The government has said President Abdulla Yameen’s flagship Special Economic Zone (SEZ) legislation would bring an end to the Maldives’ dependence on tourism. The bill aims to create jobs, and stimulate investment in the Maldives’ underdeveloped atolls and bring in long term development.
The bill proposes handing over control of the Maldives’ atolls to corporations, and suggested lax regulations will allow money laundering, and increase corruption and inequality. It may also become a tool for resort owners to legally evade taxes.
The Maldives has plans to set up nine zones, including free trade zones, offshore finance zones, high-tech zones, and ports. The SEZs are to be administered by a 17-member board consisting largely of government officials.
Incentives for SEZ developers include exemptions from import duty, Business Profit Tax (BPT), Goods and Services Tax (GST), and withholding taxes, and concessions in bringing in expatriate workers. There are no regulations on money remittance, and the bill also provides for land lease periods up to 99 years. Further, any company with a majority of local owners (51 percent) can buy and own land without paying land taxes.
President Abdulla Yameen has hailed People’s Majlis passage of flagship Special Economic Zone (SEZ) bill as an incentive for multi-million dollar investments in the Maldives.
Speaking to the press today, Yameen said the SEZ bill dispels investor concern over short lease periods and legal protection.
“Investors willing to invest billions of dollars raise questions over land lease periods. If its 33 years, they are not interested in [investing]. This is why major investors lack interest in the Maldives. We cannot even hold discussions with such investors. We have now created the legal environment required to attract major investments. This creates such a framework,” he said.
Former President Mohamed Nasheed dismissed SEZs and the touted mega projects as “castles in the air.”