Regulation on Registration of Foreign Companies

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The Regulation on Registration of Foreign Companies1 (the “Regulation”) was gazetted on 10 October 2024 to come into force with immediate effect.

The Regulation was enacted pursuant to the Companies Act2 and details the application process for the re-registration of foreign companies, along with compliance requirements applicable to them.

Permit for Re-Registration of Foreign Companies

Foreign companies can be re-registered in Maldives upon receiving approval to invest in the Maldives from the Ministry of Economic Development and Trade (the “Ministry) pursuant to the Foreign Investment Act3.

As a result, foreign companies will only be allowed to operate in business sectors in which 100% foreign shareholding is permitted. A brief on the new foreign investment framework of Maldives has been provided in our News Update (click here).

Re-registration process

The Regulation details the company name reservation process and documentation requirements for applications for the re-registration of foreign companies.

The re-registration application process provided in the Regulation is generally similar to the current process established by the Ministry which includes the submission of the constitutive documents and details of the shareholders and directors of the foreign company.

As a new requirement, the foreign company is required to submit a written declaration confirming that they have the required business permits in their jurisdiction of registration, that they are not in liquidation and that they have not been declared insolvent.

Following the submission of an application that fulfils the requirements provided in the Regulation, the Registrar of Companies (ROC) is required to re-register the foreign company and issue a Certificate of Re-Registration to the entity within 3 days.

Company Agent

The Regulation reiterates the requirement for foreign companies to appoint a Company Agent in Maldives. The role was introduced under the Companies Act which provided that the Company Agent would be accountable to the ROC on behalf of the re-registered foreign company and is also personally responsible for any actions taken against the re-registered entity.

A foreigner can be appointed as a Company Agent, however, the individual must be 18 years of age and be resident in Maldives.

Any changes to the Company Agent should be notified to the ROC within 7 days and the Regulation provides that the Company Agent cannot be replaced until a new appointment is in place.

Annual Submission to the ROC

The Regulation includes a requirement for foreign companies re-registered in Maldives to submit the following documents annually to the ROC (applicable to the business in Maldives):

  1. A notarised declaration4;
  2. Annual financial records;
  3. Directors’ Report;
  4. Auditor’s Report.

Notification of Changes to Company Information

The Regulation mandates that foreign companies re-registered in the Maldives must notify the ROC of specific changes that have occurred to the foreign company within 30 days. These include changes to the following information:

    • Company’s name, corporate form, addresses, contact details;
    • Shareholding and the board of directors;
    • Registration certificate and constitutive documents;
    • Capital structure;
    • Significant beneficial owners;
    • Company Agent (ROC to be informed within 7 days).

If any of the above changes are required to be made by approval pursuant to resolutions of the shareholders or directors of the foreign company, notarised copies of such resolutions are also required to be submitted to the ROC.

A penalty of MVR 1,000 is to be imposed for any failure to comply with the notification requirement.

Company Seal

It is not mandatory for foreign companies to use a company seal in Maldives. The Regulation permits the foreign company to utilise the company seal registered in the country of incorporation for the purposes of the Maldivian branch.

De-registration of foreign companies

The Regulation reiterates the events specified in the Act that can lead to the de-registration of foreign companies in Maldives. It requires foreign companies to apply for de-registration within 7 days upon the occurrence of any of the following events:

  1. Cessation of business activities in Maldives;
  2. Termination or expiry of the Foreign Investment Licence;
  3. Winding up of the foreign company.

An application for de-registration must be submitted along with the following documents:

  1. A document confirming the company’s decision to de-register5;
  2. The latest financial statement;
  3. A report confirming:

    • Settlement of all dues to the state;
    • Payment of wages to employees;
    • Settlement of any outstanding dues to third parties;
    • No ongoing cases against the company in the Maldives.

Where the company fails to submit for de-registration within the above period, the ROC has the discretion to de-register the company. Additionally, the ROC may de-register a foreign company after listing the company as an inactive company pursuant to the Companies Act.

Following the de-registration, the company’s name would be struck off from the Business Register and the company would not be permitted to conduct any business activities in Maldives thereon.

Applicable Fees

The following service fees are to be charged for foreign companies under the Regulation.

Fee Amount (MVR)
Re-registration Fee 2,000
Recording changes to company’s information 100
De-registration fee 2,000

Effective date

The Regulation became effective on 10 October 2024.

 

References

  1. Regulation Number 2024/R-100
  2.  Act Number 7/2023
  3.  Act Number 25/79. A new Foreign Investment Act (Act Number 11/2024) has been gazetted and is set to be effective from 3 December 2024 onwards.
  4. Details of the declaration has not been provided in the Regulation
  5.  Where the company submits for de-registration upon cessation of business or due to winding up of the company