The Maldivian Parliament is reviewing a new Foreign Currency Bill that offers resorts and other tourism establishments greater flexibility in meeting foreign exchange requirements. The bill, submitted on Monday, proposes that resorts can choose between exchanging USD 500 per tourist as currently required or 20 percent of their monthly revenue.
The foreign exchange regulation, which came into effect on October 1, requires resorts to exchange USD 500 per tourist and guesthouses to exchange USD 25 per tourist with local banks. This policy had been criticised by tourism industry stakeholders, who argued it was unfair to establishments serving diverse market segments, as it did not account for factors such as room rates, duration of stay, or age of guests.
Despite initial resistance to revising the regulation, President Dr Mohamed Muizzu announced on November 17 that the USD 500 exchange requirement would remain unchanged. However, the Maldives Monetary Authority (MMA) later introduced a draft bill with concessions, culminating in the final bill submitted to Parliament.
The bill categorises tourist establishments into two groups:
- Category-A establishments, which include registered resorts, integrated tourist resorts, and private islands, must choose between exchanging USD 500 per tourist or 20 percent of their monthly revenue.
- Category-B establishments, including tourist vessels, hotels, and guesthouses, must exchange either USD 25 per tourist or 20 percent of their monthly revenue.
Exemptions are provided for tourists staying less than 24 hours, those under 10 years old, tourists hosted on a complimentary basis, and government-hosted tourists.
Additionally, non-tourism businesses generating over USD 15 million in annual foreign currency revenue must exchange a percentage of their monthly revenue, a threshold lowered from USD 20 million in the draft bill. Such businesses are also required to register with the MMA.
Non-compliance with the exchange requirements will result in penalties, including a fine of 0.5 percent of the business’s monthly USD exchange requirement and potential daily penalties until compliance is achieved.
The bill, sponsored by Ibrahim Falah of the ruling People’s National Congress (PNC), seeks to balance the needs of the tourism sector while ensuring adequate foreign exchange liquidity in the Maldivian economy. Parliament will now review the proposed legislation, which could significantly impact the financial operations of tourism and non-tourism businesses across the country.
