President Dr. Mohamed Muizzu on Friday ratified the 16th Amendment to the Decentralization Act (Act No. 7/2010), following its passage during the 22nd sitting of Parliament’s second session on August 6, 2025.
The amendment introduces key reforms aimed at strengthening local governance, including clearer definitions of the scope of business activities for Local Authority Companies, revised principles for state grants to councils, and new procedures for major financial decisions in the final year of a council’s term.
Under the changes, any business activities by Local Authority Companies found in conflict with the law must cease within 90 days. Councils are also prohibited from charging rent for land or buildings allocated for essential public services.
Additionally, in the final 365 days of a council’s term, new staff appointments, leasing of land, lagoons, or reef areas, and projects outside the approved development plan must comply with guidelines from the Ministry of Finance and the Local Government Authority.
Following ratification, the amendment was published in the Government Gazette and has now come into force. President Muizzu said the reforms are a significant step towards advancing and strengthening decentralized governance in the Maldives.
The amendment introduces key reforms aimed at strengthening local governance, including clearer definitions of the scope of business activities for Local Authority Companies, revised principles for state grants to councils, and new procedures for major financial decisions in the final year of a council’s term.
Under the changes, any business activities by Local Authority Companies found in conflict with the law must cease within 90 days. Councils are also prohibited from charging rent for land or buildings allocated for essential public services.
Additionally, in the final 365 days of a council’s term, new staff appointments, leasing of land, lagoons, or reef areas, and projects outside the approved development plan must comply with guidelines from the Ministry of Finance and the Local Government Authority.
Following ratification, the amendment was published in the Government Gazette and has now come into force. President Muizzu said the reforms are a significant step towards advancing and strengthening decentralized governance in the Maldives.
