Demand urgent action against mandatory US dollar conversion in Maldives
The Issue
PETITION TO THE EXECUTIVE BOARD OF THE MALDIVES ASSOCIATION OF TOURISM INDUSTRY (MATI)
SUBJECT: URGENT DEMAND FOR ROBUST LEGAL AND STRATEGIC ACTION AGAINST THE AMENDED FOREIGN EXCHANGE LEGISLATION MANDATING 40% MANDATORY US DOLLAR CONVERSION
The Maldivian tourism industry is facing a serious challenge following the introduction of legislation requiring tourism establishments to convert 40% of their US Dollar earnings through commercial banks.
We recognise that the Maldives faces genuine foreign exchange challenges and that the Government may need to take measures to address them.
However, a blanket 40% conversion requirement does not adequately reflect the financial realities of the tourism industry.
We are calling on the Maldives Association of Tourism Industry (MATI) to go beyond statements and lobbying and take decisive action—including legal action where justified—to protect the future of Maldivian tourism.
Why this matters
Maldivian resorts and hotels earn much of their revenue in US Dollars. But they also have substantial obligations that require US Dollars.
These include:
Taxes and statutory payments
Salaries, expatriate remuneration and remittances
Service-charge payments
Imported food, beverages and essential supplies
Fuel and energy
Equipment, machinery and spare parts
Payments to local and international suppliers
Construction and capital expenditure
Financing and debt-service obligations
Payments to overseas service providers
Foreign investor and shareholder obligations
A resort's gross USD revenue is therefore not the same as disposable USD income.
Requiring a resort to convert 40% of its gross USD earnings may force it to sell USD that it subsequently needs to meet legitimate USD obligations.
This can create a circular burden:
USD earned → USD converted into MVR → USD needed again → USD purchased again
The result can be additional transaction costs, exchange-rate exposure, cash-flow pressure and administrative burdens.
Protecting investors means protecting the entire tourism industry
The Maldives' tourism industry has been built through decades of investment by Maldivian and international investors who have committed substantial capital and accepted significant commercial risks.
Investors make these commitments based on expectations of:
Regulatory and legal stability
Predictable taxation and financial policies
Ability to manage and repatriate foreign currency
Ability to meet contractual and financing obligations
Protection of investments
Long-term confidence in the Maldivian tourism market
Investor confidence is not simply an issue for investors. It is an issue for everyone who depends on tourism.
When investors lose confidence, the consequences can affect new resort developments, expansions, renovations, refinancing, employment, supplier contracts and reinvestment.
Workers, suppliers, contractors, transport operators, service providers and communities all depend on a financially sustainable tourism industry. The original petition emphasises that the tourism ecosystem extends far beyond resort owners and operators.
A concern about consultation and regulatory predictability
We are also concerned about the speed and manner in which these legislative changes were introduced, approved and ratified.
Measures with potentially significant consequences for an industry that generates substantial foreign exchange, employment and economic activity should be developed through meaningful consultation with the businesses and stakeholders directly affected.
The policy should recognise the difference between:
Gross revenue and actual income
Foreign currency earnings and foreign currency requirements
Revenue and operating cash flow
Different business, financing and ownership structures
Regulatory predictability is fundamental to maintaining investor confidence.
What we are asking MATI to do
We call upon the Maldives Association of Tourism Industry (MATI) to urgently:
1. Pursue a legal assessment and court challenge
Commission independent senior legal counsel to assess the constitutionality, legality, procedural validity, proportionality and other potential legal grounds relating to the amendments.
Where credible legal grounds exist, MATI should initiate or support appropriate court proceedings, including seeking interim relief or suspension of enforcement where legally available.
2. Commission an independent economic impact assessment
Obtain an independent assessment of the actual impact of the 40% requirement on resorts and the wider tourism economy, including cash flow, USD obligations, employment, suppliers, profitability, investment and investor confidence.
3. Develop a practical alternative
MATI should work with Government and the Maldives Monetary Authority to propose a workable alternative that addresses the country's foreign exchange needs without undermining the financial sustainability of tourism businesses.
Possible approaches should include consideration of:
A substantially lower mandatory conversion percentage
Recognition of qualifying USD-denominated statutory payments
Deduction of verified USD operational expenses
Exemptions or adjustments for businesses with demonstrated USD obligations
Appropriate transitional arrangements
The original petition proposes, for consideration, a conversion cap of no more than 10%, subject to appropriate technical and legal assessment.
4. Bring the industry together
MATI should convene an Extraordinary General Meeting to discuss the legislation, present independent legal and economic assessments, determine the industry's collective position and provide a clear mandate for further action.
5. Provide members with a clear roadmap
MATI should clearly communicate:
The legal advice obtained
The economic assessment undertaken
The actions it intends to take
Its engagement with Government and regulators
Any proposed court proceedings
The alternative framework being proposed
A clear timeline for action
This is about the future of Maldivian tourism
We are not asking MATI to oppose legitimate national economic objectives.
We recognise the foreign exchange challenges facing the Maldives.
We are asking for a solution that is practical, proportionate, sustainable and informed by the financial realities of the industry that generates a significant portion of the country's foreign exchange.
Tourism is not sustained by resort owners alone.
It is sustained by:
Investors.
Workers.
Suppliers.
Contractors.
Transport operators.
Farmers and fishermen.
Travel businesses.
Airlines.
Service providers.
Communities.
And thousands of families whose livelihoods depend on tourism.
Protecting tourism means protecting all of them.
Our demand
We call upon MATI to use every appropriate and lawful means available to protect the future of Maldivian tourism, including:
Strong industry advocacy.
Independent economic analysis.
Meaningful engagement with Government.
A practical alternative to the current framework.
And legal action, including a court challenge, where legally justified.
This is not simply a dispute about a percentage of foreign currency.
It is about the sustainability of Maldivian tourism, investor confidence, thousands of livelihoods and the future economic strength of the Maldives.
SIGN THIS PETITION
If you are a resort owner, investor, tourism professional, employee, supplier, contractor, service provider, entrepreneur, or anyone whose livelihood and future are connected to Maldivian tourism, add your voice.
We call on MATI to stand up for the entire tourism ecosystem and take decisive action before the consequences become more difficult to reverse.
Protect tourism.
Protect investment.
Protect livelihoods.
Protect the future of the Maldives.
20
The Issue
PETITION TO THE EXECUTIVE BOARD OF THE MALDIVES ASSOCIATION OF TOURISM INDUSTRY (MATI)
SUBJECT: URGENT DEMAND FOR ROBUST LEGAL AND STRATEGIC ACTION AGAINST THE AMENDED FOREIGN EXCHANGE LEGISLATION MANDATING 40% MANDATORY US DOLLAR CONVERSION
The Maldivian tourism industry is facing a serious challenge following the introduction of legislation requiring tourism establishments to convert 40% of their US Dollar earnings through commercial banks.
We recognise that the Maldives faces genuine foreign exchange challenges and that the Government may need to take measures to address them.
However, a blanket 40% conversion requirement does not adequately reflect the financial realities of the tourism industry.
We are calling on the Maldives Association of Tourism Industry (MATI) to go beyond statements and lobbying and take decisive action—including legal action where justified—to protect the future of Maldivian tourism.
Why this matters
Maldivian resorts and hotels earn much of their revenue in US Dollars. But they also have substantial obligations that require US Dollars.
These include:
Taxes and statutory payments
Salaries, expatriate remuneration and remittances
Service-charge payments
Imported food, beverages and essential supplies
Fuel and energy
Equipment, machinery and spare parts
Payments to local and international suppliers
Construction and capital expenditure
Financing and debt-service obligations
Payments to overseas service providers
Foreign investor and shareholder obligations
A resort's gross USD revenue is therefore not the same as disposable USD income.
Requiring a resort to convert 40% of its gross USD earnings may force it to sell USD that it subsequently needs to meet legitimate USD obligations.
This can create a circular burden:
USD earned → USD converted into MVR → USD needed again → USD purchased again
The result can be additional transaction costs, exchange-rate exposure, cash-flow pressure and administrative burdens.
Protecting investors means protecting the entire tourism industry
The Maldives' tourism industry has been built through decades of investment by Maldivian and international investors who have committed substantial capital and accepted significant commercial risks.
Investors make these commitments based on expectations of:
Regulatory and legal stability
Predictable taxation and financial policies
Ability to manage and repatriate foreign currency
Ability to meet contractual and financing obligations
Protection of investments
Long-term confidence in the Maldivian tourism market
Investor confidence is not simply an issue for investors. It is an issue for everyone who depends on tourism.
When investors lose confidence, the consequences can affect new resort developments, expansions, renovations, refinancing, employment, supplier contracts and reinvestment.
Workers, suppliers, contractors, transport operators, service providers and communities all depend on a financially sustainable tourism industry. The original petition emphasises that the tourism ecosystem extends far beyond resort owners and operators.
A concern about consultation and regulatory predictability
We are also concerned about the speed and manner in which these legislative changes were introduced, approved and ratified.
Measures with potentially significant consequences for an industry that generates substantial foreign exchange, employment and economic activity should be developed through meaningful consultation with the businesses and stakeholders directly affected.
The policy should recognise the difference between:
Gross revenue and actual income
Foreign currency earnings and foreign currency requirements
Revenue and operating cash flow
Different business, financing and ownership structures
Regulatory predictability is fundamental to maintaining investor confidence.
What we are asking MATI to do
We call upon the Maldives Association of Tourism Industry (MATI) to urgently:
1. Pursue a legal assessment and court challenge
Commission independent senior legal counsel to assess the constitutionality, legality, procedural validity, proportionality and other potential legal grounds relating to the amendments.
Where credible legal grounds exist, MATI should initiate or support appropriate court proceedings, including seeking interim relief or suspension of enforcement where legally available.
2. Commission an independent economic impact assessment
Obtain an independent assessment of the actual impact of the 40% requirement on resorts and the wider tourism economy, including cash flow, USD obligations, employment, suppliers, profitability, investment and investor confidence.
3. Develop a practical alternative
MATI should work with Government and the Maldives Monetary Authority to propose a workable alternative that addresses the country's foreign exchange needs without undermining the financial sustainability of tourism businesses.
Possible approaches should include consideration of:
A substantially lower mandatory conversion percentage
Recognition of qualifying USD-denominated statutory payments
Deduction of verified USD operational expenses
Exemptions or adjustments for businesses with demonstrated USD obligations
Appropriate transitional arrangements
The original petition proposes, for consideration, a conversion cap of no more than 10%, subject to appropriate technical and legal assessment.
4. Bring the industry together
MATI should convene an Extraordinary General Meeting to discuss the legislation, present independent legal and economic assessments, determine the industry's collective position and provide a clear mandate for further action.
5. Provide members with a clear roadmap
MATI should clearly communicate:
The legal advice obtained
The economic assessment undertaken
The actions it intends to take
Its engagement with Government and regulators
Any proposed court proceedings
The alternative framework being proposed
A clear timeline for action
This is about the future of Maldivian tourism
We are not asking MATI to oppose legitimate national economic objectives.
We recognise the foreign exchange challenges facing the Maldives.
We are asking for a solution that is practical, proportionate, sustainable and informed by the financial realities of the industry that generates a significant portion of the country's foreign exchange.
Tourism is not sustained by resort owners alone.
It is sustained by:
Investors.
Workers.
Suppliers.
Contractors.
Transport operators.
Farmers and fishermen.
Travel businesses.
Airlines.
Service providers.
Communities.
And thousands of families whose livelihoods depend on tourism.
Protecting tourism means protecting all of them.
Our demand
We call upon MATI to use every appropriate and lawful means available to protect the future of Maldivian tourism, including:
Strong industry advocacy.
Independent economic analysis.
Meaningful engagement with Government.
A practical alternative to the current framework.
And legal action, including a court challenge, where legally justified.
This is not simply a dispute about a percentage of foreign currency.
It is about the sustainability of Maldivian tourism, investor confidence, thousands of livelihoods and the future economic strength of the Maldives.
SIGN THIS PETITION
If you are a resort owner, investor, tourism professional, employee, supplier, contractor, service provider, entrepreneur, or anyone whose livelihood and future are connected to Maldivian tourism, add your voice.
We call on MATI to stand up for the entire tourism ecosystem and take decisive action before the consequences become more difficult to reverse.
Protect tourism.
Protect investment.
Protect livelihoods.
Protect the future of the Maldives.
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Petition created on 14 September 2026