The Maldives Monetary Authority (MMA) has introduced the General Regulation on Foreign Currency, which came into effect on 28 February 2025. Enacted under the Foreign Currency Act, the regulation provides detailed guidance on currency conversion obligations, exemptions, and enforcement mechanisms.
Key Provisions
Foreign Currency Transactions
The Foreign Currency Act mandates that all transactions within the Maldives be conducted in Maldivian Rufiyaa, with certain exemptions. The new regulation expands these exemptions, allowing foreign currency transactions in specific cases, including:
- Insurance-related dealings.
- Loans, payments, and foreign exchange transactions between businesses and shareholders.
- Transactions between businesses and related parties.
- Payments for goods and services by diplomatic missions, multilateral organisations, and NGOs.
Additionally, the MMA governor has the authority to grant further exemptions based on policy considerations.
Tourism Establishment Categorisation
The regulation introduces further classifications for tourism-related businesses:
- Tourist accommodation facilities within yacht marinas are categorised as Category A tourism establishments.
- Homestays are explicitly classified as Category B guesthouses.
Mandatory Foreign Currency Conversion
From 1 January 2025, tourism establishments must convert foreign currency based on either:
- Tourist arrival basis, or
- Gross sales basis (mandatory for businesses earning at least USD 15 million annually in foreign currency).
Tourism businesses must declare their selected conversion method in their first sales report and may change it only once per year.
Reporting & Compliance
Businesses must submit detailed reports on foreign currency sales, deposits, and conversions via the MMA’s Foreign Exchange Portal. The regulation sets deadlines for:
- Sales Reports – due by the 28th of the following month.
- Conversion & Deposit Declarations – due within 10 working days of the following month.
Enforcement Measures
Non-compliance with the regulation can lead to penalties, including:
- Initial Notice – 15 days to rectify the breach.
- Final Notice – Additional 15-day period if non-compliance persists.
- Fines – Imposed if obligations remain unmet after the Final Notice.
- Business Permit Suspension – If fines are unpaid within 90 days, business permits may be suspended.
The MMA may also investigate financial records, tax returns, and banking transactions if it suspects fraudulent reporting.
The regulation aims to strengthen compliance and oversight of foreign currency transactions while ensuring businesses adhere to the nation’s financial regulations.
