President Dr. Mohamed Muizzu ratified the Foreign Currency Bill today, marking a significant step in regulating foreign currency transactions in the Maldives.
The newly ratified law establishes comprehensive guidelines for managing foreign currency transactions and regulates currency exchange practices. A key provision mandates that all domestic transactions must be conducted in Maldivian Rufiyaa, prohibiting the use of foreign currencies except in specific circumstances defined by law. Additionally, it bans charging Maldivian nationals for services provided or acquired within the Maldives in any currency other than the Rufiyaa.
The law introduces a structured framework for businesses operating under Maldivian jurisdiction to exchange foreign currency from their realized sales proceeds. These businesses must exchange foreign currency with local banks, which are required to sell a specified percentage of these transactions to the Maldives Monetary Authority (MMA). Businesses are categorized into three groups, with different exchange requirements. Category A includes resorts, integrated tourist resorts, private island resorts, resort hotels, and similar establishments. These businesses must exchange either $500 per tourist per month or 20% of their gross monthly sales with banks.
Category B covers tourist hotels, guesthouses, and vessels, requiring them to exchange $25 per tourist per month or 20% of their gross monthly sales with banks. Category C applies to businesses outside Categories A and B but with annual sales or purchase transactions exceeding $15 million in foreign currency. These businesses must exchange 20% of their gross sales with banks.
The law also requires businesses operating in the tourism sector or those surpassing the $15 million threshold in foreign currency transactions annually to register with the MMA and transfer their realized foreign currency sales proceeds to a local bank.
The Maldives Monetary Authority will oversee the enforcement of this law, with supporting regulations to be developed within two months of its enactment.
The bill was passed during the 60th sitting of the Parliament's third session on December 12, 2024. Following ratification, the Foreign Currency Act was published in the Government Gazette and will come into effect on January 1, 2025. Upon its implementation, certain sections of existing regulations, including the Foreign Currency Regulation (Regulation no. 2024/R-91) and parts of the Maldives Monetary Act (Law no. 6/81), will be repealed.
The newly ratified law establishes comprehensive guidelines for managing foreign currency transactions and regulates currency exchange practices. A key provision mandates that all domestic transactions must be conducted in Maldivian Rufiyaa, prohibiting the use of foreign currencies except in specific circumstances defined by law. Additionally, it bans charging Maldivian nationals for services provided or acquired within the Maldives in any currency other than the Rufiyaa.
The law introduces a structured framework for businesses operating under Maldivian jurisdiction to exchange foreign currency from their realized sales proceeds. These businesses must exchange foreign currency with local banks, which are required to sell a specified percentage of these transactions to the Maldives Monetary Authority (MMA). Businesses are categorized into three groups, with different exchange requirements. Category A includes resorts, integrated tourist resorts, private island resorts, resort hotels, and similar establishments. These businesses must exchange either $500 per tourist per month or 20% of their gross monthly sales with banks.
Category B covers tourist hotels, guesthouses, and vessels, requiring them to exchange $25 per tourist per month or 20% of their gross monthly sales with banks. Category C applies to businesses outside Categories A and B but with annual sales or purchase transactions exceeding $15 million in foreign currency. These businesses must exchange 20% of their gross sales with banks.
The law also requires businesses operating in the tourism sector or those surpassing the $15 million threshold in foreign currency transactions annually to register with the MMA and transfer their realized foreign currency sales proceeds to a local bank.
The Maldives Monetary Authority will oversee the enforcement of this law, with supporting regulations to be developed within two months of its enactment.
The bill was passed during the 60th sitting of the Parliament's third session on December 12, 2024. Following ratification, the Foreign Currency Act was published in the Government Gazette and will come into effect on January 1, 2025. Upon its implementation, certain sections of existing regulations, including the Foreign Currency Regulation (Regulation no. 2024/R-91) and parts of the Maldives Monetary Act (Law no. 6/81), will be repealed.
