The Ministry of Economic Development, Transport and Trade has announced that the transition period for foreign investment businesses operating in the wholesale, retail and logistics sectors will end today, October 8, 2026, triggering the next phase of compliance and enforcement under the Foreign Investment Entry Requirements (FIER).
The announcement applies to businesses with foreign shareholding operating in wholesale and retail, as well as logistics services including cargo sales agents (CSA), general sales agents (GSA) and passenger sales agents (PSA).
From October 8, businesses in these sectors will no longer be permitted to continue activities unless they have fulfilled the requirements applicable to their operations. Activities carried out without meeting the requirements may constitute a contravention of the Foreign Investment Act (Law No. 11/2024).
Companies already working with the Ministry
The Ministry said it has received applications from a number of affected businesses seeking to regularise their operations through measures including localisation, restructuring and other forms of compliance.
Applications from companies that have formally engaged with the Ministry and begun the relevant process are currently under review.
These companies will be allowed to complete any outstanding requirements within the timeframe provided by the Ministry and in accordance with directions issued during the compliance process.
Companies that have not engaged with the Ministry
Companies that have not submitted a transition application or otherwise engaged with the Ministry by the end of the transition period will receive formal notices from the Ministry under the Foreign Investment Act.
The companies will then be required to take the necessary steps within the period specified in their respective notices. This may include ceasing business activities that are not permitted under the FIER.
The Ministry warned that failure to comply with the requirements or directions could constitute a violation under Section 23 of the Foreign Investment Act and result in enforcement action under Sections 24 and 25.
Localisation must involve substantive ownership transfer
The Ministry also outlined additional scrutiny for companies seeking to remain in the affected sectors through localisation.
Companies will have to demonstrate that their proposed ownership structure meets the FIER, including showing that any transfer of shares results in meaningful and substantive Maldivian ownership and participation in the business.
Beyond the standard requirements for transferring shares, companies may be required to provide information and supporting documents concerning the proposed transaction.
The Ministry may assess the nature and extent of the ownership transfer, payment arrangements, source of funds, financing, beneficial ownership and effective control.
It will also examine whether the foreign shareholder or related parties retain any continuing rights or interests, as well as the role and participation of the incoming Maldivian shareholders.
The Ministry said detailed requirements and procedures for such share transfers will be issued separately.
The assessment is intended to ensure that localisation represents a genuine transfer of ownership and participation, rather than a nominal change in shareholding made solely to meet the requirements.
The Ministry urged all affected companies that have not yet engaged with the authorities to do so without delay, stressing that the end of the transition period marks the start of the applicable compliance and enforcement process.
