The Government has submitted amendments to the Special Economic Zone (SEZ) Act to attract large-scale investors and encourage the creation of sustainable, self-sufficient developments across the Maldives.

The bill was introduced to Parliament by Baarah MP Ibrahim Shujau on behalf of the Government, with its first reading held on 20 October. This is the first amendment to the SEZ Act since its enactment in 2014.

The amendment seeks to expand the scope of the SEZ framework to include “sustainable townships”, large-scale real estate or integrated tourism developments designed to function as independent communities. Under the proposed definition, a sustainable township is a designated zone under unified management that incorporates residential, hospitality, healthcare, educational, and recreational facilities supported by sustainable infrastructure aimed at minimising environmental impact.

The proposed conditions for investors include a minimum investment of USD 500 million, establishment of integrated tourism or luxury real estate projects, and inclusion of either an international-standard hospitality training centre or healthcare facility. Developers must also ensure self-sufficient energy and waste management systems, with at least 60 per cent of the zone’s energy sourced from renewables, alongside provisions for sustainable agriculture and food production to reduce import dependency.

To incentivise investment, the bill offers a range of fiscal benefits. Developers operating within sustainable townships would be subject to a 5 per cent income tax rate for the first 10 years, 10 per cent for the following decade, and subsequently taxed at the standard rate under the Income Tax Act. Additionally, import duties on capital goods used for developing the zones would be waived.

Under the amendment, a new category, sustainable township, will be added to the eight existing types of SEZs currently defined by law, which include industrial estates, export processing zones, enterprise zones, free ports, offshore financial centres, and high-technology parks. The bill also mandates that regulations detailing the implementation framework be drafted within six months of enactment and published in the Government Gazette.

The proposal reflects the Government’s commitment to diversifying the economy, expanding tourism, and promoting environmentally responsible investment. Once approved, the revised Act is expected to pave the way for new large-scale developments that integrate tourism, housing, and sustainability under one management model, aligning with the Administration’s goal of advancing long-term economic resilience.