Tax-free Maldives financial centre ‘will not compete’ with Dubai and Abu Dhabi hubs

The project, being built by Dubai-based MBS Global, is expected to create 16,000 jobs, CEO says

The $8.8 billion MIFC project aims to attract global financial institutions, FinTech companies and entrepreneurs. Photo: MBS Global

The Maldives International Financial Centre will not compete with the Dubai International Financial Centre, Abu Dhabi's ADGM or other financial hubs, according to the chief executive of the company developing it.

The $8.8 billion project announced this week is being developed by Dubai-based MBS Global Investments, the family office of Qatar's Sheikh Nayef bin Eid Al Thani, along with the Maldives government.

The project, which will be located in Male, aims to attract global financial institutions, FinTech companies and entrepreneurs. Expected to be completed in 2030, it will feature three residential and office towers along with hotels, retail outlets and a school.

“In terms of financial centres … it's never really a competition,” chief executive Nadeem Hussain told The National in an interview this week.

“I think financial centres can create an ecosystem where many of the people that operate out of them have multiple geographical locations in terms of their operations. Obviously, with Asia, GCC and Africa, the Maldives is ideally located for maybe some of the emerging economy people who are involved in the types of businesses that we would support.

“So we're offering just another location for them, which is complementing the existing financial centres. We don't see that we would be competing with them. I’m sure when we start to operate, we will be working with the other financial centres to see what type of collaborations we can enter into.”

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The MIFC will seek to attract traditional financial institutions as well as those operating in virtual assets.

Centres such as ADGM have a robust regulatory framework for crypto and digital asset activities. The Dubai Financial Services Authority also has a crypto token regime that provides a clear framework for businesses operating in the DIFC to ensure financial stability and consumer protection.

“Financial centres are now starting to mature in terms of how they are able to accommodate those asset classes,” Mr Hussain said.

“Digitalisation is where everything's going, so you have to cater to that new virtual asset kind of class. So yes, tokenisation, cryptocurrencies, these will be, obviously, heavily monitored and regulated, but that's the way forward in financial centres. A big part of our framework and who we're attracting will be involved in that.”

Tax haven

The MIFC will have no residency requirements and will offer no corporate tax, tax-free inheritance and ownership. Residents will also have access to multi-currency banking and offshore private banking.

Tokenisation, cryptocurrencies, these will be, obviously, heavily monitored and regulated, but that's the way forward in financial centres

Nadeem Hussain,
chief executive of MBS Global Investmentsments

Such incentives are key to attracting more businesses and entrepreneurs, but the centre will focus on regulations, Mr Hussain stressed.

“I think people appreciate that you can have a very strong, robust regulatory framework and still offer this ease of doing business,” he said. “We've been very clear on looking at how to create that strong regulatory framework, we have to do that, particularly in new asset classes.”

MBS Global expects work on the project to start by the end of this year or early next year, with the first hotels and residences scheduled to be commissioned and delivered by the fourth quarter of 2027 or the first quarter of 2028.

While the land and infrastructure support is being provided by the government, the company is working with a large consortium of investors to fund the project, Mr Hussain said.

On safe waters

The islands of the Maldives, spread over 90,000 square kilometres, face severe risks due to climate change. The World Bank has warned of significant threats to the country's natural capital and cautioned that the impact on coral reefs and fisheries, already visible, will worsen sharply by the middle of the century under both high and moderate emission scenarios.

“This degradation could have devastating effects on the Maldives' economy and environment,” it said in a September report, which assessed the impacts of sea-level rise and projected an increase of up to 90cm by 2100.

“Without effective adaptation strategies, coastal flooding could severely damage up to 3.3 per cent of the Maldives' total assets by 2050 during typical 10-year floods, resulting in damages of $0.7–1.1 billion of GDP.”

However, strategic investments in adaptation could cut almost in half of the projected GDP impact, it added.

A coral reef in the Maldives. The World Bank has warned that the impact of climate change on coral reefs and fisheries will worsen sharply by the middle of the century. AP

Mr Hussain said the MIFC, being designed by architect Gianni Ranaulo, is focused on sustainability and that it will use 3D printing with organic and recyclable materials.

Once ready, the plan is also not to use fossil fuels and instead rely on smart transport within the development.

“The Maldives is a beautiful place, it's fragile,” he said. “We built a very resilient design through the architects and developers, we're mindful of what's happening in terms of the Maldives and sea levels and so, we've built in a very conscious way around that.”

The project aims to employ about 16,000 people, with a push towards creating local jobs.

“I think people realise that we're not here just to throw up some large buildings and sell some real estate,” Mr Hussain said. “That's not our intention. This is part of a very long thought-through process with the government about how we help them achieve their vision in terms of digitalisation and increasing the diversified revenue channels for them.”

There has already been a lot of interest from companies, he added, although he did not disclose any names.

“It's such a beautiful place. It's not a hard job convincing someone to come and work in the Maldives. But to do that, they have to have that confidence that the infrastructure is there to genuinely support their business,” Mr Hussain said.