The Maldivian government has decided to postpone the lease payment for tourism establishments that must close for repair or renovation. The amended regulation on the postponement of lease payments for tourism establishments was made public in the government gazette.
To provide investors leeway to develop resorts, hotels, and guesthouses, the Ministry of Tourism decided to amend the regulation after it was first established in 2019. The government would delay the lease payment for any tourism establishment that closes for repair or renovation, according to the new amendment.
According to the regulation, the operator must inform the ministry before closing the establishment for redevelopment or refurbishment, and the ministry will then approve a lease rent postponement for a maximum of 18 months. The ministry will also extend the approval by 12 months if 50% of the work is completed. Any outstanding lease rent or fee for establishments that acquire approval may be paid within two years of the approval’s expiration. Only once every ten years will establishments be permitted to defer lease rent.
Furthermore, if an establishment fails to complete the development within the predetermined time frame, the Tourism Ministry will have the ability to extend the construction period. The establishment will be required to make payments as part of its corporate social responsibility (CSR) each quarter for three years after re-opening.
An establishment that receives permission to extend its construction period can also receive approval to defer the lease rent during the period on the condition that it agrees to pay the amount without interest each quarter for five years after a two-year grace period after it receives the operating license, or agree to pay the amount with a 3% interest each quarter after a two-year grace period after opening.
