MMA reminds resorts of 40% dollar conversion requirement

The Maldives Monetary Authority (MMA) has reminded tourist resorts and other businesses subject to the Foreign Exchange Act to comply with revised foreign currency conversion requirements, including the obligation for resorts to convert 40% of their US dollar revenue.

The central bank issued the reminder on Monday following amendments to the Foreign Exchange Act in August, which increased the conversion requirement for resorts and shortened the deadline for converting foreign currency earnings.

Under Article 10 of the amended law, businesses must convert the required portion of their foreign currency revenue by the 28th of the month following the month in which the revenue was received.

Previously, businesses were required to complete the conversion by the 28th of the third month after receiving the revenue.

The MMA urged all businesses covered by the law to fulfil their obligations within the prescribed deadline.

The central bank also warned that the names of businesses failing to complete the required conversions by the deadline would be made public in accordance with its regulations.

Before the August amendment, tourist resorts were required to convert 20% of their US dollar revenue into Maldivian rufiyaa. The revised law increased this requirement to 40%.

The Foreign Exchange Act also establishes conversion requirements for other businesses earning revenue in foreign currencies.

Tourist hotels and guesthouses are required to convert either USD 25 per tourist or 20% of their monthly foreign currency revenue, depending on the applicable conversion arrangement.

Businesses earning foreign currency revenue outside the tourism and financial sectors are also subject to conversion requirements.

Under the law, businesses in these sectors with foreign currency revenue equivalent to USD 15 million are required to convert 40% of their earnings.

However, businesses that are wholly owned by Maldivians are required to convert 7% of their monthly foreign currency revenue.

The MMA reiterated that businesses covered by the legislation must comply with the conversion requirements and deadlines established under the amended law.