Parliament has begun deliberations on a government proposal to amend the Employment Act, a measure intended to ease financial burdens on small and medium-sized enterprises (SMEs) by exempting them from foreign labour quota fees. The bill, introduced by Mohamed Shameez, Member of Parliament for Madaveli, represents a significant policy shift aimed at strengthening the country’s smaller commercial entities.
The amendment would remove the obligation for qualifying SMEs to pay quota fees for expatriate employees. Responsibility for determining eligibility would rest with the Cabinet of Ministers, which must apply criteria designed to ensure the exemptions reach the sectors most affected.
A revision to Section 65-4 of the legislation requires the Cabinet to foster a supportive environment for micro, small, and medium enterprises, with the broader goal of expanding their role in the national economy. Policymakers are instructed to weigh the potential for long-term job creation and to reduce disparities between large corporations and smaller businesses. In designating eligible sectors, the government is further directed to encourage improvements in business standards and promote innovative commercial practices.
On 17 February, parliament voted to take the bill under consideration, with 58 members supporting the motion. The proposal has now been referred to the Committee on National Development and Heritage for detailed review, marking the next stage in the legislative process.
The measure builds on a government initiative launched earlier this year to address systemic challenges facing SMEs. Its direction stems from a consultation held on 17 December 2025, when President Dr Mohamed Muizzu met with business owners to hear their concerns. Entrepreneurs identified the high costs of securing foreign labour quotas as a central obstacle to growth.
In response, President Muizzu pledged that his administration would deliver solutions to the issues raised. He assured stakeholders that the difficulties hindering SME development would be resolved within two years.