Amendment to lower resort lease extension fees ratified

President Mohamed Muizzu ratified a bill on Thursday to amend the Tourism Act, introducing changes that allow resorts to extend their leases by paying a reduced fee.

Previously, the Tourism Act permitted the extension of resort or integrated resort leases for an additional 49 years, provided certain conditions were met. These conditions included the payment of any outstanding rent, penalties, taxes, or fees to the government, excluding rent and penalties deferred under an agreement with the tourism ministry.

The 10th amendment to the act, passed on December 27, 2020, had set the following requirements for lease extensions:

• A lump sum payment of $5 million for extensions up to 49 additional years, if paid within the first two years from December 27, 2020. After this period, the fee increased to $10 million.
• For extensions up to 50 years, a payment of $200,000 per year of extension if agreed upon after two years from the effective date.

With the new amendment ratified on Thursday:

• Resorts can now pay a lump sum of $5 million as an extension fee within six months of the amendment’s effective date for extensions up to 49 additional years. After this six-month period, the fee will revert to $10 million.
• For lease extensions up to 50 years, resorts must pay $200,000 per year of extension within six months, with the same amount due after the six-month window.

This amendment provides resorts a six-month window to secure lease extensions at the lower fee of $5 million instead of $10 million.