The introduction of a new duty-free zone at the commercial port of Kulhudhuffushi to complement the expansion of its services will significantly boost the re-export trade, the Minister of Economic Development and Trade Mohamed Saeed has said.
The move seeks to capitalise on the port's strategic location, which was developed around two decades ago but has faced operational challenges that hindered its full utilisation. The expansion is a key part of the government's vision to decentralise economic activity and establish regional logistics hubs across the country.
Operated by Maldives Ports Limited (MPL), the upgraded port introduces four new services that will transform its function from a basic import hub into a multi-faceted logistics centre for the northern atolls of Haa Alifu, Haa Dhaalu, Shaviyani, and Noonu. The new offerings include:
Duty-free freight service (bonded zone): A dedicated area for storing goods without paying duty upon arrival. Duty is only levied when goods are cleared for transport to other islands or for local consumption.
Bonded warehouse service: Specifically for resorts in the northern region, providing a secure space for restricted goods.
Domestic port services for offshore businesses: A special jetty for inter-island cargo distribution, improving supply chain efficiency within the northern region.
Bulk cargo handling services: Including a dedicated storage area for construction materials, such as stone and gravel.
Central to the expansion is the creation of a free zone to support re-export trade, the first of its kind designated under President Dr Mohamed Muizzu's administration.
Speaking to PSM News after the inauguration of the new services, Minister Saeed explained that the new free zone will allow traders to store various goods—including dry goods, frozen and chilled items, and bulk cargo—for re-export without initially paying customs duty.
"The traders want to re-export them at a price. So the arrangement for re-export has been facilitated,” he explained.
He added that MPL will establish "value collection facilities" to enable businesses to add value to imported goods before re-exporting them to other countries.
As the Kulhudhuffushi port marks the first free zone, Minister Saeed confirmed that the government intends to extend these services to the central and southern regions of the Maldives to further expand the re-export industry nationwide.
The Economic Ministry has also stated its intention to expand the existing land area at the port to accommodate future demand for bonded storage. This reflects a broader government strategy to modernise and expand port infrastructure across the nation, with an agreement signed with MPL back in May.
MPL and the Economic Ministry anticipate that the new services will benefit the northern atolls by lowering transportation costs, stabilising market prices, and driving economic growth.