Circular CN-BSD/2020/1: Facilitation of Inward Investment Accounts — MMA — MV

بسم الله الرحمن الرحيم

MALDIVES MONETARY AUTHORITY
MALDIVES

Circular no: CN-BSD/2020/1

5th January 2020

To: All Commercial Banks

Dear Sirs,

Facilitation of Inward Investment Accounts (IIAs)

Currently banks in Maldives do not open accounts for foreigners if they do not hold a valid visa, and for foreign businesses if they are not registered in the Maldives. However, there is no restriction on opening such accounts.

In this regard, the Capital Market Development Authority and Maldives Stock Exchange have approached the MMA to facilitate opening of bank accounts by non-residents for the purpose of investing in the capital market.

Since such foreign investments can support growth and economic development, this circular provides conditions to open and maintain special accounts for inward investments, ‘Inward Investment Accounts (IIAs)’ to enable eligible investors residing outside the Maldives to route funds for permitted investments in the Maldives.

Banks are reminded that the board of directors and senior management have the ultimate responsibility to ensure that the framework of policies and procedures to open and maintain IIAs is in accordance with the relevant laws and regulations, in particular the Regulation on Prevention of Money Laundering and Financing Terrorism.

I. Eligible Investors

(a) An individual not holding a Maldivian National Identity Card or Passport.
(b) A Maldivian national/citizen resident outside the Maldives (c) A Company incorporated outside Maldives.

II. Permitted Investments through IIAs

(a) securities issued by the government of the Maldives; (b) all classes of shares or an entitlement to shares issued by Companies incorporated in Maldives and listed in the Maldives Stock Exchange;

All transactions specified above shall be made through IIA opened and maintained with a bank in the Maldives, and all income received from such investments and proceeds of disposal, liquidation, and maturity of the investments shall be credited to the IIA through which the investment was made.

III. Permitted Transactions through IIAs

IIAs may be opened and maintained as non-interest-bearing Current Accounts (without cheque book) in Maldivian Rufiyaa or any foreign currency that is acceptable to the bank.

a) Inward remittances in foreign currency received from outside Maldives in favour of the account holder for the purpose of investing in permitted investments under part II. The remitter and beneficiary should be the same person/account holder. b) Physical cash deposits in IIAs are prohibited. c) Credit to the IIA should be restricted to dividends, sale or maturity proceeds, share buyback and any other related income received for permitted investments under part II. d) Debit of the IIA should be limited to investment purchases and international outward transfers to the other accounts of the account holder. e) Outward transfers from the IIA should only be in favor of the account holder. f) Physical cash withdrawals from IIAs are prohibited.

IV. Due diligence requirements

Banks are required to exercise reasonable care to verify that a person seeking to open an IIA is eligible to open and maintain such an account, and also follow adequate due diligence in all transactions. This includes, but is not limited to the following:

Carry out enhanced KYC (Know-Your-Customer) and KYCB (Know-Your Customer-Business) processes. This should include adequate procedures for verifying the identity of non-face-to-face customers;
Obtain relevant documents as deemed fit to verify and establish the purpose for opening the account, and the source of funds for transactions routed through the IIA;

Yours sincerely,

[Signature]

Mariyam Shifa
Assistant Governor, Financial Stability