New Foreign Currency Regulation (2024/R-91)

On 1st October 2024, the Maldives Monetary Authority (MMA) introduced the Regulation on Foreign Currency (2024/R-91) to regulate foreign currency transactions. This new regulation repeals  the previous   Monetary Regulation in effect from 1st March 1987 and brings several important changes. 

Key Changes and Requirements

1. Mandatory Registration with MMA

All tourism service providers must register with the Maldives Monetary Authority (MMA) latest by 30th October 2024. This registration is mandatory for both existing and new service providers. Newly registered businesses must complete their registration within 30 days from the date of their registration with the Maldives Inland Revenue Authority (MIRA). For registration, tourism service providers can access the MMA Foreign Exchange Registration Portal

2. Foreign Currency Exchange Requirements

The new regulation mandates that all tourism service providers maintain a foreign currency bank account with a licensed bank in the Maldives. Under this requirement, businesses must transfer or deposit their monthly realized sales proceeds in foreign currency into this account by the 28th day of the third month following the month in which the income was received.
Additionally, the regulation has introduced specific foreign currency exchange obligations based on the type of establishment: 

• Category A Establishments: This category includes tourist resorts, integrated resorts, resort hotels, and tourist vessels. These businesses are required to exchange USD 500 for each tourist they accommodate. 

• Category B Establishments: This category includes tourist guesthouses and hotels with fewer than 50 rooms. These businesses are required to exchange USD 25 per tourist. 

If a tourism establishment believes that exchanging the required USD amount under Category A or Category B would result in insufficient funds to meet the obligations listed below, they may submit a request to the MMA explaining their situation. If the MMA finds the request reasonable, they may reduce the required amount to be exchanged.

• Tax payments payable in foreign currency.
• Debt payable to financial institutions in foreign currency.
• Payments mandated by court orders in foreign currency.
• Other foreign currency payments approved by MMA.

3. Reporting Requirements

To ensure compliance and transparency, the regulation sets forth detailed reporting obligations for tourism service providers. These include:

• Monthly Sales Reports: Service providers must submit a report on the sales of tourism goods and services by the 28th of the following month.
• Foreign Currency Deposit/Transfer Reports: Service providers must submit a report on deposits or transfers of sales proceeds, after the deposit or transfer is made.
• Monthly USD Sale Reports (Category A & B): A report on the amount of USD exchanged per tourist must be submitted within 10 working days of the following month.

4. Penalties for Non-compliance

Non-compliance with the new registration, foreign currency exchange, or reporting requirements can result in significant financial penalties. Depending on the type and severity of the violation, fines may range from MVR 5,000 to MVR 1,000,000, as specified under Section 40 of the Maldives Monetary Authority Act.