The government of the Maldives has decided to defer the lease payment for tourism establishments that gets closed for renovations. The amended regulation on deferring lease rent for tourism establishments was published in the government gazette.
The regulation was introduced in 2019 and the Ministry of Tourism decided to make amendments in order to provide leeway for investors developing resorts, hotels, and guesthouses. The regulation now states that the ministry will defer the lease rent for any tourism establishment that gets closed.
The regulation states that the operator should notify the ministry prior to closing the establishment for redevelopment or renovation, after which the ministry will give the approval to defer the lease rent for a maximum of 18 months. The ministry will also extend the approval by 12 months if 50% of the work is completed. Establishments that receive the approval can pay any pending lease rent or fine within two years after the end of the expiration of the approval. Establishments will only receive approval to defer lease rent every 10 years.
Additionally, the tourism ministry will have the authority to extend the construction period for any establishment that fails to complete the development within the agreed-upon timeline. The establishment will be required to make payments as part of its corporate social responsibility (CSR) each quarter for three years after re-opening.
An establishment that receives permission to extend its construction period can also receive approval to defer the lease rent during the period on the condition that it agrees to pay the amount without interest each quarter for five years after a two-year grace period after it receives the operating license, or agree to pay the amount with a 3% interest each quarter after a two-year grace period after opening.
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