Maldives Monetary Authority Regulation on Foreign Currency

Regulation Number: 91R2024/

Request to publish the Rules and Procedures in the Gazette to: mv.gov.po@legalaffairs Office of the President Bodu Thakurufaanu Magu Malé, Maldives Phone: 3336211 Mobile: 7242885 Website: www.mv.gov.gazette Volume: 53 Number: 163 Date: 28 Rabeeul Awal 1446 – 1 October 2024 Tuesday Regulation on Foreign Currency

Volume: 53 Number: 163 Regulation Number: 91R2024/ Government Gazette of Maldives i

MALDIVES MONETARY AUTHORITY Malé Maldives

Regulation on Foreign Currency

TABLE OF CONTENTS

First Chapter .................................................................................................................................... 1 Introduction ............................................................................................................................................ 1 .1 Definition and Name .......................................................................................................................... 1 .2 Commencement and Repealed Regulations ............................................................................. 1 .3 Interpretation ................................................................................................................................ 1

Second Chapter ...................................................................................................................................... 3 Currency for Transactions .................................................................................................................. 3 .4 Currency for Transactions ............................................................................................................ 3

Third Chapter ................................................................................................................................... 5 Deposit and Sale of Income from Foreign Currency .......................................................................... 5 .5 Registration of Entities Active in the Tourism Sector .............................................................. 5 .6 Submission of Information on Income from Foreign Currency .......................................................................... 5 .7 Deposit of Income from Foreign Currency into a Bank Account ............................................................... 5 .8 Sale of Income from Foreign Currency ......................................................................................... 6 .9 Maintenance of Records ........................................................................................................................ 7

Fourth Chapter ................................................................................................................................. 7 Remedial Measures and Enforcement Measures ............................................................................................... 7 .10 Remedial Measures and Enforcement Measures ........................................................................................ 7

Volume: 53 Number: 163 Regulation Number: 91R2024/ Government Gazette of Maldives 1

Regulation on Foreign Currency

First Chapter Introduction

Definition and Name .1 (a) This is a regulation to determine transactions conducted in foreign currency in the Maldives for the purpose of implementing the Foreign Exchange Rate System, and to determine other policies related to the Foreign Exchange Rate. (b) This regulation has been drafted under Articles 24 and 38 of Act No. 6/81 (Maldives Monetary Authority Act 1981). (c) This regulation shall be known as the "Regulation on Foreign Currency".

Commencement and Repealed Regulations .2 (a) This regulation shall come into effect on 1 October 2024. (b) With the commencement of this regulation, the "Monetary Rules" dated 1 March 1987 are repealed.

Interpretation .3 Unless otherwise specified in this regulation, the following expressions and words are given the meanings set out below in conjunction with those expressions and words. (a) "Remittance Service Provider" refers to entities licensed to provide remittance services under Act No. 8/2021 (National Payment System Act). (b) "International Transaction" refers to transactions involving the transfer of foreign currency out of the country or into the country from abroad. (c) "Bank" refers to any entity licensed under Act No. 24/2010 (Banking Act of the Maldives). (d) "Foreign Currency" refers to the currency of any country other than the Maldives.

Volume: 53 Number: 163 Regulation Number: 91R2024/ Government Gazette of Maldives 2 (e) "Category A Tourism Establishment" refers to tourist resorts, integrated tourist resorts, resort hotels, hotels, tourist vessels, and other such places operating in the Maldives that are among the places where tourists paying the Green Tax under Act No. 2/99 (Tourism Act of the Maldives) arrive. (f) "Category B Tourism Establishment" refers to tourist guesthouses and hotels operating in inhabited islands among the places where tourists paying the Green Tax under Act No. 2/99 (Tourism Act of the Maldives) arrive, which have registered 50 (fifty) rooms or fewer. (g) "Insurance Company" refers to a company licensed by the Authority to conduct insurance business in the Maldives. (h) "Authority" refers to the Maldives Monetary Authority established under Act No. 6/81 (Maldives Monetary Authority Act 1981). (i) "Financing Company" refers to a company licensed by the Authority to conduct financing business in the Maldives. (j) "Person" refers to both natural persons and legal persons. (k) "MIRA" refers to the Maldives Inland Revenue Authority established under Act No. 3/2010 (Administrative Tax Act). (l) "Working Day" refers to any day that is not a government holiday. (m) "Entities selling tourism goods and providing tourism services" refers to entities providing goods and services defined as tourism goods and services in Act No. 10/2011 (Value Added Tax on Goods and Services Act). (n) "Tourism Goods and Services" refers to goods and services defined as tourism goods and services in Act No. 10/2011 (Value Added Tax on Goods and Services Act). (o) "Tourists" refers to foreigners holding tourist visas arriving in the Maldives.

Second Chapter Currency for Transactions

Currency for Transactions .4 (a) Except for the transactions specified in clause (d) of this Article, all transactions conducted in the Maldives must be conducted in Rufiyaa. These transactions include payment for goods and services, payment for labor, payment of fees and charges, payment of rent, and payment and receipt of wages. (b) It is prohibited to offer payment in any currency other than Rufiyaa for goods and services, labor, fees and charges, rent, and wages. (c) It is not prohibited under this regulation for any person to carry or hold foreign currency. (d) The following transactions are exempted from the transactions specified in clause (a) of this Article to be conducted in Rufiyaa. And the following transactions and matters are exempted from the prohibition specified in clause (b) of this Article.

Volume: 53 Number: 163 Regulation Number: 91R2024/ Government Gazette of Maldives 3 (1) Payment of money authorized to be paid to the Government or a state department in foreign currency under any law or regulation; and receipt of such money; (2) Transactions between banks and financing companies, and between these departments and their customers; (3) Transactions between remittance service providers and their customers; (4) Transactions between insurance companies and entities selling goods and providing services in the tourism sector, and between these companies and their customers, related to the sale of insurance policies; and transactions between insurance intermediaries and customers related to such policies; (5) International transactions; (6) Payment for goods sold to tourists and services provided to tourists in foreign currency; (7) Payment for the value of exported goods and services in foreign currency; (8) Payment for goods purchased and services obtained by a business earning income in foreign currency in foreign currency, if the business wishes to do so; and receipt of payment in foreign currency by the party selling the goods or providing the services; (9) Payment of dividends to shareholders by a business earning income in foreign currency, if the business wishes to do so; and other transactions between such a business and its shareholders; and transactions between such a business and other related parties; (10) Purchase and sale of shares in a business earning income in foreign currency; (11) Payment of salaries and benefits to employees of a business earning income in foreign currency in foreign currency, if the business wishes to do so; and receipt of salaries and benefits by employees in foreign currency; (12) Payment for goods sold to tourists and services provided by duty-free shops, and receipt of such payments from tourists.

Volume: 53 Number: 163 Regulation Number: 91R2024/ Government Gazette of Maldives 5

Third Chapter Deposit and Sale of Income from Foreign Currency

Registration of Entities Active in the Tourism Sector .5 (a) All entities registered with MIRA as entities selling tourism goods and providing tourism services at the time this regulation comes into effect must submit an application for registration to the Authority within 30 (thirty) days from the commencement of this regulation. (b) Entities registered with MIRA as entities selling tourism goods and providing tourism services after the date this regulation comes into effect must submit an application for registration to the Authority within 30 (thirty) days from the date of registration. (c) Applications for registration under clauses (a) and (b) of this Article must be submitted by completing the form designated by the Authority, along with the form or other information and documents specified by the Authority.

Submission of Information on Income from Foreign Currency .6 Entities selling tourism goods and providing tourism services must submit information to the Authority in the manner determined by the Authority, detailing the tourism goods sold or services provided during the month of [Month], before the 28th day of the following month.

Deposit of Income from Foreign Currency into a Bank Account .7 (a) Entities selling tourism goods and providing tourism services must transfer or deposit the total (realized sales proceeds) of foreign currency received during the month of [Month] into a foreign currency account opened at a bank before the 28th day of the third month following that month. For example, sales proceeds realized in October 2024 (regardless of when the sales occurred) must be transferred or deposited into a bank account by 28 January 2025. (b) Money deposited under clause (a) of this Article must be in US Dollars or other foreign currency authorized by the Authority. (c) Entities selling tourism goods and providing tourism services must submit information regarding the transfer or deposit of foreign currency to the bank as specified in clause (a) of this Article, along with other information and documents specified by the Authority, to the Authority in the manner determined by the Authority.

Sale of Income from Foreign Currency .8 (a) For a Category A Tourism Establishment, the total amount required for all tourists arriving during the month of [Month] at the rate of 500 (five hundred) US Dollars per tourist, must be sold by the entity operating the establishment to a bank in exchange for Rufiyaa before the 28th day of the third month following that month. (b) For a Category B Tourism Establishment, the total amount required for all tourists arriving during the month of [Month] at the rate of 25 (twenty-five) US Dollars per tourist, must be sold by the entity operating the establishment to a bank in exchange for Rufiyaa before the 28th day of the third month following that month. (c) If an entity operating a Category A Tourism Establishment or a Category B Tourism Establishment has sold foreign currency in the amount specified in clause (a) or (b) of this Article, and it is stated that the entity does not have the foreign currency required to fulfill the obligation or liability specified below, the Authority may grant permission to sell a lesser amount than specified in clause (a) or (b) of this Article, provided the Authority accepts that the amount is not available.

Volume: 53 Number: 163 Regulation Number: 91R2024/ Government Gazette of Maldives 6 (1) Taxes payable in foreign currency; (2) Debts payable in foreign currency to a financial institution; (3) Liabilities for foreign currency determined to be paid in a court order; Or (4) Other liabilities for foreign currency authorized by the Authority. (d) Applications for permission from the Authority under clause (c) of this Article must be submitted with details of the liabilities payable in foreign currency, along with other information and documents specified by the Authority. (e) 60% (sixty percent) of the foreign currency received by each bank per week under clause (a) or (b) of this Article must be sold by the bank to the Authority before Wednesday of the following week. (f) Each bank must submit details of the foreign currency received during the month to the Authority in the manner determined by the Authority within the period determined by the Authority. (g) Entities operating Category A Tourism Establishments and Category B Tourism Establishments must submit details of the foreign currency sold to the bank during the month, along with other information specified by the Authority, to the Authority within 10 (ten) working days after the end of that month, in the manner determined by the Authority.

Maintenance of Records .9 Entities selling tourism goods and providing tourism services must maintain information and documents regarding the tourism goods and services of these entities, as determined and notified by the Authority, for a minimum period of 5 (five) years from the date the good or service was sold.

Fourth Chapter Remedial Measures and Enforcement Measures

Remedial Measures and Enforcement Measures .10 (a) If any person violates Article 4 of this regulation, that person may be fined an amount between 10,000/- (ten thousand) Rufiyaa and 1,000,000/- (one million) Rufiyaa, as specified in clause (b) of Article 24 of Act No. 6/81 (Maldives Monetary Authority Act 1981). (b) If any person violates any of the Articles from Article 5 to Article 9 of this regulation, that person may be fined an amount between 5,000/- (five thousand) Rufiyaa and 1,000,000/- (one million) Rufiyaa, as specified in clause (c) of Article 40 of Act No. 6/81 (Maldives Monetary Authority Act 1981). Additionally, in the case of fines, the Authority may determine an amount not exceeding 5,000/- (five thousand) Rufiyaa for each day the violation continues until the violation is remedied or the required actions are taken.

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