invest maldives

4 ways you can invest in Maldives tourism industry

Maldives is not only a beautiful paradise for holidaymakers. It is also a paradise for investors. Hotel chains like Banyan Tree or Sixsenses opened their first hotel in Maldives and today they have hotels in almost all major destinations. The main international airport of Maldives was leased to an India company in the past 2 years and it was the most profitable period in history of the company. Recently Blackstone, a New York stock exchange listed company, bought two seaplane companies operating in Maldives. These are the highlights of the foreign investments in the Maldives.

Tourism is the most popular industry among the investors. There are a number of ways you can start your investment in tourist sector.

1. Win an open bid or buy from existing owner

In Maldives you cant own the island forever. It is leased upto 99 years and you have to pay land tax annually. Currently the rent is $1 million for island less than 20 hectares, the rent is based on land area. Profitability depends on many factors such as geographic location, beach quality, lagoon, reef, dive sites, proximity to local islands, proximity to desert islands, proximity to airports, shape and formation of the island etc. Most of the resorts have an investment recovery period less than 11 years, out of the initial lease of 35 years.

2. Subsidy for providing ferry service or public transport

Maldives is comprised of largely dispersed islands in the Indian Ocean. Its a small population of less than 400,000. A very small portion of the population can afford air transportation, all others have to depend on sea transportation. Under Public Private Partnership the government gives ferry operation for private companies. As a subsidy the ferry operating company gets an island for resort development. This is a very effective way to get island without a down payment. Ferry operation would cost around $5000 per month.

3. Sublease from other companies

There are some companies that already have islands and unable to develop resorts due to financial issues. These companies often sublease the island to other companies on long term contracts. This method is not as cheap as subsidy method, but works and sometimes help you get islands from strategic locations.

4. Agricultural Island

From time to time the government leases islands for farming and agriculture. You can bid or buy one from third party. The land tax for these islands are as low as $1000 per month. Depending on the location and other factors, some expensive islands may have a rent upto $7000 a month. The islands are leased for agricultural projects and tourism is not allowed in these islands. But, you can still build your villa and obtain work-permit. Then you can enjoy your holiday home in Maldives. It also is likely that government will soon allow some kind of tourist activity in future, to attract investors. But, then the islands will become expensive. Now is the time if you are an economist.

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