The Foreign Currency Bill has been ratified.
President Dr. Mohamed Muizzu ratified the bill mandating tourist facilities to convert U.S. dollars on Saturday.
The bill was passed at the 60th session of the third term of the People's Majlis for this year, on December 12.
The bill, drafted by the Maldives Monetary Authority (MMA), was submitted to the People’s Majlis on December 9. The bill, presented by MP for Inguraidhoo constituency Ibrahim Falah, was debated during the parliamentary sitting held on December 10. The same day it was accepted and sent to the Public Accounts Committee, which greenlighted it on December 11. The work on the bill, expected to significantly impact tourism – the Maldives’ most central industry – was conducted in secret within the committee.
The purpose of this bill is to establish a solid legal framework necessary to determine the transactions that can be conducted in foreign currency in the Maldives, to set rules for importing and exporting foreign currency to and from the Maldives, handling, depositing, and exchanging foreign currency in the Maldives, and to establish and implement principles and rules related to other foreign currency transactions.
The bill prohibits any monetary obligation or transaction in the Maldives from being conducted, presented, or fulfilled in any foreign currency other than Maldivian currency, except in specific circumstances outlined in the bill. It also establishes a rule that Maldivian citizens cannot be obligated to pay for goods and services purchased in the Maldives in foreign currency.
Further, under this bill, entities in the tourism sector and other entities that receive foreign currency income (realized sales proceeds) of at least USD 15,000,000 in a calendar year are required to register with the central bank within specified periods. These entities must transfer their foreign currency income from the sale of goods and services to a foreign currency account opened at a bank established in the Maldives.
In addition to this, the bill proposes that entities falling into three categories that receive foreign currency income must convert a portion of their foreign currency income to a bank. The bank is then required to sell a certain percentage of this foreign currency to MMA within a period specified by MMA.
The categories are as follows:
- Category A Tourism Establishments, including tourist resorts, integrated tourist resorts, private islands, resort hotels, and similar establishments in the Maldives, must convert either USD 500 per tourist arriving at the establishment during a calendar month, or 20 percent of the gross sales in foreign currency received during the calendar month.
- Category B Tourism Establishments, including tourist vessels, tourist hotels, and tourist guesthouses, must convert either USD 25 per tourist arriving at the establishment during a calendar month, or 20 percent of the gross sales in foreign currency received during the calendar month.
- Entities other than Category A and Category B that have received at least USD 15,000,000 in foreign currency for goods and services sold or provided during the previous calendar year must convert 20 percent of their foreign currency income received during a calendar month to Maldivian Rufiyaa at a bank.
The main regulatory authority for implementing and enforcing the law is the Maldives Monetary Authority.
The bill proposes that the MMA should establish the necessary regulations under the law within two months of the law coming into effect.
Upon ratification, the law has been publicized in the government gazette.
The law will come into effect on 1 January 2025.
With the implementation of the law, Regulation Number 2024/R-91 (Foreign Currency Regulation) and Sections 24(d) and (e) of Law Number 6/81 (Maldives Monetary Authority Act 1981) have been repealed, except in the circumstances described in Article 22(a) and (b) of the law.
