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.
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.
Please refer to 'Maldives Corporate Taxation' section above for other taxes and duties levied in the Maldives.
Please refer to 'Maldives Corporate Taxation' section above for other taxes and duties levied in the Maldives.
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