President Dr. Mohamed Muizzu has ratified the bill governing the leasing of lagoons and uninhabited islands in the Maldives.

The bill was passed by the People’s Majlis during its sitting on the 26th of this month.

The legislation was approved with the votes of 47 members present at the sitting. The bill details the frameworks for leasing uninhabited islands and lagoons for various purposes, as well as allocating islands not designated for specific purposes under the varuvaa (usufruct) lease system.

With the ratification of this bill by President Dr. Mohamed Muizzu, the previous Maldives Uninhabited Islands Act, which previously governed the lease and varuvaa allocation of islands and lagoons, has been repealed. Under the new law, as previously established, the President holds the authority to designate uninhabited islands and lagoons for specific purposes.

The President may designate uninhabited islands for tourism, fisheries, agriculture, industrial, economic, and social purposes, state purposes, and other special purposes specified by law.

With the exception of uninhabited islands designated for tourism and industrial purposes, the leasing and varuvaa allocation of uninhabited islands within council jurisdictions will be managed by the respective island council. However, lagoons will be leased for various purposes by the ministry mandated with the respective lagoon.

Under the new Act, an uninhabited island can be leased for commercial purposes to companies, partnerships, or sole proprietorships registered in the Maldives, as well as foreign companies or partnerships re-registered in the country. For non-commercial purposes, uninhabited islands can be leased to any Maldivian citizen, registered business, or association.

Lagoons may be leased for large-scale and medium-scale industrial activities, economic projects with an investment of not less than MVR 1 million, and aquaculture and related initiatives.

The law stipulates that an uninhabited island designated for specific purposes can be leased for an initial term of 21 years. However, upon request for an extension, the lease period may be extended up to a total duration not exceeding 50 years.

The Act also specifies island lease rates and lagoon acquisition costs, noting that acquisition fees for uninhabited islands allocated for various purposes will be determined by the Ministry of Finance.

Under this law, only islands not designated for specific purposes may be allocated under the varuvaa system. A varuvaa lease may be granted for a maximum term of five years, and any extension may be granted for up to an additional five years.

If an unlawful act is committed on an island leased under the varuvaa system, a fine not exceeding MVR 500,000 may be imposed. For violations committed on leased uninhabited islands or lagoons, fines of up to MVR 1,000,000 may be levied.

Agreements for uninhabited islands, lagoons, and varuvaa islands leased under the previous law prior to the enactment of this Act will remain valid. However, with the exception of the mechanisms for paying rent and varuvaa dues, all other provisions of the new Act will apply to those existing agreements.