Billionaires investors line up to buy their slice of the Maldives
The Maldives archipelago is one of the most idyllic destinations on the planet with around 1,200 islands in the Indian Ocean surrounded by coral reefs abundant with sea life.
The Maldives archipelago is one of the most idyllic destinations on the planet with around 1,200 islands in the Indian Ocean surrounded by coral reefs abundant with sea life. It is also one of the world’s lowest-lying nations with many of its islands standing just 3 feet above a sea level predicted to rise up to 23 inches in the next 100 years. This has not, however, deterred billionaires and resort developers from investing in the area, and according to one company, inquiries keep rolling in.
The director of a firm listing islands Alan O’Connor says his company have seen a surge in enquiries for private islands recently in particular from wealthy Eastern Europeans and resort operators from Asia. O’Connor was in London last week where he met with among others a Russian billionaire who he says has a real passion for the region and is keen to develop an exclusive luxury resort to rival the best there is.
Maldivian islands cannot be bought outright nor can they be for exclusive private use. The Ministry of Tourism will however grant long leasehold interests (typically 50 years) for those willing to invest in resort developments and generally contribute to the economy by employing native Maldivians. Those who have experienced the Maldives should have no problem with this since the locals are among the friendliest and loyal in the hospitality industry.
Velaa Private Island resort is a typical if not decadent example of successful development in the area after a wealthy businessman from the Czech Republic bought the 20 hectare island and developed a collection of luxury villas which opened in November this year and can cost a staggering €24,000 per night. Earlier this year the Crown Prince of Saudi Arabia paid a eye watering €24 million just to rent 3 islands for a month when he anchored his 78 metre superyacht Tueq in the area after an official visit.
The cost involved in obtaining the leasehold can vary depending on the islands size and proximity to Male International Airport says O’Connor. An undeveloped island of around 14 acres can cost between 7 and 8 million USD if it is under half an hour by sea plane from Male where as something of around 30 acres further afield can be picked up for around 12 million.
The government prefer to see some sort of local partnership formed and taxes from profits paid locally. The local business profit tax (BPT) is relatively low at 15% and the administration has further encouraged investment by abolishing import tax on construction materials for the next 3 years.