The Parliament’s Committee of the Whole House has passed the first amendment to the Special Economic Zones (SEZ) Act since its enactment in 2014, paving the way for the creation of designated zones for large-scale, sustainable economic developments and attract investors.

The amendment, submitted on behalf of the Government by Baarah MP Ibrahim Shujau, was reviewed by the Committee before being passed with the support of 55 MPs, while nine voted against. A key addition to the bill, proposed by Hoarafushi MP Ali Moosa and seconded by Vilimale’ MP Mohamed Ismail, introduces a 4 per cent property transfer tax on the sale of rights to villas or rooms in tourist or integrated resorts located within SEZs.

Under the revised law, the SEZ framework will now include sustainable townships; self-contained developments combining luxury tourism, residential housing, education, healthcare, and recreation within a single zone. These townships must meet several conditions, including a minimum investment of USD 500 million, establishment of world-class hospitality or healthcare facilities, and ensuring 60 per cent renewable energy use alongside self-sufficient waste management systems.

To encourage investment, the amendment provides a tiered income tax structure for developers: 5 per cent for the first 10 years, 10 per cent for the following decade, and the standard rate thereafter. Import duties on capital goods used for developing SEZ zones will also be waived.

According to the Ministry of Economic Development and Trade, the initiative aligns with President Dr Mohamed Muizzu’s economic diversification agenda, promoting environmentally responsible development while expanding tourism and housing opportunities across the Maldives. Regulations implementing the new provisions will be finalised and published in the Government Gazette within six months of ratification.