Government Says Ras Malé Project Will Generate Revenue Through Lease Sales and Taxes

The Government of Maldives expects to begin receiving revenue from the proposed Maldives Waterfront and Marina project in Ras Malé once advance sales of lease rights begin, with the State set to receive a 10 per cent share of such sales as well as applicable tax revenues, Finance and Public Enterprises Minister Hassan Zareer has said.

Speaking on state media PSM’s Raajje Miadhu programme, Zareer said the development would be carried out on approximately 500 hectares of Ras Malé, with the remaining area of the island reserved primarily for residential development.

“State revenue will begin flowing as soon as advance sales of lease rights commence, through our 10 percent share, sales tax, and all applicable tax revenues,” the minister said.

Under the commercial terms announced for the project, the Government of Maldives will receive 10 percent of sales revenue from the commercial development and a 4 percent fee on every property transaction, including sales and resales. 

The minister said proceeds from lease-right sales would be placed in an escrow account agreed between the government and Eagle Hills. According to Zareer, the arrangement would also help ease foreign-exchange pressures, with the developer permitted to repatriate revenue only after development milestones have been completed and under terms agreed with the government.

Zareer also rejected the possibility of the project being designated as a tax-free zone, saying standard taxes would apply to the development. Zareer said the State would collect revenue through Income Tax, Tourism Goods and Services Tax (TGST) and General Goods and Services Tax (GST).

Ras Malé covers approximately 1,100 hectares, according to the minister, of which around 500 hectares have been allocated for the Maldives Waterfront and Marina development.

The remaining 600 hectares are intended for residential use. Zareer said the residential area would be larger than the combined area of all three phases of Hulhumalé.

Separately, Eagle Hills Chairman Mohamed Alabbar told Reuters that construction ​on the 550-hectar site could begin in the first quarter of next year.

The planned development is expected to include a range of property types and facilities. According to the minister, the masterplan includes hospitals, international schools, theme parks and commercial real estate, alongside tourism and residential developments.

The Government of Maldives and Abu Dhabi-based developer Eagle Hills signed the commercial terms agreement for the Maldives Waterfront and Marina yesterday.

Eagle Hills describes the project as an integrated island destination incorporating hotels and resorts, premium and branded residences, a marina, waterfront leisure facilities, retail, dining, entertainment, education, healthcare and community facilities. The company says properties will be offered under a long-term leasehold framework under Maldivian law, with terms of up to 99 years.

Speaking on PSM, Zareer compared the government’s stated USD 20 billion project figure with the Maldives’ current gross domestic product, which he put at approximately USD 7.7 billion. He described the planned development as nearly three times the size of the country’s current GDP.

Eagle Hills, however, put the overall development scale at approximately USD 12 billion in its announcement of the commercial terms agreement.

The figures refer to different measures: GDP represents the annual value of economic output, while the USD 12 billion and USD 20 billion figures cited for the project refer to its development or investment scale over multiple phases.

The project is being developed on reclaimed land, according to Eagle Hills, which has also said it will not undertake further dredging and that independent marine monitoring will accompany construction.