Tourism Ministry Introduces Share Transfer Fee and Increases Lease Transfer Fee Under Grant of Rights Regulation
The Ministry of Tourism, on 31 October 2017, published the 4th Amendment to Regulation Number 2010/R-14 (Grant of Rights – land and islands leased for tourism purposes) which, by effect of the Amendment, transfers fee impositions from Regulation Number 2016/R-69 (Submission of Proposals for Leasing Islands, Plots of Land and Lagoons for Tourism Purposes) to the Grant of Rights Regulation.
The amendment now imposes new fee requirements, under the Grant of Rights Regulation, on any share or lease transfer of a company or partnership that is a leaseholder of an island, land or lagoon allocated for tourism purposes and is undergoing development at the time of that share or lease transfer. Prior to this, the Ministry levied the same fees on lease transfers and share transfers under Regulation Number 2016/R-69 (Submission of Proposals for Leasing Islands, Plots of Land and Lagoons for Tourism Purposes).
Prior to this amendment, under the Grant of Rights Regulation, the leaseholder of an island or land allocated for development of a tourist resort, was allowed to transfer shares after receiving written permission from the Ministry. The amendment inserts a new Section 7 under which the leaseholder, being a company or a partnership, of an island, land or lagoon allocated for tourism purposes and undergoing development, can only receive the service of authorization of share transfer and permission from the Ministry, once that company or partnership pays a fee of USD 100,000 to the State in a manner prescribed by the Ministry. However, subsection 7(b) of the Regulation exempts the payment of that fee on share transfers within the partnership or company.
The amendment also introduces subsection 11(e) which permits sub leasing islands that are created through the reclamation of land in a lagoon allocated for tourism purposes if the lease agreement for that lagoon permits it. The subsection also permits subleasing those islands to a third party.
Finally, Section 33 of the Regulation is amended to the effect that the Leaseholder of an island, land or lagoon allocated for tourism purposes and undergoing development, may only transfer or sell their rights and receive the service of authorization of such transfer or sale upon payment of a fee of USD 100,000 to the State in a manner prescribed by the Ministry. Though prior to this, the transfer fee under this Regulation was USD 5,000, the lease transfer fee was increased to USD 100,000 from 14 August 2016 under the Regulation for Submission of Proposals for Leasing Islands, Plots of Land and Lagoons for Tourism Purposes.
Correction note: This article was amended on 5 November to reflect the ongoing practice under the two Regulations referenced in this article.