The Parliament has approved a landmark amendment to the Special Economic Zone (SEZ) Act, introducing a higher minimum investment threshold of USD 500 million and a range of incentives designed to attract large-scale foreign capital to the Maldives.

The amendment, passed with the support of 46 members, represents one of the most significant revisions to the SEZ framework since its enactment.

The bill was submitted on behalf of the government by Baarah MP Ibrahim Sujau and reviewed by the Committee of the Whole House before its passage.

At the core of the amendment lies the new investment benchmark—requiring SEZ projects to involve no less than USD 500 million. Lawmakers emphasized that this measure aims to ensure that only projects of substantial scale and national impact qualify for SEZ designation.

The revised law also expands the SEZ framework to introduce a new category known as “Sustainable Townships.”

These are defined as large-scale, integrated real estate or tourism developments managed under a single authority and mandated to provide essential facilities and services in accordance with national regulations.

Under this new model, developers must incorporate sustainable infrastructure and resource management systems to minimize environmental impact, while ensuring the provision of residential amenities, utilities, and community services.

Eligible projects include integrated tourism developments with luxury facilities, high-end real estate ventures, and international-standard establishments such as hospitality training centres and health service hubs.

To encourage the level of investment required, the amendment introduces a preferential tax regime.

Developers will be subject to an income tax rate of 5 percent for the first 10 years, 10 percent for the subsequent decade, and thereafter taxed at the standard rate under the Income Tax Act. Additionally, capital goods imported for SEZ development will be exempt from import duty.

The Committee of the Whole House also added a new provision to ensure long-term state revenue generation.

The government will now be empowered to collect a 4 percent Property Transfer Tax on the total value of rights sold under long-term leases structured on strata principles for villas or rooms within tourist or integrated resorts located inside SEZs.