President announces tax-free zones, tax relief for small businesses

President Dr Mohamed Muizzu has announced plans to establish tax-free zones for small and medium-sized enterprises (SMEs) across the Maldives, alongside a series of tax exemptions and financial measures aimed at supporting businesses.

Speaking at the Maldives Expo 2026 awards ceremony held at Barceló Nasandhura on Saturday evening, the President outlined five measures the government intends to introduce over the next three months.

The measures include allowing businesses to receive payments in US dollars, establishing tax-free zones, introducing tax offsets, increasing the Goods and Services Tax (GST) registration threshold and removing import duties on raw materials.

Under the first measure, businesses will be able to receive payments in US dollars through the Bank of Maldives (BML) payment gateway from 1 November, regardless of where their customers are located.

The President said businesses would also be able to use those funds through remittance services to purchase goods and services from overseas.

From 1 January 2027, the government plans to establish tax-free zones for SMEs, beginning with a three-year pilot project in Addu City.

Businesses operating within the designated zones will be exempt from rent on government-allocated land, Business Profit Tax (BPT) and income tax. The government also intends to introduce concessions relating to quotas.

The President said the initiative would subsequently be expanded to other parts of the country.

Another measure involves allowing SMEs to offset their tax liabilities against payments owed to them by the government.

The government also plans to increase the annual turnover threshold for mandatory GST registration from MVR 1 million to MVR 1.5 million, effective 1 January 2027.

In addition, import duties on raw materials brought into the country by SMEs will be removed from 1 January 2027.

President Muizzu said work was under way to introduce the legislative amendments required to implement the import duty exemption.

The government will also launch the second phase of its loan scheme for young entrepreneurs during November, providing further access to financing for those seeking to establish or expand businesses.

Explaining the objectives of the measures, President Muizzu said the government wanted to create opportunities for people to become financially independent through business and entrepreneurship.

"The purpose of this is to enable ordinary citizens to stand on their own feet," he said.

He said the government intended to create conditions that would allow people to generate income, engage in productive activities and establish businesses capable of operating sustainably.

The President added that supporting entrepreneurs would benefit both individual businesses and the wider economy.

He said the measures were intended to help businesses develop while contributing to economic growth across the country.