Malé: The Maldives Government has outlined the financial, development and ownership terms of the USD 20 billion Rasmalé Waterfront and Marina project being developed with Abu Dhabi-based Eagle Hills.
The Government and Eagle Hills signed a Commercial Terms Agreement on September 21 for the multi-phase development, which is planned to include residential areas, hotels and resorts, a megayacht marina, retail and entertainment facilities, offices, healthcare and educational infrastructure.
The project is planned across 500 hectares of Rasmalé, while the Government says a separate 500 hectares will remain designated for Maldivian residential development, with capacity for more than 150,000 residents.
The Government describes the Eagle Hills development as the largest investment project in Maldivian history, with an envisioned investment of USD 20 billion.
According to the Infrastructure Ministry, the project is expected to attract more than USD 30 billion in gross foreign investment over its operational lifetime, including an estimated USD 18 billion in net foreign direct investment flowing into the Maldivian banking system and economy.
At full maturity, the Government projects that the development could attract more than one million additional visitors each year, generate more than USD 2 billion in annual tourism revenue and create more than 54,000 direct and indirect jobs. These are projections rather than current economic returns.
A major component of the agreement is the construction of 5,000 housing units for Maldivians.
Finance Minister Hassan Zareer said the housing component is valued at approximately USD 500 million, with construction expected to begin with 5,000 units.
The Government has also described the housing component as an advance against its revenue share from the wider development.
What the Government says it will receive
Under the terms outlined by Infrastructure Minister Dr Abdulla Muththalib, the State is to receive the standard tourism goods and services tax applicable to businesses operating in the development, as well as a 10 percent share of revenue from sales and leases.
The Government has also said a 4 percent charge will apply to property transactions.
The Government says proceeds from property sales will be held in escrow accounts within the Maldivian banking system, with the arrangement intended to keep foreign currency within the domestic financial system.
The Government has repeatedly rejected claims that land in Rasmalé is being sold to Eagle Hills or foreign buyers.
Finance Minister Zareer said the development will operate on a leasehold basis and that legal ownership of the underlying land will remain with the Maldivian Government.
Attorney General Ahmed Usham said the current arrangement involves a planned 99-year lease of 500 hectares, rather than a transfer of ownership. He also said the parties have so far signed a Letter of Intent or Commercial Terms Agreement, with further agreements and legislation required before implementation.
The Government says the project will not provide freehold ownership of the land.
President Dr Mohamed Muizzu and government ministers have said the project does not provide tax concessions, duty exemptions, government loans or sovereign guarantees.
The President has also said the agreement will not contain provisions that violate the Constitution or Maldivian law.
The Government has also clarified that purchasing property in the development will not automatically provide a visa, permanent residency or citizenship.
Infrastructure Minister Muththalib said immigration decisions will remain under the authority of Maldives Immigration and will be governed by the Immigration Act. He also said ownership rights will be limited to the property purchased, while transfers or inheritance will require the applicable government procedures and fees.
The Government says Maldivian laws and regulations will apply throughout the development.
A project still subject to further agreements
Although the Commercial Terms Agreement establishes the main commercial framework, the Government has acknowledged that the project has not yet reached the stage where every implementation detail has been finalised.
Attorney General Usham said further discussions will be held based on the commercial terms, followed by additional agreements, while Parliament will need to pass relevant legislation. He said the Government will not implement the project in a manner that contravenes the Constitution or existing laws.
The Government therefore currently describes the USD 20 billion figure, visitor numbers, tourism revenue and job creation as projections associated with the completed development, rather than guaranteed economic outcomes.
