Maldives Welcomes Long-term Leasing of Villas

The Maldives welcomed a transformative legal milestone – Regulation No. 2023/R-154; Regulation on the Long-term Lease of Tourist Properties on Strata Basis. The Regulation was published on the Gazette on 5^th September 2023.

This Regulation ushers in a new era for long-term leasing of villas or rooms on strata basis within the vibrant tourist resorts and integrated tourist developments of this tropical paradise. This Regulation is set to significantly impact investors, resort owners and prospective lessees in the Maldives. In this article, we aim to summarise the key aspects of this ground-breaking Regulation and cover its vital provisions.

Empowering Strata Leasing

At the heart of this Regulation lies the empowerment of strata leasing.

This new opportunity opens the door for several investors to introduce a new product within the existing infrastructure. This Regulation will be applicable for:

1. Investors Developing Tourist Resorts: Individuals or entities holding headleases or subleases for islands designated for the development of tourist resorts.
2. Investors Developing Integrated Tourist Resort: Parties in possession of headleases or subleases for islands earmarked for integrated tourist resort development.
3. Investors Developing a Resort on a Plot of Land which is a part of an Integrated Tourist Resort: Parties leasing a plot of land on an integrated tourist development.

Streamlined Registration Process

To qualify for strata-based leasing, villas and rooms must undergo registration with the Ministry of Tourism. This process is facilitated through the Ministry’s official website, where applicants will have to fill a form and submit supporting documents. Furthermore, a registration fee of MVR 5,000 must be paid to the Maldives Inland Revenue Authority (MIRA).

A Variety of Leasable Properties

This Regulation welcomes a wide spectrum of properties eligible for long-term strata-based leasing, including:

1. Water Villas: An option truly unique to the Maldives.
2. Individual Villas or Rooms: In both tourist resorts and integrated tourist developments.
3. Individual Rooms or Apartments in Buildings: Situated within the premises of tourist resorts or integrated tourist developments.

Precise Lease Agreement Requirements

The Regulation carefully outlines the specific requirements for the Agreement that must be formed when leasing villas and rooms on a strata basis. This will ensure that both property owners and lessees have a clear and robust foundation for their leasing arrangements, thus clarifying their respective rights.

A Transformative Impetus for Maldivian Tourism

In conclusion, this Regulation represents a landmark shift in the landscape of villa and room leasing within the Maldives’ thriving tourism industry. This regulatory update is poised to catalyse and shape the future of tourism development in the Maldives. It introduces a transparent and well-defined framework for property management, instilling confidence in property owners and lessees alike. As this Regulation takes root and becomes integrated into the fabric of Maldivian tourism, it will undoubtedly foster growth and evolution within the sector, creating new opportunities for investors and property developers eager to contribute to the country’s continued tourism success.