Addu City will become the Maldives’ first dedicated zone for small and medium-sized enterprises (SMEs), with rent exemptions and income tax waivers for businesses operating there from 1 January 2027, President Dr Mohamed Muizzu has announced.
The President unveiled the plan on the evening of Saturday, 24 October, at the awards ceremony of Maldives Expo 2026, held at Barceló Nasandhura in Malé. He also outlined a wider package of tax and foreign currency measures for small businesses across the country, which he said would be rolled out over the coming months.
Three-Year Pilot in Addu
The Addu zone will run as a three-year pilot. According to the Ministry of Economic Development, Transport and Trade, businesses based in the zone will not pay rent on government-leased land during their first year, will receive income tax waivers, and will see their quota expanded from 20 to 30. Officials have not yet published the detailed eligibility criteria or the exact scope of the tax waivers.
The President said similar zones are planned for other parts of the country, with Addu serving as the first test. The stated aims of the scheme are to create jobs, stimulate economic activity and strengthen the economy of the southernmost city.
Higher GST Threshold and Duty-Free Raw Materials
Beyond Addu, the President announced several nationwide measures aimed at easing the tax burden on small businesses:
- The mandatory GST registration threshold is set to rise from MVR 1 million to MVR 1.5 million from 1 January, subject to amendments to the relevant law and regulations.
- Raw materials imported by SMEs for production will be zero-rated for import duty for five years from 1 January 2027, with legislative changes currently being prepared.
- SMEs will be able to offset money the government owes them against the taxes they owe the state. Where the government’s dues are higher, the business would pay no tax and could claim the difference.
The President said the measures were intended to remove obstacles to income growth and to encourage more people to start their own businesses and become self-reliant.
Easier Access to US Dollars
The package also targets the foreign currency difficulties faced by local producers. From 1 November 2026, Maldivian businesses will be able to receive US dollar payments from overseas buyers through the Bank of Maldives payment gateway, under an arrangement involving the bank, the trade ministry and the Business Centre Corporation (BCC). The same funds can be used to pay for goods and services bought from abroad, including subscriptions, through remittances and cards.
The second phase of the government’s youth loan scheme is also due to launch in November, according to the trade ministry, though no figures have been released.
The announcements came as Maldives Expo 2026 opened at Hulhumalé Central Park on 25 October. Organised by the trade ministry and BCC, the exhibition features 430 participants and more than 4,400 products across seven districts, and runs until 2 November.
Sources
- Ministry of Economic Development, Transport and Trade – President assures more favourable opportunities for SMEs within the next three months
- Ministry of Economic Development, Transport and Trade – President inaugurates Maldives Expo 2026
- The Edition – Addu to become SME zone with tax and rent concessions
- The Edition – Concessions for SMEs, taxes and subscriptions
- Atoll Times – Pres announces tax-free zones, tax relief for small businesses
