The Maldives is moving to expand its tourism model with proposed amendments to the Special Economic Zones (SEZ) Act.

The changes create a new category of Sustainable Townships, designed for large-scale, integrated developments that combine hospitality, residential real estate, health, education, and renewable energy infrastructure.

The government’s aim is to diversify the tourism sector and attract next-generation projects that complement the traditional resort model.

Sustainable Townships are expected to generate long-term opportunities in premium real estate tourism, wellness and medical services, and education-focused travel. By integrating residential, commercial, and public service components, these projects broaden revenue streams, create employment across multiple sectors, and establish the Maldives as a destination for long-stay visitors and high-value investors.

Only projects exceeding USD 500 million will qualify, ensuring the framework targets high-impact investments capable of delivering national benefits. Developers will receive limited, time-bound incentives, including a 5 percent income tax rate for the first 10 years and 10 percent for the following decade. A real estate transfer tax is also introduced, starting at 1 percent for the first transaction and rising to 4 percent by the third. All other taxes, including Green Tax, GST, and land lease rent, remain fully applicable.

To qualify for incentives, developments must include educational facilities, healthcare infrastructure, food security initiatives, and renewable energy projects. Linking incentives to these strategic outcomes ensures that large-scale investments contribute directly to national priorities, from energy transition and skills development to sustainable economic growth.

The SEZ amendment also introduces a transparent, rules-based framework, clearly defining eligibility criteria, investment thresholds, and project requirements. This approach provides predictability for investors while encouraging innovation, sustainability, and measurable socio-economic impact.

Global tourism trends are shifting toward integrated, mixed-use developments that combine short-stay leisure, long-term residency, wellness, and education. Destinations across Asia, the Middle East, and the Caribbean are already capturing this segment. Sustainable Townships are intended to complement the Maldives’ traditional resorts rather than replace them, adding new revenue streams and strengthening the country’s market resilience.

The reforms are part of the Maldives’ Vision 2040 strategy, which emphasizes economic diversification, social development, and environmental sustainability. Large-scale integrated developments that meet sustainability, health, and education objectives are central to this vision. They provide a platform for strategic global investment while enhancing domestic infrastructure and capacity.

For more than 50 years, the Maldives has been a global benchmark for luxury island tourism. These SEZ reforms reflect a deliberate shift toward a next-generation tourism economy - one that leverages sustainable, integrated developments to secure long-term growth, generate employment, and maintain the country’s global competitiveness.

The policy signals to investors and the international tourism market that the Maldives is not only preserving its premium resort legacy but also adapting to evolving global demand for lifestyle, wellness, and integrated tourism experiences. The proposed amendments to the SEZ Law provide a forward-looking framework for innovation, high-value investment, and strategic development, positioning the Maldives as a leader in global tourism for decades to come.