Maldives Law Institute

Updated Regulation on Construction Period Extension and Deferment of Rent and Fines for resorts

Regulation on Construction Period Extension and Deferment of Rent and Fines (Regulation No. 2022/R-236) (“CP Regulation”) was published in the Government Gazette on 6 December 2022. The CP Regulation repealed Regulation No. 2019/R-1041 and its respective amendments which previously governed construction period extension and deferment of rent and fines. Whilst the CP Regulation retains most of the guidelines specified in the previous regulation, it also introduces notable changes such as:  
Construction period extension (“CP Extension”)
If an application for CP Extension has not been filed prior to expiration of the construction period, the CP Extension request shall be submitted within 30 days from the effective date of the CP Regulation (ie 6 December 2022), failing which the application will be rejected. 
Where development of the tourist facility has not been completed as of the effective date of the second amendment to the previous regulation (ie 28 December 2020), maximum CP Extension that shall be granted is:
  • Island or land - 3 years
  • Lagoon - 4 years
The maximum CP Extension period shall be calculated from the commencement date of the first extension granted under the second amendment to the previous regulation. 
Nonetheless, if 70% of the development is completed in accordance with the work plan at the time of expiration of the CP Extension period, the Ministry of Tourism (“Ministry”) may at its discretion extend the CP Extension period by an additional 1 year.
Splitting of rent for phased developments
The most monumental change that the CP Regulation has introduced is the splitting of rent for phased developments. 
In the event at least one phase is developed and operating by the time the original construction period, or the CP Extension expires, a construction permit may be granted by the Ministry for development of the remaining island(s). At the time of developing the remaining island(s) pursuant to the construction permit granted, the Ministry may allow payment of rent and fines to be deferred. Such deferment shall be applicable for maximum 3 years from the date of commencement of operation of the first island and even if the remaining island(s) have not been completely developed at the end of the deferment, the deferred rent and fines shall become payable.
Each island must undergo a separate land survey. If the total rent of the whole island or lagoon is capped under schedule 1 of the Maldives Tourism Act (Law No. 2/99), rent shall be payable based on the size of the operational island and the remaining rent may be deferred as stated above.  
Ministry has the discretion to defer rent payable for redevelopment period granted to improve the standards of an operating facility or defer rent and fines payable due to unpaid rent and subsequent fines accrued following closure of the facility with the permission of the Ministry. 
Maximum period that will be granted for redevelopment of a tourist facility is 18 months. However, if 50% of the redevelopment work is completed as provided in the work plan submitted to the Ministry, a maximum of 12 months may be granted by the Ministry for redevelopment. All tourist facilities will be granted one redevelopment period within each 10-year period.

To download: CP Extension Regulation