Maldives proposes law amendment to reduce resort lease extension fees

The government has submitted a bill to parliament seeking to amend the Tourism Act, allowing resort lessees to extend their leases by paying a reduced fee. The bill was introduced by MP Abdulla Rasheed on behalf of the government.

Currently, Section 9(a) of the Tourism Act permits the extension of resort leases for an additional 49 years, provided that the lessee meets specific conditions. One of these conditions requires the lessee to settle all due payments, including rent, penalties, taxes, or fees owed to the government, except those deferred by the tourism ministry through an agreement.

The 10th amendment to the act, effective from December 27, 2020, requires resort operators to pay a $5 million fee within the first two years to extend the lease. Beyond this period, the extension fee increases to $10 million for a 99-year lease.

The proposed amendment to Article 9(a)(2) of the act seeks to modify the payment structure:

• A $5 million fee would need to be paid within six months from the amendment’s effective date.
• After this six-month window, the fee would rise to $10 million.

Under the current law, the opportunity to extend resort leases at the $5 million rate expired in December 2022. If the amendment is passed, resort operators would have an additional six months to extend their leases at the lower fee, instead of paying the higher $10 million amount.