The Maldives is set to introduce a new residency programme aimed at attracting foreign investors, offering them the chance to purchase property in designated areas of the country. The initiative is expected to kick off in February next year and is part of the government’s broader strategy to boost economic growth and enhance foreign currency reserves.
During a press conference following a cabinet meeting at the President’s Office yesterday, Economic Minister Mohamed Saeed outlined the programme’s goals and details. “This initiative represents a significant leap forward in enhancing our foreign exchange reserves,” Minister Saeed said. “We’ve already made strides in this direction and are collaborating with some of the world’s leading companies to ensure its success.”
“The government is considering designated areas such as Gaafaru and Fushidhiggaru to develop these residences,” Minister Saeed explained. He also noted that this approach is already common in some resort areas, which has helped build trust among investors.
Foreign Minister Moosa Zameer, who also spoke at the event, emphasised that the programme is being developed in consultation with international experts to ensure it aligns with the unique context of the Maldives. “Residency programmes are widely promoted in other countries through specialised companies,” Minister Zameer said. “We are tailoring this model to suit the Maldivian environment.”
Old vs. New: Key Differences from Past Initiatives
A key point of discussion was how this new programme differs from the previous Corporate Resident Visa scheme introduced by the former Maldivian Democratic Party (MDP)-led government. Minister Saeed explained that the earlier programme, launched around 2014, required foreign investors to deposit USD 1 million or invest USD 50 million, with a scope of involvement limited by government regulations. This contrasted with the later reduction of the minimum deposit to USD 250,000—a wildly controversial change which the ruling party Progressive Party of Maldives (PPM) alleged was an attempt to sell off national assets.
Minister of Homeland Security and Technology, Ali Ihusan, elaborated that the new programme would offer a more comprehensive approach compared to its predecessor, drawing lessons from successful models in Dubai and Malaysia. “We aim to attract between 1,500 and 2,000 primary applicants and around 4,000 secondary applicants within the first five years,” Ihusan noted. “We expect to generate up to USD 6 million in indirect investments and approximately USD 1.1 billion in direct investments over this period.”
Weighing Economic Promise Against Potential Pitfalls
While investor residency programmes, often termed “golden visas,” are designed to boost economic growth by offering residency or citizenship in exchange for investment, they are not without controversy. These programmes can attract financial contributions but also pose significant risks, particularly in terms of financial crime and corruption.
The Financial Action Task Force (FATF) and the Organisation for Economic Co-operation and Development (OECD) have both highlighted the vulnerabilities associated with such programmes. These include the potential for money laundering, fraud, and the facilitation of corruption. The complex international investment structures often involved can be exploited by individuals seeking to evade justice or conceal illicit assets, raising serious concerns about the integrity of the immigration system.
Many countries that have implemented similar programmes have faced challenges. The United Kingdom, for example, closed its RBI programme partly due to financial crime risks and a lack of tangible economic benefits. Similarly, Ireland and Canada have either closed or paused their programmes, citing economic concerns. The Australian Productivity Commission found that investor visas are prone to fraud and may yield less favourable economic impacts compared to other visa types.
Challenges to Public Trust and Governance
The notion of allowing wealthy individuals to essentially buy their way into a country can undermine public trust and raise questions about fairness within the immigration system. Furthermore, the potential for corruption and abuse associated with these programmes can damage the credibility of public institutions.
While the new residency programme in the Maldives may promise short-term economic benefits, it also carries significant risks. The potential for financial crime, the limited success of similar programmes elsewhere, and the systemic issues associated with fraud and corruption suggest that these programmes may do more harm than good. As the Maldives moves forward with this initiative, it will be crucial to address these concerns to ensure that the programme serves the best interests of both the country and its future residents.
