The Maldives Monetary Authority (MMA) has amended two regulations following changes to the Foreign Currency Act, including provisions requiring financial obligations involving foreign currency transactions to be reported to the authority.
The amendments cover the General Regulation on Foreign Currency and the regulation governing registration under the Foreign Currency Act. MMA published amendments to both regulations in the Government Gazette following changes to the Act.
Changes to the General Regulation on Foreign Currency detail the procedures for providing businesses with relief under the Foreign Currency Act. Under the amended law, resorts operating in the tourism sector must remit 40 per cent of their monthly revenue to a bank established in the Maldives.
Where foreign currency obligations must be settled to meet the remittance requirement, the central bank has the authority to grant relief.
The amended regulation also sets out the circumstances in which transactions may be conducted in foreign currency and the procedures for obtaining MMA approval for such transactions. Businesses must submit details of expenditure budgeted for payment in foreign currency to MMA 30 days before the beginning of each year.
In addition to the circumstances in which the law allows relief, the regulation includes further obligations determined by MMA. These cover payments for insurance, transactions between shareholders, business transactions permitted under the law, transactions involving diplomatic missions and transactions related to higher education.
Businesses seeking a review of the amount of foreign currency they are required to remit must submit a tax clearance report from the Maldives Inland Revenue Authority (MIRA), together with documents relating to the obligation that must be settled. MMA has said it will take measures to expedite this process.
The amendments also extend to the regulation governing registration under the Foreign Currency Act. Previously, businesses outside the tourism sector were required to remit foreign currency if their annual revenue reached USD 15 million.
The amendment to the law has raised this threshold to USD 25 million. MMA has incorporated the change into both the registration regulation and the General Regulation on Foreign Currency.
The law also requires businesses to designate a specific account for meeting the remittance obligation. In line with this requirement, the amended registration regulation requires businesses to include the specific account used for remittances when registering.
The first amendment to the Foreign Currency Act has now taken effect, and MMA has assured that it will fully implement the provisions set out in the law.