Maldives Tax
Maldives personal Income Tax
There is no income tax in the Maldives, but the growing GDP and overall
life level makes Maldivian government discuss a probable income tax
introduction in the future.
Maldives Corporate Taxation
Maldives does not impose any kind of income tax on its citizens. There
is no income tax, corporate tax or property tax in the Maldives. Bank
profit tax is the only direct tax imposed in Maldives. A bank profit tax
of 25% on its taxable income is charged to all commercial banks. It
comprises 2% of the total government revenue. The Government is
considering the imposition of a corporate profit tax.
Major
indirect taxes are import duty and tourism tax. Import duty is levied on
imported goods. It is charged at varying rates from 5% to 200%. Import
duty brings approximately 25% of the government annual revenue from
taxation. Tourist tax is levied at a flat rate on every night a tourist
spends in the Maldives. Tourist tax brings around 15% of the overall
income derived from taxation on the annual basis. Lease and rentals of
resorts as well as state owned enterprises are other sources of the
government revenues. Every boat and motor vehicle must have an
appropriate license, by paying a license fee to the government.
Foreign investment in the Maldives has been key to the creation of a
successful tourism industry, which contributes to one-third of Maldives'
GDP. An important reason for the positive attitude of international
investors towards investing in the Maldives has been its tax system,
which is relatively favorable to foreign investors.
The
existing tax system in the Maldives is very simple and easy to
administer. There is no income tax, corporate tax or property tax. Most
of the revenue come from import duties, tourism tax, state owned
enterprises and resort lease rents. Other taxes include bank profits
tax, land rent, royalties, administrative fees and charges, work permit
and interest receipts.
Out of these, the most relevant tax to
investors, tourism tax is levied at a flat rate of USD 8 per night per
bed, regardless of the tariff rate for the bed.
Incentives for Foreign Investors
1. No personal or corporate income tax
2. No tax on profit, value added tax, property tax or capital gains tax
3. Right to 100% foreign ownership.
4. Legally backed investment guarantee.
5. Provision for overseas arbitration of disputes
6. Long term contractual agreements and long term lease of land
7. Freedom to use foreign managerial, technical and unskilled workers.
8. No foreign exchange restrictions.
9. No restrictions on the repatriations of earnings or profits.
Cost of Doing Business in the Maldives
The following fees are to be paid to the Registrar of Companies at the time of incorporation of a Company in the Maldives.
1. Annual fee USD 156 (approx)
2. Stamp fee USD 39 (approx)
3. Company registration fee; depends on the authorized registration fee
capital of the Company (Minimum authorized capital of USD 156 [approx.]
is required by Law)
4. All foreign investments incur an administrative fee of USD 2,000.
Cost of re-registering a Company in the Maldives - Re-registering a Company resident overseas in the Maldives is free
Royalty on Foreign Investments
Foreign investments registered with the Invest Maldives are required to
pay an annual royalty to the government, as per the following schedule:
- Foreign investment entities whose ownership is at least 51 percent
held by Maldivians or wholly owned Maldivian entities incorporated in
the Maldives, are required to pay an annual royalty equivalent to 1.5
percent of Gross Turnover or 7.5 percent of Net Profit, whichever is
greater.
OR
- Foreign investment entities, in which, less than
51 percent of the ownership is held by Maldivians or wholly owned
Maldivian entities incorporated in the Maldives, are required to pay an
annual royalty equivalent to 3 percent of Gross Turnover or 15 percent
of Net Profit, whichever is greater.
Customs Taxation
Duty rates in Maldives range as follows:
- From 5 percent to 20 percent on daily necessities and essentials ;
- From 10 percent to 25 percent on items essential for development of domestic industries ;
- From 25 percent to 35 percent on items that will enhance the economic welfare of the country ;
- From 35 percent to 200 percent on luxury items ;
Some personal items, medicines, staples, and textbooks are exempt from import duties. Duties are payable in local currency.
Types of Companies in the Maldives
Private Company Limited by Shares
At least two and a maximum of 50 shareholders may establish this type
of company which is not allowed to offer its shares to the general
public. At least two directors must be assigned to handle a company's
management. At least one director should be resident in Maldives, and
all directors must be at least sixteen years old. A company must have a
secretary. Annual accounts should be submitted.
Public Company Limited by Shares
At least ten shareholders may incorporate a public company. This
company may offer its shares to the general public. At least five
directors must form a Board of Directors who directly participate in a
company's management. A secretary must be assigned.
maldives vat / sales tax
There is no VAT (Value Added Tax), sales tax or similar in the Maldives.