Proposed new FDI law allows licence revoke, MVR 1m fines for violations
The bill provides for the withholding and revocation of licences issued for foreign investment in the event of circumstances or in violation of the law.
By
Mohamed Muzayyin Nazim
Government on Monday submitted to the parliament a new law on Foreign Direct Investments (FDI), which if adopted will allow the government to impose fines of up to MVR 1 million or revoke the licence of foreign companies operating in Maldives for illegal activities.
The Foreign Investment Bill was introduced in the parliament on behalf of the government by Manadhoo MP Ahmed Haaroon.
The main purpose of the bill are:
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Relevant policies to increase foreign investment in Maldives and develop the economy through such investments
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The rules include determining the areas in which foreign investors can invest in Maldives, the rules to be followed in issuing licenses and the protection and security available
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The rules for treating foreign contractors of projects in Maldives that are not conducted in Maldives and the amounts of fines for violating the law have been determined
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Describe the rules for claiming the investment to the State under certain circumstances
The 44-page bill consists of 10 chapters. The determination of the scope of foreign investment and the elaboration of some of the rules were left directly to the economic minister or to regulations enacted by the ministry under the act. The entire bill is also designed to give the ministry greater powers.
The bill provides for the withholding and revocation of licences issued for foreign investment in the event of circumstances or in violation of the law.
Action and complaints are described in chapter seven of the bill. The chapter contains prohibitions and measures that a foreign investor should not take. They include:
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1-
Carrying on business other than the licensed business; as a penalty, a fine not exceeding 30% of the value of the entire business or investment
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2-
Conduct in breach of licenced terms
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3-
Failure to correct the violation of the license without reasonable cause within the period notified for correction; As a punishment, a fine between MVR 100,000 and MVR 1 million depending on the seriousness of the offence
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4-
Submitting invalid information in obtaining a license
For all but Nos. 1 and 3, the bill provides for a fine of MVR 100,000 or 10% of the value of the entire business, depending on the seriousness of the acts.
Foreign investments are currently governed by the Foreign Investment Act of 1979 and regulations made by the economic ministry.
According to Article 49 of the bill, the previous law will be repealed once the bill becomes law.
The bill will come into force three months from the date of its approval and publication in the gazette.
