items are exempt, including electricity service, water facilities, postal service (not including courier services), sewerage facilities, education, health services, medical devices and drugs, financial services, rent earned from the lease of immovable property, international transportation services, payments collected as fines, daycare services; flats, land and buildings sold by the Government or by the Government through a third party under social housing schemes in which the Government has the discretion to control the price of the property being sold.

Other Consumption Taxes
Customs duties are levied at rates varying between 0% and 100% of the value of goods). Certain goods can be imported duty-free after receiving an authorisation from the respective Ministry or Authority responsible for granting the duty exemption.

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Corporate Taxes

Company Tax
Tax Rate For Foreign Companies
Foreign companies are taxed at the same rates as local ones, in respect of income that is derived from the Maldives.
Non-resident international transport operators are taxed at 2%.
Capital Gains Taxation
No capital gains tax is levied in the Maldives.
Main Allowable Deductions and Tax Credits

Expenses eligible for deduction from business income include:

  • payment of zakat al-mal paid to a relevant government institution
  • contribution to the Maldives Retirement Pension scheme
  • donations to government-approved institutions or a charitable organisation approved by the Commissioner General of Taxation (capped at 5% of the taxable income).

Further deductions are available (subject to conditions) for welfare expenses, interest on loans (up to 6% per year), bad debts included in the corporate’s total income if reasonable steps have been taken to realise the debt; head office expenses (capped at 3% of total income), expenses incurred before the commencement of business.

The loss suffered in a tax year can be carried forward and set off against the taxable income of future years.

Other Corporate Taxes
Corporate taxes levied in the Maldives include a Green Tax (levied on tourists who stay in tourist resorts, tourist hotels, and tourist vessels at USD 6/day); customs duty (from 0% to 100% of the value of goods); and social security contributions (7% of the employee’s pensionable wage payable by the employer).
Other Domestic Resources
Maldives Inland Revenue Authority (MIRA), Tax guides

Country Comparison For Corporate Taxation

  Maldives South Asia United States Germany
Number of Payments of Taxes per Year 17.0 26.7 10.6 9.0
Time Taken For Administrative Formalities (Hours) 390.5 273.5 175.0 218.0
Total Share of Taxes (% of Profit) 30.2 43.9 36.6 48.8

Source: Doing Business - Latest available data.

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Individual Taxes

Tax Rate

Personal income tax 2023 brackets
MVR 0 - 720,000 0
MVR 720,000 - 1,200,000 5.5%
MVR 1,200,000 - MVR 1,800,000 8%
MVR 1,800,000 - MVR 2,400,000 12%
Above MVR 2,400,000 15%
Allowable Deductions and Tax Credits

No specific expense in relation to employment is allowed as a deduction from employment income. Zakat payments and contributions to the Maldives Retirement Pension Scheme are deductible.

Life insurance premiums can be deducted if several conditions are respected. Donations to a State institution or a charitable organisation approved by the Commissioner General of Taxation are deductible up to 5% of the taxable income. Interest on loans is also deductible (up to 6% per year).

Special Expatriate Tax Regime
A tax resident in the Maldives is subject to income tax on worldwide income; whereas a non-resident and a temporary resident is taxable in respect of income that is derived from the Maldives.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Maldives Inland Revenue Authority.
Withholding Taxes
Dividends: 0 (resident)/10% (non-resident), Interests: 0 (resident)/10% (non-resident; except interest payable to a bank or financial institutions approved by the MIRA), Royalties: 0 (resident)/10% (non-resident).

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Sources of Fiscal Information

Tax Authorities
Maldives Inland Revenue Authority
Other Domestic Resources
Maldives Monetary Authority

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Intellectual Property

National Organisations
Intellectual Property Unit - Ministry of Economic Development
Regional Organisations

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Legal Framework

Equal Treatment of Nationals and Foreigners
Historically, the judicial process has been slow and, often, arbitrary. The Maldivian judiciary is a semi-independent institution but has been subjected to executive influence, particularly the Supreme Court, despite the fact that articles 141 and 142 of the Maldives Constitution affirm the independence of the judiciary.
The Language of Justice
Divehi. Article 51 of the Constitution states that everyone charged with an offence has the right "to an interpreter to be provided by the State where he does not speak the language in which the proceedings are conducted, or is deaf or mute".
Sources of the Law and Legal Similarities
The Maldives legal system is based on a mixture of Islamic Law and English common law. English common law greatly influences the civil and commercial laws of the country, and it is one of the main sources of the law together with the Constitution and Shariah Law.
Checking National Laws Online
My Law governmental portal

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National Standards Organisations
Maldives Standards and Metrology Centre (MSMU)
Integration in the International Standards Network
The Maldives is not a member of ISO.
Classification of Standards
Accreditation is done according to the international ISO standards that are recognized as Maldivian (MDV) ones.
Online Consultation of Standards
Maldives Standards and Metrology Centre (MSMU)
Certification Organisations
Maldives Standards and Metrology Centre (MSMU)

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Business Practices

General Information
Opening Hours and Days
The public offices working week starts on Sundays and ends on Thursdays, offices are generally open from 8 am until 2 pm.
Most banks are open from 8.30 am to 2.30 pm.
Most of the stores are open to customers daily, from 9 am to 7 pm, while the opening is in the afternoon on Fridays.

Public Holidays

New Year's Day 1st January
Ramadan (Eid and Hajj) variable
Labor Day 1st May
Independence Day 26th July
National Day 27th September
Prophet Mohamed’s (SAW) Birthday 8th October
The Day Maldives Embraced Islam 27th October
Victory Day 3rd November
Republic Day 11th November
Holiday Compensation
Overtime pay for Fridays or public holidays is set at 1.5 times an employee’s hourly salary rate.

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Latest Update: May 2024