Investment opportunities in Maldives

The Maldives offers many destinations that will attract the interest of foreign investors. The island nation boasts a transparent and stable legal system and a relatively high degree of political stability, as well as high economic growth over the past 15 years.

Main sectors for investment

Tourism

The tourism sector is the largest contributor to the Maldives' economy, accounting for more than a quarter of national income. The Maldives is one of the top performing tourism destinations in the world. The tourism sector has grown at a rapid pace since the industry's inception in 1972. Tourist arrivals are expected to rise sharply by 2025, when global tourism is forecast to recover. The Velana International Airport expansion project will be completed in 2023.

The government has added 35,000 new guest beds to the sector in 2023, with the focus of this expansion being on diversification and localization.

Investments range from expensive projects based on the “one island” concept — one resort", marinas, luxury hotels to relatively small guest houses that are now open to foreign investors. Investments that will expand cultural and health tourism, ecotourism, and adventure tourism are welcomed. Tourism real estate offers great potential for foreign investors, including the development of integrated tourism development projects, holiday homes and private islands. The biosphere reserves and protected areas of the Maldives, with their rich and diverse marine and terrestrial fauna and flora and unique features, offer great potential for investment in ecotourism and research tourism.

Prospective investors also have the opportunity to invest in the tourism sector with the Maldives Fund Management Corporation (MFMC). MFMC will invest in luxury tourism establishments, city hotels and other real estate assets in the Maldives, including development projects such as private islands, holiday homes, floating residences, marinas and integrated tourism projects.

Opportunities are also open for investing in problematic tourism projects at different stages of development.

Environment

The Maldives is successfully addressing climate change through effective mitigation and adaptation solutions.

The country is a party to the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. And while its own greenhouse gas emissions are low, the government is committed to reducing emissions and using low-carbon growth as a means to achieve energy security, reduce pollution and demonstrate leadership in tackling the climate crisis.

The Maldives has embarked on an ambitious target to achieve net-zero emissions by 2030. To implement it, the government has launched a number of initiatives, such as the abolition of import duties on renewable energy sources and a tariff on the domestic use of renewable energy sources.

The Maldives is one of the lowest-lying island nations in the world, and many islands face some form of coastal erosion due to factors caused by human activity or climate change. Existing solutions to create hard infrastructure using rock boulders/sea walls are expensive and destroy the aesthetics of the islands.

Investment opportunities are available in coastal protection technologies with more environmentally friendly and sustainable software and hardware engineering solutions.

Renewable energy

Reducing dependence on imported fuel and investing in renewable energy sources is a key government priority to improve the country's energy security. The goal is to achieve 70% of peak energy demand from renewable energy sources and reduce dependence on oil.

Due to the high cost of diesel electricity in the Maldives, there is huge potential to reduce fuel consumption and CO₂ emissions through investment in solar electricity.

The country's energy needs have grown exponentially over the past three to four decades as a result of unprecedented economic growth in key sectors of the economy. Demand for energy production is expected to grow by 8.5% annually. The government encourages investment in renewable energy through independent power producer (IPP) licenses and the sale of electricity to utilities under power purchase agreements. Ground-mounted, rooftop or floating solar photovoltaic systems and other viable renewable energy technologies may be offered.

Potential investors can also partner with private sector organizations, including resort operators, to transition to renewable and smart energy solutions. There has been significant interest in the transition to renewable energy solutions in the Maldives, with installations growing at double-digit rates over the past five years, with average annual growth of 45-55%.

Waste management

The Maldives is seeking to establish regional waste management systems where generated waste is separated and waste volume is reduced through volume reduction equipment or the introduction of resource recovery at the source of waste.

Investment and commercial opportunities are open to provide innovative, environmentally friendly and low-cost waste management solutions that meet country requirements.

Current wastewater treatment technologies used in the Maldives are very expensive. Investment opportunities exist in wastewater treatment technologies that provide environmentally friendly and cost-effective solutions.

Fishing

Covering over 90,000 square kilometers of the vast Indian Ocean, the Maldives is a country made up of 1% land and 99% ocean. Fishing is the main economic activity on almost all inhabited islands and the largest source of employment for local residents. More than 20% of the Maldives' workforce is employed in the fisheries sector, and fish and fishery products account for more than 98% of the country's physical exports by quantity and value.

The tuna fishery in the Maldives is the most sustainable. All tuna are caught using rod and line, ensuring maximum large catches with zero bycatch. The government is seeking to create new connections and expand the international market for fish products. About 50% of tuna caught is currently exported to Thailand for processing, and most yellowfin tuna exports are exported to limited markets.

Potential investors can partner with this industry to purchase, process and export all types of tuna products. Investment opportunities are open for the development of fishery complexes, including canneries and cold storage warehouses, as well as enterprises for the export processing of yellowfin tuna. Foreign investors are also welcome to establish trade linkages for the existing fish processing sector, especially fresh yellowfin tuna and canned tuna, which are popular fish products in international markets.

The country also has enormous potential for the development of mariculture, and this is a key priority for the diversification of the fishing industry. Mariculture of some valuable and endangered reef resources, such as groupers, sea cucumbers and giant clams, has been successfully demonstrated worldwide.

The Maldives also welcomes investment in research and development in the culture of coral reef organisms, either as stand-alone activities or in combination with commercial mariculture operations, aquafarms or related support facilities.

Agriculture

Given the high demand for quality agricultural products in the tourism sector and the overall trend towards healthy consumption, agribusiness in the Maldives has great potential for growth. Expansion and development of the sector is a priority of the country's leadership.

The government's strategy to develop the agricultural sector includes strengthening agricultural value chains and farmers' productive capacity, enhancing the role of agriculture in food security, introducing sustainable agricultural practices, strengthening institutional coordination, policy and regulatory frameworks for the sector, and strengthening research alternative agricultural technologies.

Most agricultural products are used for local consumption on the islands and atolls. A significant amount of the harvest is sent to Male where it is sold for local consumption or at tourist resorts and other tourist sites. Several commercial agricultural islands operate successfully, serving mainly the tourism sector.

The government's goal is to create medium production capacity and identify value-added crops and animals, develop urban agricultural models for the cultivation of edible crops and aesthetic plants (flowering, medicinal and aromatic plants), increase the production of traditional crops for nutrition and the production of selected crops to achieve self-sufficiency and reduce imports.

The Farm Islands grow a wide range of local produce that has the potential to invest in conservation and value enhancement through post-harvest processing, packaging and branding technologies, allowing for scalability and supply to new markets at higher prices.

The country is also open to partnerships that can introduce crop improvement technologies and new, adapted post-harvest technologies for processing local fruits and vegetables (mango, coconut, papaya and chilli).

There are opportunities to invest in developing market infrastructure, such as modern storage facilities, that will address food safety and hygiene issues, reduce waste and improve profitability in the agricultural value chain.

Opportunities are available for investors to develop commercial poultry and livestock farming on selected islands to serve the lucrative tourism sector and the rapidly growing domestic market, which is currently served by imports.

The geography of the Maldives requires a complex transport mechanism to develop and maintain agriculture as a possible economic activity. There are opportunities to invest in the creation of a mobile marketing and ferry service, Agri-Boat, which will link producers to markets using purpose-built transport vessels.

Real estate and infrastructure

The construction sector in the Maldives is experiencing growth in production volumes, mainly due to the government's investment program. It includes large-scale infrastructure projects throughout the country in various fields such as civil engineering, transport, medicine and industry. The boom in the construction sector has also been fueled by the growth of housing projects in both the public and private sectors.

The total resident population of the Maldives is approximately 519,438 people (as of early 2024). The population is expected to increase to almost 650,000 by 2028, with around 30,000 more homes required to be built.

Key policy priorities in the housing and real estate sector include increasing housing affordability through increased supply, and the provision of social housing through institutional and legal reforms. Other priorities focus on improving housing affordability through access to finance and savings schemes, and promoting decentralized housing provision across the atolls.

Investment opportunities in this sector include the construction and purchase of housing stock, the development and renovation of existing resorts in addition to key infrastructure development projects.

Urban regional development

Urban regional development is a key component of the national development programme. Regional development programs include many projects such as land reclamation, road network development, housing projects, residential areas, business districts, ports, public services, youth centers, nature reserves and others.

The National Development Plan includes the creation of a transshipment port and free zone under a long-term public-private partnership model in the north of the country. The planned integrated development includes bunkering, maritime security, warehousing, packaging, processing, manufacturing and real estate facilities.

The island of Hulhumale symbolizes the country's desire for modernization and dynamic economic development that the Maldives is experiencing today. It has been designed to offer a wide range of housing solutions that include a mix of affordable housing and luxury condominiums. The island provides a wide range of investment opportunities for the international investor. It is open to investment in real estate development, schools, hospitals, shopping centers, recreational and entertainment facilities, as well as a number of other commercial activities.

Banking and Finance

Expanding and strengthening banking services and infrastructure is an important element of the government's efforts to promote financial mechanisms that can effectively stimulate private and foreign investment in various sectors of the economy.

The expansion of the banking and finance sector also aims to fill gaps in areas such as SMEs and housing finance. Given the commitment to economic decentralization, there is a huge opportunity for investment banks and credit reporting agencies.

The Maldives welcomes the entry of new reputable conventional and Islamic banks and other good quality financial institutions to expand and create more competition in the market.

Investors can try to participate in the newly established Maldives Fund Management Corporation (MFMC) — 100% state-owned company created by presidential decree to increase strategic national investments.

The purpose of MFMC — seeking capital market solutions for strategic investments, as well as creating opportunities for local and foreign investors to benefit from investments in various sectors of the Maldivian economy.

MFMC fixed assets:

• Maldives Tourism Development Fund
• Maldives Renewable Energy Fund
• Maldives Infrastructure Fund

Additional funds planned to be launched:

• Maldives Private Equity Fund 
• Maldives Islamic Venture Capital Fund
• Maldives Foundation for the Development of Arts and Culture
• Maldives Small and Medium Enterprise Development Fund

Investors in banking and finance can also benefit from the Maldives' location in the Indian Ocean, where Islamic finance is still in its infancy.

The islands are an ideal location to establish a leading Islamic finance center in South Asia that can channel the savings of the Gulf Cooperation Council (GCC) countries and the Muslim population of South Asia.

The country is currently in the process of introducing an instant payment system as part of the Maldives Payment System Development (MPSD) project. This system will promote innovative, convenient access to digital financial services. The system infrastructure is planned in such a way that all banks and other payment service providers (PSPs) are linked to the Unified Payment Gateway (UPG) to facilitate real-time payments, 24/7/365, using smart addressing capabilities.

With the implementation of the MPSD project and the instant payment system, significant changes are expected in the payments industry as it will open a new window of opportunity for potential players to enter the industry by offering modern and innovative digital financial solutions.

Transport and logistics

As the country is an island nation, efficient sea and air transport is essential for the country's domestic and international connectivity to facilitate labor mobility, equal access to services and achieve the government's goals of regional development, decentralization and economic diversification.

The government plans to connect the islands with an integrated network of sea and air transport for passenger and cargo transport, create regional centers for trade through the development of international and regional ports and achieve the goal of economic diversification through the expansion of industries such as shipping, construction, docking and other maritime services.

The main prospects for investment in the transport sector include the development of transport and communication infrastructure, improvement of supply chains, and investment in other maritime assets.

As part of its strategic connectivity priorities, the Government is committed to creating sustainable, low-emission transport systems. With the country's focus on reducing carbon emissions in the transport sector, there is potential to implement an integrated, sustainable, low-emission transport system and reduce fossil fuel consumption.

Being one of the most famous tourist destinations in the region, the Maldives has huge potential to become a port of call for cruise ships crossing the Indian Ocean. Opportunities for the development of cruise terminals are open to foreign investors.

Opportunities are opening up for international shipbuilders to invest in regional and sub-regional shipbuilding facilities to meet growing domestic and international markets. Dry dock — another promising area open to foreign investors. Thanks to its strategic location in the Indian Ocean, dry docks will be able to serve not only local vessels, but also regional fleets.

The development of an integrated transport network is one of the government's top priorities. Opportunities are open for local and foreign investors to invest in the development of local air transport. There are currently 17 airports in the country. The government is open to attracting investors to develop the country's air transport infrastructure through the development of new domestic airports and the modernization of selected domestic airports to create new international airports. Investment opportunities are also opening up for the creation of seaplane centers to service resorts in various regions of the country.

Health area

The Government of the Maldives invites the private sector to participate in the development of the healthcare sector. In addition to expanding specialized healthcare facilities, the government is also committed to building and developing full-fledged hospitals in regional urban centres, national ambulance services, smart, digital health services and the proliferation of alternative forms of medical practice.

Investment opportunities in the health sector include the establishment of health centers to provide traditional medicine services, the development of mental health facilities, as well as nursing homes to care for the elderly.

Opportunities are also open for the creation of institutions for the treatment of developmental disorders, treatment centers for the disabled and the creation of drug rehabilitation centers.

Plastic surgery and diving medicine are also areas of the health sector that are open to foreign investment.

Information and communication technologies

The Maldives has seen rapid growth in the ICT sector over the past twenty years, mainly due to the investments made in the sector and the ability of the population to adapt to the rapid development of technology. Over the past twenty years, mobile phone services have completely transformed the telecommunications sector, allowing for unprecedented improvements in connectivity.

The growing acceptance and use of mobile data, coupled with the country's accessible ICT infrastructure, has transformed the social and economic landscape of the Maldives and offers opportunities to address development challenges posed by the state's unique spatial profile.

The Maldives is striving to keep up with the rest of the world. Progress in areas such as data centres, artificial intelligence and the internet is a key strategic priority for the government in shaping the Maldivian economy for the future. Investments in these areas are welcome.

The Maldives has the highest internet penetration rate in South Asia. Given the rapid shift towards modern technological solutions in the private and public sectors, as well as the country's young, tech-savvy population, an area that holds great promise for investment is training institutes and IT service centers.

Opportunities in this sector include the creation of modern technology education providers, STEM education centers and the development of modern IT parks with a combination of infrastructure, support services, office space and innovation centers.

For successful business and investment in this region, it is necessary to conduct a thorough analysis and assess all risks and opportunities. This work should be entrusted to appropriate specialists. One of these professional teams operating on the international market — this is Russian-Eurasian Business Broker (REAB).