New Companies Act Requirements Officially Enforced in the Maldives

The regulatory reforms introduced under the Companies Act (Law No. 7/2023) are now fully implemented across the Maldives, effective 1 January 2025.

 The Act, along with the Private Companies Regulation (Regulation Number: 2024/R-99), has introduced significant compliance obligations for companies operating in the country. Businesses were granted a one-year transitional period to align themselves with the new framework, which officially concluded on 31 December 2024.

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With the conclusion of the transitional period, companies are now required to meet several important obligations to remain compliant with the Companies Act:

Updated Constitutions

Companies must update their constitutions in line with the Act. This can be achieved by adopting the Model Articles of Association or drafting customised articles. Additionally, companies are required to submit a Compliance Statement, as outlined in Schedule 5 of the Private Companies Regulation.

Board Director Requirements

Private companies are now mandated to appoint Maldivians as directors on their boards, in accordance with Section 115 of the Act. The only exception applies to foreign investment companies. Private companies with 100% local shareholding but foreign directors must ensure compliance by appointing Maldivian directors. Companies that previously relied on foreign directors are encouraged to explore alternative arrangements to maintain their strategic direction while adhering to the new requirements.

Obligations for Re-Registered Companies

Re-registered companies must meet all obligations under the Companies Act and the Foreign Companies Registration Regulation. This includes appointing a local agent, as stipulated by the regulations.

The new Companies Act aims to enhance corporate governance and align business practices in the Maldives with international standards. However, the implementation of these requirements marks a significant shift, particularly for companies that previously relied on foreign directors or operated under outdated constitutions. Businesses must now ensure their operations fully comply with the new framework to avoid penalties or disruptions.