The 16th Amendment to the Decentralisation Act has come into force following its ratification by President Dr Mohamed Muizzu, and publication in the Government Gazette.

The legislation, passed during the 22nd sitting of the second session of the 2025 parliamentary term on 6 August, introduces key provisions aimed at refining the framework for decentralised governance in the Maldives.

The amendment sets out clearer rules for the business operations of Local Authority Companies established by councils, revises principles governing State grants to councils, and outlines procedures for significant financial decisions during the final year of a council’s term. It requires that any business activity not meeting the stipulated legal conditions be terminated within 90 days of the amendment taking effect. Councils are also prohibited from charging rent for land or buildings allocated for the provision of essential public services.

Under the new ratified amendment, if a council’s term is set to expire within 365 days, the appointment of staff, leasing of land, lagoons or reef areas, and the initiation of development projects outside the approved plan may only be pushed forward in line with guidelines issued by the Ministry of Finance and the Local Government Authority.

President Dr Mohamed Muizzu, has continuously emphasised that the changes represent a significant step towards enhancing and advancing decentralised development with greater accountability, transparency, and focus on community benefit.