Tuesday, August 20, 2024 On August 20, 2024, the Maldivian Parliament passed a significant amendment to the Tourism Act, resulting in a reduction of lease extension fees for islands and land plots designated for resort development. The amendment, introduced by MP Abdulla Rasheed of the Dhangethi constituency on behalf of the government, was approved unanimously with 76 votes in favor. Previously, the law required a fee of $200,000 per additional year for lease extensions, along with a substantial one-time extension fee of $10 million.
However, the newly passed amendment offers a more favorable payment structure for those who act quickly. If the payment is made within six months of the amendment’s enactment, the extension fee will be reduced by 50%. Specifically, lessees will pay $100,000 per additional year and a one-time fee of $5 million.
If payment is delayed beyond the six-month period, the original rates will apply, requiring $200,000 per year and a $10 million lump sum. This amendment provides lessees a six-month window to secure reduced fees, regardless of whether their resort is operational or if there are deferred lease rents and interest. Existing 50-year leases can be extended to 99 years by paying $5 million, while those extending for less than 50 years can benefit from the reduced annual fee of $100,000 if payment is made promptly.
This legislative change is expected to make lease extensions more financially manageable for resort developers and operators, poten.