Foreign Currency Act

Law Number: 32/2024

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Volume: 53 Number: 228 Date: 13 Jumada al-Akhirah 1446 – 14 December 2024 Friday

Foreign Currency Act

On Friday, 12 December 2024, the "Bill on Foreign Currency" passed by the 60th session of the 20th People's Majlis was, pursuant to Article 92 of the Constitution, signed by the President of the Republic on Friday, 14 December 2024 (13 Jumada al-Akhirah 1446), thereby becoming an Act, and is hereby published in the Government Gazette today.

Volume: 53 Number: 228 Government Gazette of the Maldives 3

Law Number 32/2024:
Foreign Currency Act

Table of Contents

First Chapter
Introduction

1. Definition and Name 5
2. Purpose 5

Second Chapter
Means of Conducting Monetary Transactions in the Maldives
3. Transactions in Rufiyaa 5
4. Transactions in Foreign Currency 6
5. Prohibition on Requiring Maldivians to Pay in Foreign Currency 8

Third Chapter
Foreign Currency
6. Foreign Currency 8

Fourth Chapter
Deposit of Income from Foreign Currency
7. Deposit of Foreign Currency Income into a Bank Account 9
8. Provision of Information by Government Departments 9

Fifth Chapter
Partial Conversion of Income from Foreign Currency into Rufiyaa
9. Entities Required to Sell Foreign Currency 11
10. Partial Conversion of Income from Foreign Currency 11
11. Exempted Entities and Circumstances from Selling Foreign Currency 13
12. Review of the Amount of Foreign Currency to be Sold 13
13. Sale of Foreign Currency Sold to Banks to the Authority 14

Sixth Chapter
Matters of Violators and Taking Measures
14. Power to Review Matters of Violators 15
15. Measures Against Violators 15
16. Suspension of Licenses for Non-Payment of Fines 17
17. Recovery of Fine Money 17

Seventh Chapter
Miscellaneous
18. Registration with the Authority 18
19. Submission of Information and Maintenance of Records 19
20. Responsibilities and Powers of the Authority 20
21. Confidentiality 20
22. Transitional Arrangements 21
23. Repeal of Laws and Regulations 22
24. Making and Implementing Regulations 23
25. Commencement of Implementation of the Law 23
26. Interpretation 23

Volume: 53 Number: 228 Government Gazette of the Maldives 5

Law Number 32/2024:

Foreign Currency Act

First Chapter
Introduction

Definition and Name

1. (a) This is a law that determines the transactions that can be conducted in foreign currency in the Maldives, establishes procedures for depositing and selling income earned by businesses from foreign currency into banks, and clarifies other matters related to foreign currency.
   (b) This Law shall be known as the "Foreign Currency Act".

Purpose
2. The main purposes of this Law are stated below:
(a) Facilitating the manner in which foreign currency is received in the Maldives; (b) Determining the transactions that can be conducted in foreign currency in the Maldives, including transactions conducted through bank accounts; (c) Establishing procedures for depositing income earned by businesses from foreign currency into a bank account; and (d) Establishing procedures for the partial conversion of income earned from foreign currency into Rufiyaa.

Second Chapter
Means of Conducting Monetary Transactions in the Maldives

Transactions in Rufiyaa
3. (a) Until otherwise specified in this Law or any other Law, all monetary obligations or transactions conducted in the Maldives shall be proposed and paid in Rufiyaa.
(b) Except for transactions specified in this Law or any other Law as permissible to be conducted in foreign currency, proposing or paying any monetary obligation or transaction in foreign currency in the Maldives is prohibited.

Transactions in Foreign Currency
4. Notwithstanding the specification in Article 3 of this Law, the following obligations and transactions may be proposed and paid in foreign currency:
(a) Payment of money authorized by Law or Regulation to be paid to the Government or a government department in foreign currency, and the acceptance of such money; (b) Transactions conducted between banks and financing companies, and between these institutions and their customers; (c) Transactions conducted between remittance service providers and their customers; (d) Transactions conducted between insurance companies, entities selling property in the tourism sector, service providers, and their customers related to insurance policies sold by these companies, transactions between insurance intermediaries and customers related to such policies, and other transactions conducted by insurance companies as determined by regulations made under this Law; (e) Transactions conducted in the securities market of the Maldives; (f) International transactions; (g) Acceptance of prices for goods sold to tourists and services provided to tourists in foreign currency; (h) Acceptance of prices for exported goods and services in foreign currency; (i) If a business earning income in foreign currency wishes to pay for goods purchased and services obtained in foreign currency, and the party selling the goods or providing the services accepts payment in foreign currency; (j) If a business earning income in foreign currency wishes to pay dividends to shareholders, conduct other transactions between the business and its shareholders, and conduct transactions between such businesses and other related parties; (k) Purchase and sale of shares in a business earning income in foreign currency, issuance of bonds or sukuk by such businesses, and transactions between such businesses and bond or sukuk holders; (l) If a business earning income in foreign currency wishes to pay salaries and benefits to employees in foreign currency, and employees accept salaries and benefits in foreign currency; (m) Acceptance of prices for goods sold to tourists and services provided by duty-free shops in foreign currency, and tourists paying these prices in foreign currency; (n) Obligations to pay foreign currency determined in judgments or orders of a Sharia court, decisions of a tribunal, or decisions made under dispute resolution systems such as arbitration; (o) Other obligations and transactions determined by regulations made under this Law.

Prohibition on Requiring Maldivians to Pay in Foreign Currency
5. Notwithstanding that Article 4 of this Law specifies that proposing and paying obligations and transactions in foreign currency is permissible, except for matters determined by the Government and government and financial departments to conduct transactions in foreign currency in accordance with the Law, no Maldivian shall be required to pay for goods purchased and services obtained in the Maldives in foreign currency.

Third Chapter
Foreign Currency

Foreign Currency
6. (a) For the purposes of this Law, "foreign currency" refers to the currency of any country other than the Maldives.
(b) It is permissible to bring foreign currency into the Maldives, remove foreign currency from the Maldives, carry and use foreign currency in the Maldives, and invest in foreign currency in the Maldives, in accordance with the Law. (c) It is permissible to open and use a foreign currency account in a bank as determined by that bank.

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Fourth Chapter
Deposit of Income from Foreign Currency

Deposit of Foreign Currency Income into a Bank Account
7. (a) The realized sales proceeds in foreign currency received within a calendar month for goods sold or services provided by the following entities shall be transferred or deposited into a foreign currency account opened in a bank before the 28th (twenty-eight) day of the third month following that month:
(1) Entities selling property and providing services in the tourism sector; and (2) Entities other than those specified in paragraph (a)(1) of this Article and financial departments, which receive an amount equivalent to at least 15,000,000.00 (fifteen million) US Dollars in foreign currency for goods sold or services provided within the past calendar year. (b) The foreign currency deposited under paragraph (a) of this Article may be deposited into any foreign currency account opened by the bank accepting the deposit, and into any foreign currency account authorized by the Authority.

Provision of Information by Government Departments
8. (a) Unless otherwise specified in another Law, upon request by the Authority for information necessary to enforce this Law and for information and accounts of entities specified in Article 7 of this Law to achieve the purposes of this Law, the relevant parties shall provide such information to the Authority to the extent necessary.
(b) Upon the commencement of implementation of this Law, the Ministry of Tourism shall share with the Authority information regarding tourist resorts, integrated tourist resorts, private islands, resort hotels, tourist vessels, tourist hotels, tourist guesthouses, and other such places registered under Law Number 2/99 (Tourism Act of the Maldives) within one (1) month from the date of commencement of implementation of this Law. (c) After the commencement of implementation of this Law, the Ministry of Tourism shall share with the Authority information regarding tourist resorts, integrated tourist resorts, private islands, resort hotels, tourist vessels, tourist hotels, tourist guesthouses, and other such places registered under Law Number 2/99 (Tourism Act of the Maldives) within one (1) month from the date of registration of such place. (d) Unless otherwise specified in another Law, the Registrar of Companies Authority shall share with the Authority information necessary for the Authority to enforce this Law. (e) Any information received by the Authority under paragraphs (a), (b), (c), and (d) of this Article shall not be used for any purpose other than enforcing this Law and achieving its purposes.

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Fifth Chapter
Partial Conversion of Income from Foreign Currency into Rufiyaa

Entities Required to Sell Foreign Currency
9. The entities required to fulfill the obligation to sell foreign currency as specified in Article 10 of this Law are stated below:
(a) "Category A Tourism Establishment": This category includes tourist resorts, integrated tourist resorts, private islands, resort hotels, and other such places operating in the Maldives and registered under Law Number 2/99 (Tourism Act of the Maldives). (b) "Category B Tourism Establishment": This category includes tourist vessels, tourist hotels, and tourist guesthouses registered under Law Number 2/99 (Tourism Act of the Maldives). (c) Entities other than those specified in paragraphs (a) and (b) of this Article and financial departments, which have received an amount equivalent to at least 15,000,000.00 (fifteen million) US Dollars in foreign currency for goods sold or services provided within the past calendar year.

Partial Conversion of Income from Foreign Currency
10. (a) Category A Tourism Establishments shall sell an amount of foreign currency determined by the establishment operating the establishment, chosen from the following two methods, to a bank in Rufiyaa:
(1) An amount equivalent to 500.00 (five hundred) US Dollars per tourist arriving at the establishment in a calendar month, multiplied by the total number of tourists arriving in that month; or (2) 20% (twenty percent) of the gross sales in foreign currency of the establishment in a calendar month. (b) Category B Tourism Establishments shall sell an amount of foreign currency determined by the establishment operating the establishment, chosen from the following two methods, to a bank in Rufiyaa:
(1) An amount equivalent to 25 (twenty-five) US Dollars per tourist arriving at the establishment in a calendar month, multiplied by the total number of tourists arriving in that month; or (2) 20% (twenty percent) of the gross sales in foreign currency of the establishment in a calendar month. (c) Entities specified in paragraph (c) of Article 9 of this Law shall sell 20% (twenty percent) of the gross sales in foreign currency for goods sold or services provided in a calendar month to a bank in Rufiyaa. (d) The amount of foreign currency required to be sold to the bank for each calendar month under paragraphs (a), (b), and (c) of this Article shall be completed and sold before the 28th (twenty-eight) day of the third month following that month.

Exempted Entities and Circumstances from Selling Foreign Currency
11. (a) For the purposes of paragraph (1) of Article 10(a) and paragraph (1) of Article 10(b) of this Law, the following entities shall not be included in counting tourists arriving at the tourism establishment:
(1) Tourists who have not stayed for more than 24 (twenty-four) hours in the tourism establishment; (2) Children under the age of 12 (twelve) among tourists; (3) Entities staying free of charge or complimentary in the tourism establishment; (4) Guests granted special privileges by the Government. (b) Tourist vessels operating outside the Maldives and registered outside the Maldives among the tourist vessels specified in paragraph (b) of Article 9 of this Law are exempted from this Law.

Review of the Amount of Foreign Currency to be Sold
12. (a) Entities specified in Article 9 of this Law, after calculating the amount of foreign currency required to be sold as specified in Article 10 of this Law, if they have sold the foreign currency to that extent and demonstrate to the Authority that they do not have the foreign currency required to fulfill the obligation(s) specified below, and if the Authority accepts that they do not have that amount of foreign currency, the Authority may grant permission to sell a lesser amount than specified in Article 10 of this Law for periods determined by the Authority:
(1) Taxes to be paid in foreign currency and obligations to be paid to the Government in foreign currency; (2) Debts to be paid in foreign currency to foreign financial institutions operating in or outside the Maldives; (3) Obligations to pay foreign currency determined in judgments or orders of a Sharia court, decisions of a tribunal, or decisions made under dispute resolution systems such as arbitration; or (4) Other foreign currency obligations permitted by the Authority. (b) Requests for permission from the Authority under paragraph (a) of this Article shall be submitted with details of obligations to be paid in foreign currency and other information and documents determined by the Authority.

Sale of Foreign Currency Sold to Banks to the Authority
13. (a) From the foreign currency received by a bank under Article 10 of this Law, a specific percentage determined by the Authority shall be sold by the bank to the Authority within a period determined by the Authority.
(b) Details of foreign currency received by a bank in a month under Article 10 of this Law shall be submitted by the bank to the Authority within a period determined by the Authority and in a manner determined by the Authority.

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Sixth Chapter
Matters of Violators and Taking Measures

Power to Review Matters of Violators
14. (a) The Authority has the power to review matters of entities appearing to have violated this Law and regulations made under this Law, matters of entities appearing to have misled accounts and information in performing required tasks under this Law, and matters of entities violating directives issued by the Authority under this Law, and to take measures.
(b) The powers granted to the Authority and the procedures to be followed in reviewing matters reviewed by the Authority under paragraph (a) of this Article shall be specified in regulations made under this Law.

Measures Against Violators
15. (a) The Authority has the power to fine entities that do not transfer or deposit foreign currency into a foreign currency account opened in a bank as specified in Article 7 of this Law, and entities that do not deposit the specified amount, up to an amount not exceeding 0.25% (zero point two five percent) of the foreign currency required to be deposited for that month. Furthermore, in such fines, if the Authority finds it necessary, it may fine the entity up to an amount not exceeding 0.25% (zero point two five percent) of the foreign currency required to be deposited for that month for each day that passes until the violation is rectified or the required actions are taken.
(b) The Authority has the power to fine entities that do not sell foreign currency into Rufiyaa or do not sell to the specified amount as specified in Article 10 of this Law, up to an amount not exceeding 0.5% (zero point five percent) of the foreign currency required to be sold for that month. Furthermore, in such fines, if the Authority finds it necessary, it may fine the entity up to an amount not exceeding 0.5% (zero point five percent) of the foreign currency required to be sold for that month for each day that passes until the violation is rectified or the required actions are taken. (c) Except for matters specified in paragraphs (a) and (b) of this Article, the Authority has the power to fine entities violating this Law, regulations made under this Law, or directives issued by the Authority under this Law, with an amount between 10,000 (ten thousand) Rufiyaa and 1,000,000 (one million) Rufiyaa, considering the severity of the act committed. (d) In fines imposed under paragraphs (a) and (b) of this Article, the Authority has the option to impose fines in foreign currency.

Suspension of Licenses for Non-Payment of Fines
16. If an entity fined by the Authority under this Law does not pay the fine within 90 (ninety) days from the date directed by the Authority to pay the fine, the Authority has the power to direct the relevant government department to suspend the business licenses granted by government departments to such entities for a specific period as determined by regulations made under this Law.

Recovery of Fine Money
17. (a) If an entity fined by the Authority under this Law does not pay the fine, in addition to taking measures against such entities as specified in Article 16 of this Law, the Authority has the power to recover the fine money by submitting the matter to the judiciary.
(b) This