When thinking of a tropical paradise, the first thing that comes to your mind might just be the Maldives. It is an archipelagic state in South Asia, located in the Indian Ocean. However, this popular vacation destination is not only rich in natural beauty; it also provides various business opportunities.
The Maldives is, in area, the smallest country in Asia. A large company is not a popular form in the Maldives, but a sole proprietorship should be the right fit for a small business. In this article, we will inform you of everything you need to know about this business form.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Sole proprietorship in the Maldives
A sole proprietorship is the simplest business form and the easiest one to establish. According to the Sole Proprietorship Act, a business owner is a natural person, and the sole proprietorship is not a legal entity. The owner's liability is not limited, and they are liable with all their assets. The business can operate under their name.
Before we explain the registration procedure, there are a few things you should consider:
- Only local citizens over the age of 18 can operate a sole proprietorship;
- You can only have one sole proprietorship registered under your name;
- The registration validity lasts for five years.
Now, if you meet these conditions, you may proceed to the registration.
Business Registration in the Maldives
The business registration is done under the Ministry of Economic Development in a few steps:
- The first step of the business registration is the business name approval. When you come up with a name, you should search it in the Business Registry. If the name is not already taken, you can reserve it. You should then fill out the Business Name Registration Form.
- You can apply for sole proprietorship registration online, via the Business Portal, in section Business Registrations - Sole Proprietorship. To apply online, you will need an efaas account. This can also be done in person by submitting the application form at the MED office (Malé, Boduthakurufaanu Magu, 20125). The same application form is used for the registration of all types of businesses. You should tick the box next to Sole Proprietorship. You will also need a copy of your ID card.
- The registration fee is MVR 500 (around USD 120).
The whole registration process will take around two days, and everything is done in one place.
After registration, you will receive the following documents:
- Certificate
- Registration letter
- Copy of payment receipt
Now, your business can start operating! Once again, the registration is valid for five years, after which it should be renewed.
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Taxpayer Registration in the Maldives
You should apply for a taxpayer registration with Maldives Inland Revenue Authority (MIRA) within sixty days of registering with the MED if your average monthly gross revenue exceeds MVR 40,000. To apply, you should submit the MIRA101 form.
Business Profit Tax (BPT) is a tax charged on the taxable profits that exceed MVR 500,000 in a tax year. Companies, partnerships, individuals, and all other persons carrying out business in the Maldives are subject to BPT. The BPT rate is 15%.
