- MMA proposes removing the USD 500 per-tourist conversion option for Category A luxury resorts, making 20% of monthly gross sales mandatory, expected to inject an additional USD 100 million annually into local banks.
- Category B entities (guesthouses, hotels, vessels) retain their dual option of USD 25 per tourist or 20% of monthly gross sales, while Category C non-tourism earners stay fixed at 20%.
- The non-tourism entry threshold under Category C rises from USD 15 million to USD 25 million, and a new clause lets MMA reduce conversion rates based on sector and ownership.
The Maldives Monetary Authority (MMA) has presented a comprehensive package of proposed legislative amendments to the Foreign Currency Act to the Attorney General’s Office. The proposed revisions represent a major overhaul of national foreign exchange regulations, establishing stricter conversion mandates for luxury tourism operators, raising revenue qualification thresholds for commercial non-tourism enterprises, locking down local payment infrastructure, and expanding central bank oversight across the Maldivian economy.
A central element of the reform focuses on revising mandatory foreign currency conversion rules, particularly by removing a long-standing statutory choice previously granted to luxury resort operators under Category A. Under current law, resort operators can either convert USD 500 for every tourist that stays at the resort OR 20% of their total monthly foreign currency earnings. The proposed amendment completely removes the USD 500 per-tourist option and makes converting 20% of total monthly foreign currency gross sales mandatory for all Category A resorts.
According to the proposal the existing dual-option framework created a severe structural imbalance between property types. High-end luxury resorts, where room rates frequently reach thousands of dollars per night, overwhelmingly elected the USD per head threshold. Compared to standard resorts, this option permitted luxury properties to convert a significantly lower fraction of their actual earnings into the domestic banking system. The central bank estimates that replacing the per-tourist calculation with a unified 20% revenue will inject an additional USD 100 million annually into local commercial banks, substantially increasing foreign exchange liquidity across the financial sector.
While conversion rules for Category A resort operators face substantial tightening, requirements for other business categories will remain distinct. Category B entities, encompassing tourist guesthouses, hotels, and vessels, will retain their current option of converting either USD 25 per tourist arrival or 20% of their monthly foreign currency gross sales. For Category C non-tourism foreign currency earners, the mandatory conversion percentage remains fixed at 20 percent of monthly foreign currency gross sales, though the entry criteria governing which enterprises fall under this requirement will change significantly.
The proposed revisions substantially raise the commercial entry threshold for non-tourism businesses regulated under Category C. The minimum foreign currency baseline requiring non-tourism enterprises to deposit sales and convert proceeds at local banks will rise from USD 15 million to USD 25 million (or equivalent in foreign currency) earned during the preceding calendar year. Alongside this higher threshold, a new statutory clause will grant the MMA explicit authority to reduce required conversion percentages based on a business’s sector and ownership composition, such as offering lower conversion rates to 100% Maldivian-owned enterprises. The operational specifics and criteria for these targeted adjustments will be stipulated in the General Regulation on Foreign Currency (Regulation No. 2026/R-28).
To guarantee strict compliance and prevent capital flight, the legislative draft introduces multiple procedural and structural mandates. Every entity subject to the FC Act will be required to designate a specific foreign currency account held at a local commercial bank, formally notified to the MMA, into which all foreign currency sales proceeds must be deposited. Concurrently, statutory amendments will be introduced to the National Payment Systems Act (Law No. 8/2021) mandating that all tourist resorts operate Point of Sale (POS) terminals linked directly to domestic bank accounts, ensuring card-based guest transactions route through the local banking network. Regulated businesses will also face expanded reporting obligations, including the mandatory disclosure of foreign debt details to support central bank enforcement.
To balance these stricter controls, the proposed amendments introduce a general clause granting the MMA discretionary power to provide commercial entities with flexible compliance schedules and administrative relief. The central bank will have the authority to grant concessions, such as installment plans for pending foreign exchange conversions, which will also apply retroactively to concession requests submitted prior to the passage of these amendments. The entire legislative package is scheduled to take effect exactly one month after its official publication in the Government Gazette.
Looking beyond immediate statutory adjustments, the MMA emphasized that enforcing the exclusive use of the Maldivian Rufiyaa (MVR) across all domestic commerce is vital for effective monetary policy transmission and long-term foreign exchange market stability. To achieve complete domestic Rufiyaaization, the central bank outlined a medium-term policy roadmap to explore requiring all government taxes to be settled in MVR, systematically rationalizing or removing current foreign exchange exemptions, progressively raising conversion percentages across all sectors, restricting domestic transactions conducted from foreign currency accounts, and revising regulations governing money-changing businesses. The MMA added that as Gross International Reserves strengthen over time, it may also explore transitioning toward a more flexible exchange rate regime.
