Tag: Ihavan

Government offers ‘corporate resident visas’ for foreign investors

The government has introduced corporate residence visas for foreign entrepreneurs who have invested more than US$50 million in the Maldives.

The new corporate resident Maldives scheme “aims to provide foreign investors in the Maldives with privileged and fast-track services,” according to the economic development ministry.

“My government will accord hospitality to all foreign investors who come here. We will accord safety and satisfaction to all of the foreign investors who are here. We would like foreign investors to feel like friends among friends, Maldivians among Maldivians,” said president Abdulla Yameen at a ceremony last night.

The government is seeking “to attract net worth high value investments” to the Maldives, he added.

The corporate resident visa holders will belong to “a privileged, elitist club,” Yameen said. Card holders will have permanent residency and will not have to wait in queues at immigration.

President Yameen handed out entitlement certificates under the scheme to the Bahrain Telecommunications Company (Batelco), Housing Development Finance Corporation, Seaplane Holdings, Mauritius Commercial Bank, and Hitachi.

Yameen said foreign investments are essential for the government to realise its ambition of “transforming the economy” through diversification and ‘mega projects.’

“This is the only way we believe third world countries, small countries like Maldives, can prosper and transform our economy,” Yameen said in his remarks in English.

The opposition has previously criticised the lack of significant foreign investments despite assurances from the government following the passage of its flagship special economic zones legislation in August last year.

The main opposition Maldivian Democratic Party recently alleged corruption in a deal with Dubai Ports World to develop a commercial port and free trade zone near Malé.

The opposition also contends that the previous administration’s abrupt termination of a contract with Indian company GMR to develop the international airport has irreparably damaged investor confidence. The Indian infrastructure giant is seeking US$803 million as compensation.

“New horizons”

Maldivians at first looked at foreign investments with “suspicion,” Yameen said, but “those days are long past gone.”

“We are looking at foreign investments as part and parcel of our economic development. We welcome foreign investments as partners in our developmental work,” he said.

Yameen said “the most important, most successful, thriving businesses flourishing across the Maldivian economy belong to foreign investors, either joint venture investors or 100 percent foreign investors.”

“There are no strings attached to foreign investments in the Maldives. Foreign investments can come in 100 percent foreign or it could be a collaborative effort with joint venture Maldivian partners,” he said.

“Foreign investors have naturally permeated into the Maldivian economy, that is why today we open our doors with gracious welcome to all the foreign investors.”

The government has invited foreign investors to consider “challenging and attractive investment opportunities” such as the iHavan transhipment port project.

Referring to the Hulhumalé bridge project, Yameen said the reclaimed island “is going to be an ample, resource-bound area for investors, be it housing or be it infrastructure provision.”

The government is also “looking at a brand new international airport that is capable of handling around seven million passengers” and exploring “new horizons of economic development.”

“Maldivian youth aspirations are tremendous. They are enormous. It is from housing to jobs and also to improving their wellbeing. The only way to do this is to attract our doors to all foreign investments who want to invest in major, major investments here,” he said.

The US$300 or US$400 million bridge project is “enormous” for the Maldives with its per capita income of about US$7,000, Yameen said.

“What it entails is not only growth, what it entails is assurance of jobs for Maldivian youth,” he said.

The government is committed to improving the livelihoods of the people, “no matter what you hear on the roads of Malé.”

Yameen also appealed to government staff to be “hospitable, speedy and efficient in delivery of service.”

Service provision should be “seamless,” he continued, “so no hiccups, no nonsense, that is the only way the so-called one-stop shop is going to work.”

Economic returns in the Maldives is “as good as any you can have,” he said, noting that investments in tourism can be recovered in four or five years.

The Maldives is also “a low tax country” with a comparatively low business profit tax, he said.

“This is a safe place for investments, this is safer than the safest place elsewhere on the earth,” Yameen said.

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Tourism Minister Adeeb appointed chairman of SEZ investment board

President Abdulla Yameen has appointed Tourism Minister Ahmed Adeeb as the chairman of the board of investment created last week under the Special Economic Zone (SEZ) Act.

Along with Economic Development Minister Mohamed Saeed as vice chairman, the rest of the members are Fisheries and Agriculture Minister Dr Mohamed Shainee, Environment and Energy Minister Thoriq Ibrahim, and Youth and Sports Minister Mohamed Maleeh Jamal.

The five-member board is authorised to grant approval for applications by developers to establish a zone, issue permits and investment licenses, and formulate rules and policies for the operation of SEZs.

Additionally, the board would monitor and review progress of investments, assess risk damage and liability, determine rates of fees and charges, and sign investment agreements between the government and developers.

The board would be assisted by a 17-member technical committee comprised of government officials as well as representatives from the private sector.

Following criticism from the opposition over the appointment of ministers to the board – who contended it was unconstitutional – President’s Office Spokesperson Ibrahim Muaz Ali put out a press statement yesterday (September 6) insisting that the board was instituted in line with laws and regulations.

Article 136(a) of the Constitution states, “A member of the cabinet shall not hold any other public office or office of profit, actively engage in a business or in the practice of any profession, or any other income generating employment, be employed by any person, buy or lease any property belonging to the state, or have a financial interest in any transaction between the state and another party.”

However, unlike boards of state-owned enterprises, Muaz stressed that the ministers on the board would not receive any form of remuneration, noting that it was “a governing board”.

“Therefore, the Maldivian government condemns misleading statements from some politicians made for different political purposes concerning the president forming the board of investment and appointing members,” read the press release.

SEZs

Under the SEZ Act, each zone would be granted to a developer – following evaluation of a proposal – to take overall responsibility for management and operation. Once a permit is granted, finding and choosing investors is left to the developer.

The investor would then be issued a license once the developer submits its agreement with the investor to the board.

The investment agreement signed between the board and the developer would include details of the investment, its value, proposed business activities, details of incentives, compensation formula, dispute resolution mechanisms, rights and obligations of the developer, as well as other terms and conditions.

Speaking at a forum on state broadcaster Television Maldives (TVM) last week, Adeeb said the SEZ law allows the government to offer incentives and “for the first time” negotiate directly with investors, who preferred “a one-stop solution” for applications, permits and licenses.

While US$5 billion has been invested in tourism since 1972, Adeeb suggested that even if one ‘mega project’ such as iHavan “takes off” with more than US$1 billion worth of investment, the economy would be transformed.

The iHavan or ‘Ihavandhippolhu Integrated Development Project’ envisions an international shipping and commercial hub with a container transhipment port, bulk-breaking and warehousing, oil storage and bunkering facilities, an international airport, a cruise liner terminal, a yacht marina, real estate development and ‘vertical’ tourism services.

The project aims to take advantage of the strategic location of the Maldives’ northernmost atoll on a major shipping route – through which more than 700,000 ships carry goods worth US$18 trillion a year – and develop 5,700 hectares of land along with deep natural harbours.

Opposition leader Mohamed Nasheed has, however, dismissed SEZs and the touted mega projects as “castles in the air” whilst his Maldivian Democratic Party (MDP) has warned that the law would pave the way for money laundering and other criminal enterprises, undermine local councils, and authorise the president to “openly sell off the country” without parliamentary oversight.

Speaking at the forum, MDP MP Fayyaz Ismail said large investments could not be secured while foreign businesses did not have confidence in the judiciary.

Fayyaz argued that the SEZ law lacked provisions for oversight and adequate legal protection for investors as well as controls for the inflow and outflow of money, relying solely on the benevolence and integrity of the government.

Addressing allegations concerning criminal enterprises and gambling in SEZs, Adeeb referred to President Yameen’s assurance that investments would not pose a threat to either Islam or Maldivian sovereignty.

“We don’t sell our daughters or women, do we? A clean tourism has been introduced in the Maldives without any prostitution,” he said.

If sound policies to favour local contractors and create jobs for youth are implemented, Adeeb suggested that investors could be brought in while “protecting our religion and traditions.”

“I don’t think gangs or black money are created by a law. It is done outside the law,” he said.

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President Yameen’s Independence Day address “cartoonish,” says Nasheed

President Abdulla Yameen’s address to the nation on Independence Day was “cartoonish,” former President Mohamed Nasheed said on opposition-aligned private broadcaster Raajje TV Saturday night (July 26).

Responding to the president’s claim that opposition parties were inciting unrest and sabotaging the economy, the opposition leader contended that Yameen’s intention was to deflect attention from his administration’s failure to “fulfil the hopes of the people”.

Yameen’s remarks were “uncivilised, outmoded, and unacceptable,” the Maldivian Democratic Party’s (MDP) acting president said.

At a time when the Maldives was facing a sovereign debt crisis and the president’s mandate was in doubt following the dissolution of the coalition with the Jumhooree Party, “I hear such talk as very cartoonish,” Nasheed said.

Nasheed added that the public would not be intimidated by veiled threats and insisted that democratic progress achieved in the present multi-party system could not be reversed.

Yameen had said the government would not allow the country to be plunged back into turmoil and accused opposition parties of “deliberately trying to disrupt stability by creating a spirit of unrest in society.”

If Yameen was implying that he would restrict the rights to free expression, assembly and peaceful political activity, Nasheed said the Maldivian people would “once again rise up”.

“Bleak” economic outlook

In addition to compensation owed to GMR for the premature termination of a concession agreement to develop the Ibrahim Nasir International Airport – which he predicted would not be lower than US$500 million – Nasheed said the Indian EXIM bank was also seeking between up to US$150 million.

Moreover, the State Trading Organisation has incurred a debt of US$150 million in unpaid bills to the Emirates National Oil Company, Nasheed claimed.

The economic situation was “bleak” with dwindling foreign currency reserves, a stagnating fisheries industry, and declining tax revenue, Nasheed contended, adding that the government could not afford to pay compensation to GMR.

The current administration might be planning to “settle the economic and financial system of the Maldives” with “large amounts of black money” from suspicious foreign investors, Nasheed continued, but such plans could not succeed due to domestic and international oversight.

Reiterating criticism of the government’s flagship special economic zone (SEZ) legislation, Nasheed said the Maldivian government would have less authority in the SEZs than the authority it exercised in Gan during British occupation.

The SEZs would be used for illegal businesses and “money laundering” by international criminal organisations, he claimed.

Nasheed had previously dubbed the legislation the ‘Artur Brothers bill’, referring to an infamous pair of Armenians linked with money laundering and drug trafficking who made headlines last year after they were photographed with cabinet ministers.

A system of decentralisation with local councils granted ownership of land was necessary for increasing home ownership, Nasheed continued, which was was essential for individual liberty.

The SEZ bill would, however, remove land from the jurisdiction of island councils, he explained.

The government maintains that SEZs with tax breaks and other incentives were necessary both for foreign investors to choose the Maldives over other developing nations and to launch ‘mega projects.’

“Castles in the air”

Referring to the Ihavandhippolhu Integrated Development Project or ‘iHavan’ – which President Yameen said would be undertaken once the SEZ bill is enacted into law – Nasheed said an assessment conducted by the World Bank at the request of former President Maumoon Abdul Gayoom’s administration found that it posed “very delicate problems”.

Development of a transhipment port in the northernmost atoll and carrying out activities there that were “contrary to Indian foreign policy” would adversely affect Maldivian independence and sovereignty, Nasheed warned.

Nasheed also argued that guest houses businesses on inhabited islands were more beneficial to the populace than luxury resorts on uninhabited islands.

The direct benefit to island populations from SEZs would be even smaller, he added.

The SEZs and the touted mega projects were “castles in the air,” Nasheed said, “[but] if you plant a small tree in your home, you will see it grow.”

Asked about several MDP MPs voting in favour of approving Muhthaz Muhsin as the new prosecutor general, Nasheed said he does not give instructions to the parliamentary group.

MPs did what they believed was right based on political considerations, he added, insisting that the MDP was too “resilient” with its ability to “absorb shocks” for the party to be split over the issue.

Division and strife within the ruling Progressive Party of Maldives, however, would reach “extreme” levels, Nasheed suggested, after its MPs voted for Muhsin in defiance of Gayoom’s appeal for them to vote for his nephew Maumoon Hameed.

Nasheed predicted that President Yameen will force his half-brother Gayoom into exile abroad, which had happened to former rulers in the past.

“Maldivian history is repeating again,” he said.

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“Yonder lies the greener pastures”: President Yameen inaugurates investor forum in Singapore

President Abdulla Yameen inaugurated the Maldives Investment Forum at Singapore’s Marina Bay Sands today with assurances to potential investors of the government’s commitment to fostering a business-friendly environment.

In his keynote address at the event, President Yameen said his administration was “cognisant of the needs of our investors and the requirements to strengthen and redefine the legal and regulatory environment governing foreign investments.”

“To address investment climate and to facilitate mega investments with attractive incentive packages, a Special Economic Zone Bill will be tabled in the parliament soon. Additionally, the Foreign Investment Act and Companies Act are being revised to cater the ever increasing needs of the modern foreign investors,” he said.

“Investment registration and facilitation has also been strengthened recently, with structuring of Invest Maldives as a one-stop shop for investment promotion, registration and facilitation.”

Over 160 companies and close to 200 representatives from 16 countries were present at the first overseas investor forum organised by the Maldives, Yameen noted, expressing gratitude for the “overwhelming support received for this forum.”

The new government has “embarked on an ambitious economic agenda to transform the economy” with the goal of becoming “a resilient, diversified high income economy in the next decade,” the president said.

He added that the government was committed to exploring “openings for increasing foreign investment flows to non-traditional sectors to lift Maldives beyond the image of a picturesque postcard.”

Yameen suggested that the success of the tourism industry over the past 40 years was due to “ingenuity, private enterprise and a liberal policy environment for foreign investments”.

Mega-projects

The projects for which the government was seeking investors were “designed to position Maldives to take advantage of its strategic location as a hub and gateway for commerce, innovation and creativity, linking rest of the globe with South Asia,” he explained.

Briefing participants on the five mega-projects envisioned by the government, Yameen said that the Ihavandhippolhu Integrated Development Project or iHavan “provides immense potential to capture substantive share of the trade and commercial opportunities in the South Indian Ocean and capture the trade flows crossing the seven degree channel.”

The government hoped to “engage private investors in the delivery of key pieces of infrastructure,” he said.

The other mega-projects or infrastructure development plans were concentrated in the Greater Male’ region, Yameen noted, which included the Hulhumale’ Youth City with further land reclamation and a maritime seaport project.

“With these investments, we foresee the region surrounding the Male’ City emerging as a vibrant commercial hub in the region,” he said.

The other mega-projects include the expansion of the Ibrahim Nasir International Airport (INIA), relocation and expansion of the central port to Thilafushi, and exploration for oil and gas.

Concluding his remarks, Yameen thanked foreign investors and senior businessmen from the Maldives for their “support and presence” at the forum, which gave the government “comfort and confidence” in its economic and trade policies.

Yameen said he hoped the forum would serve as “an avenue for enhancing understanding of the investment environment and opportunities in Maldives.”

He went on to congratulate Economic Minister Mohamed Saeed and his team for organising the forum and expressed gratitude to the key sponsors.

“Yonder lies the greener pastures,” he concluded by saying.

Yameen’s remarks were followed by presentations on the five mega-projects, a question and answer session with government ministers and speeches by Stephen Ho, President of Starwood Asia Pacific, Akhil Gupta, Chairman of Blackstone India, and William Ellwood Heinecke, CEO of Minor International.

President Yameen also launched the new Invest Maldives website at the forum this morning.

In his speech at the inauguration ceremony, Economic Development Minister Saeed revealed that the government was planning to hold a second investor forum in Shanghai, “the commercial capital of China.”

Moreover, at a press conference held at the forum, Tourism Minister Ahmed Adeeb reportedly revealed that the government has decided to lease islands for resort development for 99 years instead of the 50-year lease period at present.

Legislation will be submitted to parliament to authorise the extension, he said, which was intended to gain investor confidence.

Meanwhile, prior to departing for Singapore yesterday, President Yameen told the press that the government was certain it would have to compensate Indian infrastructure giant GMR for the premature termination of the concession agreement to develop and manage INIA.

Earlier this month, Yameen had said that the out-of-court settlement sought by GMR was too high, and that he would now await the outcome of arbitration proceedings in Singapore, which could take up to another two months.

The US$511 million contract awarded by the administration of former President Mohamed Nasheed was the single largest foreign direct investment in the Maldives’ history.

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