Government Dissolves 28 Foreign Companies to Protect Reserved Maldivian Business Sectors

The Ministry of Economic Development, Transport and Trade has dissolved 28 foreign companies found to be operating in business sectors strictly reserved for Maldivian citizens. The action follows the implementation of the Foreign Investment Entry Requirements, established under the landmark Foreign Investment Act ratified in 2024. According to the ministry, the dissolutions were carried out using powers granted to the Registrar of Companies. To prevent sudden financial losses, the government provided a transition period, allowing foreign entities to either exit the reserved sectors or pivot to available investment opportunities within the country. The ministry emphasized that all legal procedures stipulated under the Companies Act were strictly followed before the companies were removed. This strategic move aims to protect emerging industries for local entrepreneurs while simultaneously attracting high-value foreign expertise in sectors where the Maldives lacks specialized capabilities. Under the new framework, several key sectors are now restricted to Maldivian ownership or operation. These include wholesale and retail trade, logistics, banking services, and general maritime transport. Additionally, the government has set financial thresholds for foreign participation: construction projects valued under USD 15 million and real estate developments under USD 100 million are now largely reserved for local investors. These restrictions target areas where Maldivians possess significant potential and competitive advantages. By limiting foreign dominance in small-to-medium scale projects, the government hopes to foster a more robust domestic business environment. The 2024 Foreign Investment Act represents the first major overhaul of the country's investment laws in 45 years. Formulated after extensive consultations, the Act seeks to balance the need for international capital with the necessity of protecting local livelihoods. While it tightens rules on reserved sectors, it also introduces modern protections for foreign investors to ensure the Maldives remains an attractive destination for global business through joint ventures and specialized entries.