Maldives mandates salary payments to expatriate workers via bank accounts

The Maldives has amended its regulations to mandate that all wages and allowances for expatriate workers be deposited directly into bank accounts opened in the employees' names.

The Maldivian government on Tuesday gazetted the third amendment to the Regulation on Foreign Employment in the Maldives. Under this amendment, a new clause (d) has been added to Section 58, mandating that the salaries of all expatriate workers in the Maldives must be deposited into a bank account opened in the employee's name at a bank registered with or licensed by the Maldives Monetary Authority (MMA).

This regulation will come into effect 30 days after August 25.

Amendments were previously introduced to the law mandating that expatriate salaries must be deposited directly into bank accounts. Under these regulations, companies failing to comply are subject to fines. However, the collection of these fines was eventually suspended. This decision followed challenges in opening bank accounts for a significant number of undocumented expatriates who lack the necessary legal documentation.

At that time, the requirement to deposit the salaries and allowances of expatriates into bank accounts was mandated specifically to facilitate the collection of remittance tax from foreign workers.

Remittance tax is a levy collected by the state on funds transferred abroad by expatriates. Under this regulation, a three percent tax is applied to all such outgoing financial transfers.