Tourism Boundary Regulation

The Tourism Boundary Regulation¹  (the “Regulation”) was published on 14 March 2023 which introduced significant new changes to the provisions relating to the determination of boundaries of islands leased for tourism purposes.

The new Regulation also repealed the Boundary Regulation for Tourist Resorts, Tourist Hotels, Tourist Guesthouses and Yacht Marinas² (the “Previous Regulation”) which had been in place previously for regulating boundary matters of tourism establishments.

Applicability of the Regulation

The Regulation applies to tourist resorts, integrated tourist resorts, tourist hotels, resort hotels, tourist guesthouses and yacht marinas (collectively “Tourist Establishments”). Thus the boundaries of such islands which have been leased for the operation of Tourist Establishments will be determined based on the Regulation.

The Tourist Establishments are required under the Act to maintain the lagoon area within their boundary and fines are imposed for any breach of the Regulation.

Determination and extension of lagoon boundaries

The lagoon boundaries of the islands are determined using the mean tide line. This is a departure from the Previous Regulation, where vegetation line was utilised for the calculation of the boundaries.

The Regulation provides that the boundary of the islands leased for the development of the Tourist Establishments will be determined under the following routes:

1. Route 1: Where the lease agreement specifically provides for a demarcated lagoon area, the boundary of the island would be as demarcated under the lease agreement.
2. Route 2: Where the lease agreement does not provide for a demarcated lagoon area, the boundary would be determined as per the Regulation in the following manner.

(m =metres)

	Scenario	Boundary
1.	The lagoon extends more than 500m from the mean tide line; and  There are no additional islands within the lagoon	500m from the mean tide line of the island (boundary extendable up to 1000m – detailed below)
2.	The lagoon does not extend more than 500m from the mean tide line; and There are no additional islands within the lagoon	The boundary would be up to the outer edge of the lagoon
3.	Lagoon has additional tourist islands/uninhabited islands within the lagoon; and The distance between two islands is less than 1000m	The boundary of the island would be split based on the equidistant line between two islands
4.	Lagoon has additional tourist islands/uninhabited islands within the lagoon; and The distance between two islands is more than 1000m	500m from the mean tide line of the island (boundary may be extendable up to 1000m – detailed below)
5.	The boundary as calculated above, conflicts with the territory of an inhabited island	Boundary of the island would be limited up to the territory of the inhabited island

Historical changes

It is to be noted that the demarcation point and the extendable area has been subject to several changes under the Previous Regulation. The changes under the Previous Regulation have been detailed below.

	Boundary	Boundary Extension*
Previous Regulation (Published on 31 January 2012)	1000m from the vegetation line	Not allowed
First Amendment to the Previous Regulation (Published on 5 March 2014)	1000m from the vegetation line	Boundary extendable to 2000m from the vegetation line where rooms or resort facilities are being developed in the extended area. Additional area of the lagoon more than 1000m from the vegetation line can be leased under a separate lease agreement with a joint venture company of the government
Second Amendment to the Previous Regulation (Published on 1 November 2016)	500m from the vegetation line	Boundary extendable to 2000m from the vegetation line where: (a) the lagoon length is more than 500m, (b) rooms, facilities being developed in the extended area are connected to the tourist resort, and (c) the extended area is used for the purposes of those facilities or resort.

* Boundary extensions can only be up to the outer edge of the lagoon in which the island is situated.

Current law

The new Regulation maintains the 500m area demarcation (currently calculated from the mean tide line), however, significant changes have been introduced for the extension of the boundary. 

As per the Regulation:

1. The boundary is now extendable to 1000m from the mean tideline (maximum up to the outer edge of the lagoon).
2. A payment of USD 100,000 has to be paid to the Maldives Inland Revenue Authority as extension fee.
3. No requirements as to development of rooms, facilities has been included in the Regulation.

Exceptions to the calculation of the boundary

1. The Ministry of Tourism may exclude surfing areas, diving points and other tourist attractions from the boundary of an island. Such areas must be published by the Ministry.
2. Where a room or a resort facility is situated outside the lagoon boundary of the island as determined under the Regulation, the boundary will be extended up to 50m from the footprint of the room or facility to include such structures within the boundary.
3. Where the boundary determined under the Regulation for island A, conflicts with the boundary of island B prescribed under the respective lease agreement of island B, the boundary of island A will only extend up to the boundary of island B.
4. Where the boundary determined under the Regulation conflicts with lagoon boundaries prescribed under another act, the boundary prescribed under the Regulation will only be limited to the non-conflicting area.

No Development Zone

A No Development Zone of 50m will be maintained as a buffer area for each island from the inward area of the outer boundary of the island. 

1. It is not permitted to develop any structures or undertake any reclamations in the no development zone.
2. Previously, a No Development Zone of 100m was maintained for boundaries determined between multiple islands within the same lagoon.

Exclusive Zone

The Regulation also provides that the sea area up to 300m from the outer edge of the lagoon will be an Exclusive Zone of the island (if the boundary extends up to the outer edge of the lagoon). This was also included in the Previous Regulation.

1. However, while the Previous Regulation restricted all developments within the Exclusive Zone, the new Regulation allows renewable energy or environment related projects to be undertaken in the Exclusive Zone with authorisation from the Ministry of Tourism.
2. Where the Exclusive Zone extends to the territory of inhabited islands or areas demarcated under another act, the Exclusive Zone will be limited to the non-conflicting area.

Amendment of the Lease Agreement

1. The Regulation provides that where the lease agreement does not specifically contain a demarcated boundary area, such lease agreements should be amended to include the lagoon boundary as stipulated in the Regulation.
2. Further, the lease agreement should also be amended where the boundary has been extended under the Previous Regulation and such extension has not been included in the lease agreement.
3. In this regard, the Ministry of Tourism has published a Circular³ on 21 March 2023 requesting tourist establishments to complete and submit a boundary demarcation report along with a map of the demarcated area endorsed by a certified surveyor. If the boundary has been demarcated in the current lease agreement, tourist establishments have been requested to submit the boundary demarcations annexed to the lease agreement to the Ministry.

Pursuant to the above Circular, the Ministry of Tourism has also requested tourist establishments wishing to extend their boundaries to submit a Letter of Interest before 30 June 2023.

Effective date

The Regulation is effective from 14 March 2023.

1. Regulation Number 2023/R-90
2. Regulation Number 2012/R-7
3. Circular Reference Number 88-PS/CIR/2023/13