Selling Land to Foreign Parties Through Residency, in a State of Financial Compulsion

Note: This article was originally published in Adhadhu. This blog edition carries the full references for the issues discussed.

A government that cannot finance its own housing projects is preparing to sell long-term residency in those same projects to the world’s wealthy in exchange for investment. Every Maldivian should pause and ask: what property of ours are we offering, to whom, and on what terms? And, in the name of our sovereignty, can it ever be recovered?

Today’s Fiscal Reality

With the Maldives’ fragile economy increasingly exposed to financial risks and adverse external conditions, the country faces a serious risk of debt distress.^[1] The ADB projects that economic growth will slow to just 1% this year,^[2] while external reports, with total public and publicly guaranteed debt standing above USD 9.5 billion, close to 130% of GDP and expenditure continuing to outpace revenue, make clear that debt will rise further in the period ahead.^[3]

The state’s usable reserves now hold barely enough foreign currency to cover a single month of imports, and the funds set aside in the Sovereign Development Fund (SDF) for debt repayment have fallen drastically, to a liquid balance estimated at only around USD 80 million.^[3] With a large share of the state’s foreign currency income already consumed by debt service, the need to increase the country’s foreign currency inflows is beyond dispute.

Chasing Political Ambition, Hoping to Escape the Curse of Debt

With the country’s financial future balanced on the edge of indebtedness and the government desperate for foreign currency and eager to attract foreign investors, large land reclamation projects have nevertheless been launched in four directions around Malé in the name of housing. Begun without a technically established, safe, and coherent plan — the largest of them awarded without competitive bidding, paid for partly by handing 70 hectares of reclaimed land to the contractors, and placed under Anti-Corruption Commission scrutiny within days of its groundbreaking^[4][5] — the financial future of these projects carries no certainty.

And with the works at Hulhumalé Phase 3, Giraavarufalhu, and Gulhifalhu standing as they are, and no published master plan, even the ‘hope’ of land yet to be reclaimed from Ras Malé’s unfilled lagoon has now been offered for sale. Under the ‘Pearl Residence’ programme introduced for the world’s wealthy,^[6] the government’s own marketing campaigns make it clear that this is a special investment product that bundles premium real estate with long-term residency visas.^[7]

Selling Land Ahead of the National Interest: Shaping the Law to Maximise Foreign Investment

What we are experiencing today is the stalling of strategically vital urban development projects for the Maldivian people, while, within just eighteen months, legal changes were made and the administrative framework was reshaped to open those very areas to foreign capital.

Under the Foreign Investment Act (Law 11/2024), which came into force in December 2024, foreign investors are granted the right to repatriate their capital and profits from the Maldives — restrictable only in a declared balance-of-payments or foreign-exchange crisis.^[8] In granting investors durable protection from the decisions of future governments, the Act gives precedence to rights derived from international treaties over domestic law where those treaties govern foreign investment, while no comparable protection whatsoever exists in that Act for the rights of Maldivian citizens. There is no condition obliging foreign-run real estate projects to provide housing for Maldivians, no employment quota, no arrangement for sharing profits with the state and no limit on the number of licences that may be issued.

After this law, the Urban Planning and Management Act (Law 15/2024) and the 13th Amendment to the Decentralization Act (Law 7/2010) vested in the President the power to determine national land-use and infrastructure planning policy^[9][10] and then, under the Urban Development Act ratified in December 2024, which concentrates all urban development powers in a single centre, near-absolute authority over Maldivian land was delivered to the President of the Republic.^[11] While these changes do not grant foreigners direct freehold ownership of Maldivian land, the ‘long-term leasehold’ (rental ownership) and ‘strata property’ (individually ownable unit) systems effectively hand the real economic and domestic control of those areas to foreign parties.

The final link added to this legal chain was the First Amendment to the Special Economic Zones Act (Law 18/2025), ratified in November 2025. It widened the framework of the SEZ regime, granted import-duty exemptions on capital goods brought in for zone development, added to the categories of SEZ a new concept called the ‘sustainable township’ (a large area of at least USD 500 million in investment, developed under a single management as a luxury real estate or integrated tourism development in which residential facilities and public services are established) and introduced a property transfer tax on strata-titled units capped at just 4%, alongside reduced income tax rates of 5% for the first decade.^[12][13]

The President’s Words and the Ministers’ Vision

President Dr Muizzu first announced the government’s plan for an investor residency programme in September 2024,^[7] and at the Maldives–Malaysia Business Forum in April 2025 he presented real estate as a priority sector for foreign investment, citing the new Foreign Investment Act as proof that the Maldives is, in his words, serious about welcoming foreign partners.^[14]

In April 2026, in an article published in the Maldives Independent under the title ‘Why real estate matters for the Maldives’, Housing Minister Dr Abdulla Muththalib wrote that the sector would attract substantial foreign and domestic investment and stated that beyond affordable housing it must also target investors and buyers of high-end ‘premium’ projects.^[15]

He noted that real estate would open the door to mortgages, real estate funds, and new financial products, broadening the financial sector. Presenting these as instruments allowing foreign investment to extract the financial value of Maldivian land, he wrote directly that President Muizzu’s restructuring of the Ministry’s mandate on 14 April 2026 was no ordinary administrative matter, but a ‘deliberate decision’.^[15]

Yet not a single principle, plan, economic or financial theory, or framework for protecting the national interest underlying the vision set out in that article has been submitted to the People’s Majlis, nor is any visible to the public.

The Road Other Nations Walked and Their Struggle to Turn Back

At the Maldives–Singapore Business Forum in July 2025, the Minister of Economic Development disclosed that long-term residency for foreigners investing in the Maldives would be granted under the programme now branded ‘The Maldives Pearl Residence’, and the Government of Maldives signed a partnership agreement with Henley & Partners to develop and implement the country’s first residency-by-investment programme and to design the visa framework for land-purchasing investors.^[16][17]

Regulatory authorities in the United States and Canada have raised concerns that citizenship-by-investment programmes of the kind Henley operates can be exploited by criminals as vehicles for illicit finance: the US Treasury’s FinCEN issued a formal advisory in 2014 warning that the St Kitts and Nevis programme was being abused by illicit actors, and Canada imposed visa requirements on St Kitts nationals the same year for related reasons.^[18] Henley is a company with a long record of approaching financially distressed countries and small island states at their weakest moment to introduce such programmes. It is enough to look at what this business delivered to other countries to foresee, with some clarity, the trajectory of the Maldives’ ‘Pearl Residence’.

Under its agreement with the Government of St Kitts and Nevis, Henley & Partners played a central role in establishing the Sugar Industry Diversification Foundation, which was financed through the country’s citizenship-by-investment programme. According to an OCCRP investigation, two of the fund’s most prominent failed investments had links to an associate of Henley’s chairman. OCCRP further alleged that the chairman offered the opposition strategic assistance and access to investors during an election campaign, apparently seeking to preserve the programme’s favourable arrangements if the opposition candidate won. Henley and its chairman denied wrongdoing. Although a parliamentary committee recommended further investigation, no criminal investigation directly targeting the company followed.^[19][20]

Malta’s Individual Investor Programme, for which Henley & Partners served as concessionaire, faced legal action by the European Commission in 2020. The Commission argued that granting EU citizenship in return for predetermined payments or investments, without requiring a genuine connection to the country, undermined the principle of sincere cooperation and the integrity of EU citizenship — and in April 2025 the Court of Justice of the European Union ruled the scheme unlawful, ending it.^[21]

Cyprus provides an even stronger warning. Its investor-citizenship scheme, introduced in 2007, was substantially expanded after the 2013 financial crisis to attract foreign capital, much of it through property investment. Weak oversight and rapid approvals subsequently exposed the programme to serious allegations of corruption, abuse and inadequate due diligence. In October 2020, Al Jazeera published undercover footage showing senior Cypriot political figures, including the Speaker of Parliament, appearing willing to assist a fictitious investor with a criminal conviction in obtaining citizenship. The Government abolished the programme with effect from November 2020.^[22] A subsequent official inquiry found in its interim report that approximately 51.8% of the citizenships examined had been granted unlawfully, and the final 780-page report of June 2021 concluded that more than half of the 6,779 passports issued should never have been granted.^[23] Cyprus has since continued to review cases and revoke citizenships granted to applicants who were ineligible or failed to satisfy the programme’s requirements.

Latvia’s programme, launched in 2010, bears the same industry’s fingerprints. Latvia’s failure was not a matter of rising housing prices; it was the question of who was buying the land. In the programme’s early years, it was Russian nationals who were purchasing property and gaining control, and the domestic and international problems this created forced the recognition that selling residency tied to land is not merely an economic transaction; it is a grave threat to national security, akin to ceding parts of the nation’s territory to the citizens of a hostile power. On 11 June 2026, Latvia’s parliament voted to abolish the real estate route for residence permits under a new Immigration Law — though the President returned the law for a second reading on 19 June, the direction of travel is unmistakable.^[24][25]

Portugal, Spain, and Greece launched their golden visas after financial crisis without Henley’s involvement. But the company became one of the largest parties that ranked those programmes and advertised them to the world’s wealthy. All three programmes nevertheless met the same fate. Portugal abolished the real-estate visa route in October 2023; Spain, declaring that housing is a right of the people rather than a commodity for commercial profit, shut down its entire programme in April 2025; and Greece was forced to raise its minimum investment threshold severalfold to limit the damage inflicted on basic housing.^[26]

Henley & Partners and the Israeli Market

While Henley & Partners maintains a dedicated investment platform in the Hebrew language,^[27] the joint statement issued by the Government of Maldives and Henley on the programme launched after the Government’s own decision to bar Israeli passport holders from entering the Maldives^[28] was distributed through PR Newswire’s Israel regional platform. This is evident from the statement’s inclusion of Israel’s regional code and the country-specific contact channels embedded in it.^[29]

These facts do not, at this point, directly prove that Israeli citizens will receive Maldivian residency indeed, an industry review of the programme published in August 2025 recorded that Israeli passport holders have been excluded from it since April 2025.^[30] But in the Greek programme that Henley marketed, Israeli investors became the fastest-growing group of applicants.^[31] Even though Israeli passport holders are barred from entering the Maldives under the Immigration Act, in the shadow of the Maldives’ corporate and dual-nationality arrangements the entry ban itself does not reach dual citizens travelling on a second passport^[32]; there remains room for such matters to be arranged from behind the curtain of the law. Given this company’s long record of bringing into its business parties barred even in the advanced countries of Europe and given that the government has never published the programme’s eligibility rules in law or regulation, the fear that such a path could open through the Maldives’ weak administrative arrangements is acute.

Protecting Future Generations from the Mistakes of Today

Although the Maldives’ financial position is fragile, the country’s difficulties are not beyond the reach of prudent, transparent and honest decision-making. Yet recent legislative changes and public statements by government leaders indicate a clear intention to link long-term residency with investment in Maldivian real estate. This direction requires the highest level of parliamentary scrutiny and public accountability, particularly when laws are being amended to facilitate it.

At a time of severe foreign-currency pressure, transferring long-term economic rights and effective control over scarce land to foreign investors in return for short-term financial relief carries consequences that may be difficult, or even impossible, to reverse. The Maldives has only about 298 square kilometres of natural land.^[33] Our land is not merely a commercial asset: it is inseparable from national sovereignty, housing security, social stability and the independence of future generations.

Foreign investment can contribute to economic development, but it must operate within a transparent legal and financial framework that protects the enduring interests of Maldivians. Until such safeguards are established, including parliamentary oversight, public disclosure, strict limits on land rights and protection of affordable housing, the State must not exchange long-term control over Maldivian land for a temporary inflow of foreign currency. A financial crisis may eventually be overcome; land committed on unfavourable terms may never be recovered.

References

[1] IMF, ‘IMF Staff Completes 2026 Article IV Mission to the Maldives’, Press Release No. 26/208, 16 June 2026. https://www.imf.org/en/news/articles/2026/06/16/pr-26208-maldives-imf-staff-completes-2026-article-iv-mission

[2] Asian Development Bank, ‘ADB Projects Maldives Growth to Slow Sharply Due to the Middle East Conflict’, 10 April 2026; Asian Development Outlook, April 2026 (growth of 1.0% in 2026; public debt close to 130% of GDP after the April sukuk repayment). https://www.adb.org/news/adb-projects-maldives-growth-slow-sharply-due-middle-east-conflict

[3] World Bank, Maldives Development Update, October 2025 (public and publicly guaranteed debt of USD 9.5 billion, 126.9% of GDP; usable reserves below one month of imports; SDF liquid balance of about USD 80 million as of July 2025). https://www.worldbank.org/en/country/maldives/publication/maldives-development-update-october-2025

[4] Edition.mv, ‘ACC to probe Fushidhiggaru Falhu project’, 21 December 2023 (contract awarded without tender; MVR 400m removed from the 2024 budget; funding undisclosed). https://edition.mv/report/30725

[5] PSM News, ‘Reclamation of Ras Male’ being carried out under corporate guarantee’, 21 December 2023 (70 hectares of land granted to contractors as compensation for reclaiming 1,153 hectares). https://psmnews.mv/en/130342

[6] Government of Maldives, The Maldives Pearl Residence official portal. https://www.maldivespearl.gov.mv

[7] SunOnline International, ‘Maldives to officially launch investor residency program in April 2026’, 6 November 2025 (programme unveiled by Minister Saeed at the 19th Global Citizenship Conference, London; presidential announcement of the programme in September 2024). https://en.sun.mv/100561

[8] CTL Strategies, ‘The New Foreign Investment Act Ratified’, September 2024 (Law 11/2024, ratified 3 September 2024, in force 3 December 2024: repatriation rights subject to balance-of-payments exception; precedence of international treaties). https://www.ctlstrategies.com/latest/the-new-foreign-investment-act/

[9] Corporate Maldives, ‘Maldives’ New Planning Laws: A Step Forward or a Setback for Decentralisation?’, 9 September 2024 (Urban Planning and Management Act, Law 15/2024; national infrastructure planning policy determined by the President). https://corporatemaldives.com/maldives-new-planning-laws-a-step-forward-or-a-setback-for-decentralisation/

[10] President’s Office, ‘The President ratifies 13th Amendment to the Decentralization Act’, 8 September 2024. https://presidency.gov.mv/Press/Article/31547

[11] Atoll Times, ‘President ratifies Urban Development Act’, December 2024 (national urban development policy formulated by the President on the recommendation of the Cabinet). https://atolltimes.mv/post/news/10637 [Gazette law number to be confirmed against the Government Gazette]

[12] President’s Office, ‘President ratifies First Amendment to the Special Economic Zone Act’, November 2025 (sustainable townships: minimum USD 500m investment; integrated tourism or large-scale luxury real estate). https://presidency.gov.mv/Press/Article/35614

[13] CTL Strategies, ‘First Amendment to SEZ Act Introduces New Property Transfer Tax’, December 2025 (Law 18/2025, ratified 10 November 2025: 4% property transfer tax on strata-title long leases; progressive 1–4% rates for residential units; 5%/10% income tax concessions; import-duty exemptions on capital goods). https://www.ctlstrategies.com/latest/sez-act-introduces-new-property-transfer-tax/; see also SEZ Maldives, ‘First Amendment to the SEZ Act – An Overview’, December 2025. https://sez.gov.mv/wp-content/uploads/2025/12/First-Amendment-to-the-SEZ-Act-An-Overview.pdf

[14] The Malaysian Reserve / Bernama, ‘President Dr Mohamed Muizzu: Maldives undertakes reforms to attract investors’, 28 April 2025 (keynote at the Maldives–Malaysia Business Forum 2025 naming real estate among priority sectors and citing the Foreign Investment Law). https://themalaysianreserve.com/2025/04/28/president-dr-mohamed-muizzu-maldives-undertakes-reforms-to-attract-investors/

[15] Dr Abdulla Muththalib, ‘Comment: why real estate matters for the Maldives’, Maldives Independent, 26 April 2026. https://maldivesindependent.com/opinion/comment-why-real-estate-matters-for-the-maldives-8b8e

[16] Henley & Partners, ‘Maldives and Henley & Partners Sign Landmark Partnership Agreement to Launch Pioneering Residence by Investment Program’, press release, 1 July 2025. https://www.henleyglobal.com/newsroom/press-releases/maldives-henley-partners-launch-pioneering-residence-by-investment-program

[17] Ministry of Economic Development and Trade, stamped press release of 1 July 2025 (published 4 July 2025), listing a Ministry staff member as the Maldivian media contact. https://trade.gov.mv/en/maldives-and-henley-partners-sign-landmark-partnership-agreement-to-launch-pioneeringresidence-by-investment-program/

[18] US Department of the Treasury, FinCEN Advisory FIN-2014-A004, ‘Advisory on the Abuse of the Citizenship-by-Investment Program of St. Kitts and Nevis’, May 2014; Government of Canada, imposition of visa requirement on St Kitts and Nevis nationals, November 2014.

[19] OCCRP, ‘The Passport King’ investigation series on Henley & Partners and its chairman, February 2022. https://www.occrp.org

[20] Maldives Independent, ‘Ten months of silence on the firm behind the Pearl Residence’, June 2026 (summary of the OCCRP findings on St Kitts, Malta and Cyprus, and of Henley’s role in the Pearl Residence). https://maldivesindependent.com/opinion/ten-months-of-silence-on-the-firm-behind-the-pearl-residence-f7f3

[21] European Commission, infringement proceedings against Malta on investor citizenship, October 2020; Court of Justice of the European Union, Commission v Malta (Case C-181/23), judgment of 29 April 2025.

[22] Al Jazeera Investigative Unit, ‘The Cyprus Papers Undercover’, October 2020; programme abolished with effect from 1 November 2020.

[23] Al Jazeera, ‘Most Cyprus passports issued in investment scheme were “illegal”’, 16 April 2021 (interim finding of 51.81%); AP/Euronews, ‘Cyprus wrongly issued passports despite warnings, probe concludes’, 7–8 June 2021 (final 780-page Nicolatos report on the 6,779 passports issued 2007–2020). https://www.aljazeera.com/news/2021/4/16/half-of-cyprus-passports-in-cash-scheme-were-illegal-inquiry

[24] COBALT Legal, ‘The new Immigration Law in Latvia’, 16 June 2026 (Saeima passed the new Immigration Law on 11 June 2026, removing the real estate and bank deposit residence routes). https://www.cobalt.legal/news-cases/new-immigration-law-latvia-employers-investors-temporary-residence-holders/

[25] IMI Daily, ‘Latvia’s Parliament Scraps 2 Golden Visa Options, Adds Fund Option; President Sends Law Back’, June 2026 (President Rinkēvičs returned the law to the Saeima on 19 June 2026). https://www.imidaily.com/europe/latvias-parliament-scraps-2-golden-visa-options-adds-fund-option-president-sends-law-back/

[26] Portugal: Law No. 56/2023 (‘Mais Habitação’), October 2023, ending the real-estate golden visa route; Spain: abolition of the golden visa programme with effect from 3 April 2025; Greece: Law 5100/2024, raising minimum investment thresholds to up to €800,000 from September 2024.

[27] Henley & Partners, Hebrew-language platform. https://www.henleyglobal.com/he

[28] President’s Office, ‘President ratifies Third Amendment to the Maldives Immigration Act, prohibiting entry of Israeli passport holders’, 15 April 2025. https://presidency.gov.mv/Press/Article/33500

[29] PR Newswire distribution of the 1 July 2025 joint release, including its Israel regional edition (prnewswire.co.il) carrying the Israeli contact number +972-77-2005042 [author’s archived copy; verify live URL before publication].

[30] International Investment, ‘Maldives Residence by Investment: Real Estate, Business Projects, and Bank Deposits’, 19 August 2025 (‘Since April 2025, Israeli passport holders are excluded from the program’). https://internationalinvestment.biz/en/business/6120-maldives-residence-by-investment-real-estate-business-and-bank-deposits.html

[31] GTP Headlines, ‘Greece’s Golden Visa Sees Investor Turn as Turkish and Israeli Demand Rises’, 12 November 2025, citing Greek Migration and Asylum Ministry data; ETIAS.com, 2024 (Israeli applicants recorded the highest year-on-year growth, +70%). https://news.gtp.gr/2025/11/12/greeces-golden-visa-sees-investor-turn-as-turkish-and-israeli-demand-rises/

[32] SunOnline International, coverage of the Majlis committee stage of the Third Amendment, 15 April 2025 (removal of the clause covering Israeli dual citizens). https://see.mv/95965

[33] World Bank, Maldives country data (land area approximately 298 km², spread across some 1,190 islands).