THE FIRST FOREX AMENDMENT

The Foreign Currency (First Amendment) Act has taken effect on 1 September 2026.

This First Amendment will change the following:

Conversion Threshold

1.       Conversion threshold for tourist resorts and other Category A Tourism Establishments will be 40% of gross proceeds of sales.

2.       Conversion threshold for tourist guesthouses and other Category B Tourism Establishments will be 20% of their gross proceeds of sales or USD 25 multiplied by number of tourists.

3.       Businesses earning foreign currency income (non-tourism, foreign owned) earning at least USD25m will convert 40% of gross proceeds of sales.

4.       Businesses earning foreign currency income (non-tourism, 100% Maldivian owned) earning at least USD25m will convert 7% of gross proceeds of sales.

Local Account

Law makes it mandatory for all proceeds of sales of parties bitten by the law to be deposited in an account at a bank operated in the Maldives under an MMA license.

Conversion Period

The conversion period is shortened to 30 days. Like proceeds of one month ought to be converted by the 28th day of next month.

Payment for supply of goods and services

This is a fundamental change brought about by the First Amendment.

What it means is this - if a business earning foreign currency income wants - to pay in USD for goods and services supplied to it - or accept payment in USD for goods and services it has supplied – this method of payment would need MMA approval.

Earlier, there was no need for a business earning foreign currency income to seek MMA approval to pay or accept foreign currency for goods and services. It was a permissible transaction under section 4 of the Foreign Currency Act. Now, making payment and accepting payment in USD for supply of goods and services is restricted – and can be carried out only with MMA approval.

If you have the Foreign Currency Act, you can look for section 4 of the Act, and specifically for item 9 on the list of permissible transactions / obligations.  That is the one that is now subject to MMA approval.

Any business earning foreign currency income will now have to apply for and get MMA approval if a transaction involves payment or acceptance of payment in foreign currency for any supply of goods or services. The process is to be provided for in regulations to be brought out by the MMA. 

Additional Matters

MMA also may specify other matters / obligations / transactions in their regulations which can be subjected to obtaining MMA approval.

That is now allowed by this First Amendment.

How did the First Amendment do that?

What the amendment did was to limit the operability of section 4 and transactions permitted by it by doing 3 minor adjustments: (i) make the whole of section 4 become section 4 (a); (ii) introduce a new subsection (b) to section 4; and (iii) state in that subsection 4 (b) that carrying out obligations contained in item 9 and item 15 on the list in section 4 (a) of the Act requires MMA approval.

Section 4 List

Item 9 of the list in section 4 (a) is on making or accepting payment in foreign currency for supply of goods and services.

Item 15 of the list in section 4 (a) is on any other obligation or transaction MMA my specify in their regulations made under the Act.

NB: Please seek independent advice on the scope and applicability of the First Amendment.