Joint ventures are an accepted route for foreign investment in the Maldives, but the investment approval is only one part of the relationship. The shareholders’ agreement must answer the commercial questions that become difficult once land rights, financing, construction contracts, brands and operating revenues are attached to the company.
Joint ventures
Design governance around the project
Governance should be designed around the project. Reserved matters can cover changes to the resort lease, financing, material contracts, budgets, capital expenditure, appointment or removal of the operator, sale of the resort, related-party transactions and changes to the approved foreign-investment structure. Funding provisions should distinguish equity commitments, shareholder loans, third-party debt and the consequences if one investor fails to fund.
Protect participation and exit
Minority protection also deserves careful drafting. The Maldives Companies Act framework includes information and participation rights and legal mechanisms addressing unfair prejudice and derivative claims. A shareholders’ agreement can complement those statutory protections with board rights, consent thresholds, anti-dilution mechanics, pre-emption, transfer restrictions, deadlock procedures, tag-along and drag-along rights.
Keep the venture within its approvals
Foreign-investment compliance should remain visible throughout the life of the venture. Current legal guidance notes that changes in ownership, scope or capital structure of an approved foreign investment can trigger reporting and prior-approval requirements. We therefore draft governance and exit provisions to work with—not against—the regulatory structure of the investment.
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