The First Amendment to the Foreign Currency Act, Gazetted on 1 September 2026, introduces several changes relating to foreign currency conversion, conversion deadlines and the requirements for Category C businesses.
Sun Photo/Fayaz Moosa
The Foreign Currency Act (Law No. 32/2024) was recently amended. The First Amendment to the Foreign Currency Act, Gazetted on 1 September 2026, introduces several changes relating to foreign currency conversion, conversion deadlines and the requirements for Category C businesses.
Here are some of the key changes introduced by the amendment.
Foreign Currency Conversion
Changes have been made to the conversion requirements for Category A and Category C businesses. However, there has been no change to the amount that Category B businesses are required to convert.
Category A: Businesses under Category A are now required to convert 40 percent of their monthly foreign currency income. The previous option of converting at a rate of USD 500 per tourist has been removed.
Category B: There has been no change to the conversion requirement for businesses under this category.
Category C: Previously, Category C covered businesses outside the tourism and financial sectors that earned at least USD 15 million in annual revenue. Under the amended law, the threshold has been increased to USD 25 million.
Businesses under Category C are now required to convert 40 percent of their foreign currency income. However, businesses that are 100 percent Maldivian-owned are required to convert 7 percent.
Change to the Conversion Deadline
One of the major changes introduced by the amendment is the deadline for converting foreign currency.
Previously, businesses were given three months to complete the required conversion. Under the amended law, the required amount from each month’s foreign currency income must be converted by the 28th of the following month.
For example, the required percentage of foreign currency income earned in September must be converted by 28 October.
Buying and Selling Foreign Currency
The amended law also provides for specific rules to regulate the buying and selling of foreign currency.
Previously, the Maldives Monetary Authority (MMA) issued licenses for foreign currency exchange businesses under the powers granted by the Maldives Monetary Authority Act.
Under the amended Foreign Currency Act, regulations are to be introduced covering the regulation and supervision of foreign currency exchange businesses. These regulations will also set out licensing requirements, obligations of licensed businesses and the arrangements applicable to businesses that already held licenses before the amendment came into effect.
These regulations have not yet been gazetted.
MMA Approval for Certain Foreign Currency Transactions
Article 4 of the Act allows foreign currency to be used for certain specified payments.
However, if a business that earns income in foreign currency wishes to pay for goods or services it purchases in foreign currency, it must apply for approval from the MMA to make such payments in foreign currency.
Providing Bank Account Information
Under the Act, parties are required to deposit their realized sales into a bank account and must deposit the funds into a foreign currency account opened with a bank licensed by the MMA.
Details of the account must also be provided to the MMA in the manner determined by the Authority.
Overall, the amendments to the Foreign Currency Act introduce important changes to the amount of foreign currency that businesses are required to convert, the deadline for conversion and the rules governing foreign currency transactions.
Businesses with obligations under the Act should therefore familiarize themselves with the new requirements and deadlines and ensure that they comply with the Act and the regulations issued under it.
