DTIS, Volume I - Enhanced Integrated Framework (EIF)

system of micro-credit intermediaries targeting women and the poor as can be found in
other countries.
As we have seen, FISB processes and registers investment in all sectors except tourism,
which is the responsibility of MTCA. The investor is required to produce a plan for the
investment and to obtain approval. A unit within the FISB is responsible for regulation
and promotion of national investment. The Company Law, 1996 (No. 10/96) regulates
the different types of legal entities under which companies may register, and is common
to both foreign and national investors. To this extent, the primary role of the FISB is one
of regulation. The FISB does not have the capacity or systems in place to provide
effective support for investment promotion or for SME start-ups and related services.
The main legal code on foreign investment is the Foreign Investment Law, 1979 (No.
25/79), which guarantees investor security in both goods and services. Foreign investors
may own and operate business enterprises. The Law on Doing Business in Maldives by
Foreign Nationals, 1979 (No. 4/79) covers foreign investment in trade (imports and
exports) and related services. The same law also covers the operation of a foreign party
or joint venture in wholesale and retail activities. Foreign investors are granted rights to
invest on equal footing with the local investors, and 100 per cent foreign ownership is
permitted. There is a need to revise and modernize the legal framework for investment
for it to become more supportive of local business development.
Investment in the tourism sector is managed and processed by MTCA. There are
indications that the processes that are involved are relatively efficient if not fully
transparent. In particular, incentives and concessions can vary from investor to investor.
MTCA, in collaboration with MATI and MPTB is also active in promoting the Maldives
as a tourism destination.
Aside from the tourism sector, export promotion services have no government support
mechanism, except for the state owned Maldives Industrial Fisheries Corporation
(MIFCO) that promotes Maldives fish.
Professional business or trade associations such as the Maldives Chamber of Commerce
and Industry (MCCI) and the Fishermen’s Association are weakly funded. These bodies
act mostly as informal discussion and lobbying partners with very little capacity for
gathering and disseminating international marketing intelligence and providing services.
Since corporate taxes and VAT are not levied, there has been no need in the Maldives to
establish export processing zones, as these are normally justified by offering tax
incentives to the investors. The only related incentive in this regard is the customs duty
exemption, which is granted on a discretionary basis, thus reducing the scope of
transparency.
D. INFRASTRUCTURE
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