Mon May 05 16:49:44 UTC 2025: ## Maldives to Build $8.8 Billion Financial Free Zone to Diversify Economy

**Malé, Maldives –** The Maldives, facing economic challenges despite a thriving tourism sector, has announced an ambitious plan to establish an $8.8 billion international financial center (MIFC). The project, a joint venture with Dubai-based MBS Global Investments, aims to diversify the island nation’s economy beyond its reliance on tourism.

The MIFC, slated for completion by 2030, will include residential and office towers, a convention center, and hotels. It will offer tax-free incentives, including no corporate tax, tax-free inheritance, and no residency requirements, positioning Malé as a major business hub in the Indian Ocean. The government projects revenue exceeding $1 billion annually within five years.

The move comes as the Maldives grapples with foreign exchange shortages and a potential debt crisis, exacerbated by the COVID-19 pandemic. While the IMF has urged fiscal consolidation, the Maldives has opted against an IMF bailout, instead implementing government spending cuts. The country’s foreign debt currently stands at approximately 45% of its GDP, with significant portions owed to both China and India. Both countries have recently offered financial assistance to the struggling nation. Despite these challenges, the Maldives expects 5% economic growth in 2025. However, the IMF cautions that this positive outlook masks significant underlying risks.

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