Tourism, shipping, fishing, and agriculture are the mainstays of this country’s diverse economy, with handicrafts and boat construction acting as the core industries. Because of all of these qualities, as well as the gorgeous environment, many foreign entrepreneurs prefer to create businesses in the Maldives.
Do you want to start a business in the Maldives? Then you’ve come to the right place. While the Maldives is known for being a glamorous travel and vacation spot, did you know it is also one of the world’s most profitable investment and business destinations? With its thriving economy and ever-expanding market, it’s no surprise that many foreign firms are keen to conduct business in this attractive island nation these days.
The Maldives Company Act allows for the formation of two categories of businesses. The two sorts of companies are private limited companies and public limited companies.
Private Limited Company
- Consisting of at least two members.
- There can be no more than 50 members.
- It must be stated in the Memorandum and Articles of Association that the company is a private one.
- Shares can only be transferred if the Articles of Association allow it.
- Shares that have been paid in full can be freely transferred.
- A minimum authorized share capital of MVR 2,000 is required for the company.
- There must be at least two directors on the board of directors.
Public Limited Company
- Formed by a minimum of 10 members.
- Can have an unlimited member count.
- Public company status must be stated in the Memorandum and Articles of Association.
- The transferability of fully paid-up shares is unrestricted.
- Legally permitted to sell shares to the public.
- The company’s authorized share capital must be at least 1,000,000 MVR.
- The minimum number of directors required on the board is five.
Maldives business registration
- Choose a name for the business you want to start in the Maldives. You must first verify its one-of-a-kindness and reserve it. Then go to the Registrar of Companies and obtain the standard incorporation forms.
- The next step in the company registration process is to pay the registration fee at the Ministry of Economic Development.
- After that, you must apply for a tax identification number (TIN) and register with the Registrar of Companies (Tax Identification Number). Some company formation agents will help you with this process by submitting the necessary documents on your behalfs, such as the name search authorization form, the company registration application form, the Company Secretary’s approval letter, or copies of the members’ identification cards.
- To start a business in the Maldives, you must first create a seal for your company and then register it with the Registrar of Companies under the Companies Act.
In the Maldives, the process of registering a corporation should take no more than two weeks.
Factors to consider when choosing a company structure
Every entrepreneur must choose a legal entity that is appropriate for their business objectives. When deciding on a legal framework, there are several variables to consider:
- Amount of investment required
- Shareholders/investors’ rights
- Potential business risks and liabilities
- The expansion plan of the business
- Expenses involved in maintaining the business
- Available tax benefits for various business models
Comparison of the structures
A company’s number of shareholders might range from 2 to 20 as compared to a sole proprietorship. As a result, the company’s chances of raising financing improve. Companies having more than one shareholder are treated as separate legal entities with additional legal obligations, including tax obligations.
If a corporation has more than one partner, the partners’/shareholders’ interests must be safeguarded. The rights of partners/shareholders are safeguarded under the business and partnership legislation.
When deciding on a business structure, it’s also important to consider your firm’s potential risks and duties. It is in a company’s best interests to incorporate a limited-liability corporation if it enters a high-risk field. This safeguards a company’s shareholders from unexpected obligations protects their assets from corporate debts and demands and gives greater financial and legal protection than a sole proprietorship.
In comparison to forming a corporation, forming a sole proprietorship or forming a partnership is simple and inexpensive. A business’s registration process necessitates a large amount of paperwork. A company must also comply with several annual filing obligations.
Corporations and partnerships have significant tax advantages over sole proprietorships. A corporation can deduct up to 15% of its earnings in shareholder pay, while a sole trader cannot deduct his or her salary from the business profit tax computation.
As a result, it’s a good idea to think about these factors while starting a business.
