A Maldives resort acquisition can be structured as an asset deal or a share deal, and the legal consequences are materially different. In an asset acquisition, the buyer acquires identified assets or rights while the seller’s company remains in place. In tourism transactions, that route can involve approvals for the transfer of regulated assets such as resort leases and licences. In a share acquisition, the company continues to own its assets, contracts and operating relationships; what changes is the ownership of the company itself.
Resort acquisitions
Start due diligence with structure
Due diligence should therefore begin with structure. For an asset deal, examine the government lease, addenda, operating licence, development approvals, mortgages, subleases, management arrangements and any rights that require regulatory consent to transfer. For a share deal, add corporate title, shareholder rights, liabilities, tax exposures, financing covenants, material contracts, employee obligations and change-of-control provisions.
Plan for employment continuity
Employment continuity can also matter. The Maldives investment guide notes that where a business changes ownership, is assigned, leased or transferred, employment arrangements may continue with the new owner under the Employment Act framework. That should be reflected in transaction planning rather than treated as a post-completion issue.
Know what will pass at closing
Price follows legal reality. We focus due diligence on what will actually pass at closing, what needs consent, what remains with the seller and what could restrict the buyer after completion.
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