Special Economic Zones (‘SEZ’) Incentives

SEZ regulations are introduced to encourage large scale investments of economic significance in the country. SEZ investments are eligible for certain tax and regulatory incentives, which are available to developers of SEZ infrastructure as well as to investors in SEZ with a minimum investment of at least USD 100 million.

The following incentives are provided to a developer who establishes the infrastructure of an SEZ and provides basic services in an SEZ:

Exemption from business profit tax (‘BPT’);
Exemption from GST for the first 10 years of the SEZ;
Exemption from payment of withholding tax (‘WHT’) for the first 10 years; and
Tax relief and tax credits under specific guidelines.

The following incentives are available to investors, investments, and businesses in an SEZ:

Exemption from BPT;
Exemption from GST;
Exemption from WHT payments;
Flexible procedures in foreign employment;
Exemption from taxes on sale and purchase of land; and
The option of acquiring freehold land by registered companies in the Maldives, subject to certain conditions.

The specific duration of the exemption depends upon the industry sector and scale of investment, for e.g., the tourism sector enjoys the following incentives:

Exemption from BPT for the first 2 years;
Exemption from GST for the first 2 years; and
Exemption from WHT payments for the first 2 years.

The following activities are eligible for SEZ incentives:

Export-oriented manufacturing activities;
Transshipment ports, international logistics, ports, airports, bulk-breaking, bunkering, and docking services;
Universities, tertiary hospitals, specialty hospitals, and world-class research and development facilities;
World-class information and communication technology (ICT) parks and ICT-related facilities;
International financial services and international trade centers;
Renewable energy;
Introduction of technology that is new to the Maldives;
Food security; and
Gas exploration activities.

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