Employer of Record in Maldives

Marzuna Employer of Record Maldives (EOR) solutions make expanding a business in the Maldives easy and hassle-free. Thanks to our cutting-edge HR platform, companies may hire exceptionally skilled individuals in the Maldives without having to set up a separate legal organization. It streamlines the recruiting and onboarding of remote workers by handling payroll processing, tax preparation, and other regulatory obligations.

Overview of Maldives

A collection of islands known as the Maldives may be found in the Indian Ocean. It’s a little-known truth about this island nation that it was created on top of long-dead volcanic ranges. The majority of people follow Islam, which is the official religion. It typically has tropical weather and windswept beaches.

• Population: 5.31 Lakhs
• Currency: Rufiyaa (RF)
• Capital city: Male
• Languages Spoken: Dhivehi (Maldivian)
• GDP: 7% at 564.22 crores USD (2019)

Employment Landscape in Maldives

To conduct business in the Maldives, one must possess a comprehensive understanding of employment laws and the intricate rules that accompany them. Learning about the customs and culture of the Maldives is also essential. The challenge with this endeavor is that it often calls for extensive research, which can be costly and time-consuming.

The challenge facing any corporate organization is finding the right employees. Fortunately, the Maldives’ Employer of Record (EOR) services help streamline your employment processes. Our organization specializes in providing EOR solutions in the Maldives, handling all of your business’s employment needs while closely adhering to Maldivian laws. This provides you with a great deal of time and room to focus on other important areas of your business.

Contractors vs. Full-Time Employees

In the Maldives, employment contracts come in two primary forms: definite terms and indeterminate terms.

Indeterminate term contracts have no fixed expiration date and remain in effect until either party terminates them. On the other hand, definite contracts have a predetermined duration, typically up to two years. At the end of the initial term, the contract may be renewed for another period or permanently terminated.

Contractors are often used to describe workers hired under explicit contractual agreements. They are typically highly skilled professionals in their respective fields. Contractors are responsible for managing their own time and handling tax payments. While they receive specific directions from their clients or project managers, they work with a considerable degree of autonomy. They may receive training but generally have less supervision compared to full-time employees. Hiring contractors is usually a cost-effective and flexible option compared to bringing on full-time staff.

Full-time employees, however, enjoy several advantages. They undergo regular training, are closely supervised by their employers, and play integral roles in the company’s day-to-day operations. Their employment requires ongoing monitoring and supervision because they are pivotal to many aspects of business operations.

When creating employment contracts, it is essential to precisely define the nature and scope of the work to be performed by either an employee or contractor. This clarity ensures that the roles and responsibilities of each party within the working relationship are well-understood.

Advantages of Hiring Contractors:

• Cost: While contractors may have higher hourly wages, they can be a more cost-effective long-term solution because they are not entitled to job benefits like bonuses and tax incentives.
• Flexibility: Contract workers can be hired on a temporary basis, allowing you to adjust their terms as needed. New contracts can be swiftly drawn up to address evolving requirements.
• Independence: Contractors often work independently and manage their own schedules, requiring less direct supervision, and offering flexibility in resource allocation.

Advantages of Hiring Full-Time Employees:

• Legal clarity: By hiring full-time employees, you can avoid any misclassifications and their associated consequences. Full-time employee contracts outline the terms and benefits, which are generally not subject to change unless mutually agreed upon.
• Loyalty and organizational commitment: Full-time employees are dedicated solely to your company, which can foster stronger commitment and motivation since their success is closely tied to your business’s success.
• Knowledge retention: Full-time employees acquire and maintain skills and expertise within the company, contributing to its overall growth and development.

Recruitment in the Maldives

A well-documented employment contract that aligns with local regulations is a crucial component of a successful recruitment process in the Maldives. This contract should be provided to the employee and include vital details such as the start date, termination clauses, and specifics about compensation. The contract should be drafted in the local language, Dhivehi, and a copy should be furnished to the employee, outlining any additional benefits and terms. All monetary values should be expressed in the local currency, the Rufiyaa. Our team of experts is available to assist you in identifying top candidates and streamlining your hiring procedures.

Compliance with the Maldives Employment Act is essential when conducting the hiring process. This act provides the necessary framework for businesses to operate effectively while also imposing regulations to ensure fair and ethical employment practices. The Act prohibits discrimination based on sex, age, or socioeconomic status, and it also sets age limits for employment to protect children. Additionally, it’s important to note that employment regulations in the Maldives can vary by sector. For example, the hotel industry mandates the employment of at least 50% Maldivian workers. You can find the latest job opportunities in the Maldives on various reputable job search websites, including Job The Maldives, Jobsicle, and Career The Maldives.

Probation & Termination

Probation

All conditions for probation and its duration while working for a firm in the Maldives were spelled forth in the Employment Act. A probationary period may not be prolonged and has a 3-month maximum duration. However, the Act has made it possible for either the employer or the employee to end the contract without giving a reason or giving notice. If a person doesn’t perform well after being promoted, they may be fired after a probationary period or given their old job back.

Termination

Once the aforementioned time limit has passed, either the Employer or the Employee may decide to discontinue the Employment contract. If an employee is found guilty of any misconduct, such as theft, harassment, etc., the employer has the right to fire them. Before two months have passed after the employee’s termination, the employer is required to provide them a notice of termination. There are several statutory perks that employees are entitled to.

EOR Solution in the Maldives

The process of company development into the very centre of the Maldives is made simpler and faster by the Employer of Record in the Maldives. Utilising an EOR such as this enables you to set up efficient administration of employee pay, contracts of agreement, tax information, and work licences. We can provide CEOs and company owners with the ideal pool of qualified applicants without making them perform the laborious job.

Details	Explanation
Taxes that apply to invoices	A maximum GST rate of 5% is applied on all products and services in the Maldives. Depending on the sector, different taxes are applied.
Minimum duration of service	There are no requirements governing the minimum length of an employment contract under the Maldives Employment Act. Generally, it is determined by the company enterprise..
Currency accepted	Rufiyaa (RF)
Required details and documents	Residents must provide important personal information, a copy of their passport, bank account information, and a passport-sized picture.

Outsourcing Employment Through an Employer of Record

When extending your company in The Maldives, it’s crucial to make a decision on the direction you want to go in. Of course, you have the option of building a team from the beginning, managing them, or delegating control of their pay and professional development to an EOR partner.

Types of Visas in the Maldives

Category	Explanation
Work Visa	Any person wishing to operate a company or engage in employment in the Maldives must get a work visa within 15 days of arrival. A certified employment letter is required for the employee.
Criteria to get a work Visa	Individuals seeking a working visa in the Maldives are required to submit specific documents for the application process. These documents include: An employment certificate issued by the employer. A valid passport along with verified copies. A completed Embarkation/Disembarkation Card, which must be verified by the Maldives Immigrants from Permits and Foreign Employment Division (PFED). A passport-sized photograph of the individual. Proof of payment for the work visa card, which amounts to 50 RF. A copy of the individual’s passport biodata page. These documents are necessary to initiate the working visa application process and comply with the requirements set by the Maldivian authorities. It is important for individuals to ensure they have all the required documents in order to proceed with their visa application smoothly.
Tourist Visa	Free tourist visas are available at the airport. It usually lasts for 30 days and requires no prior agreements from people, but no one is allowed to work.
Business Visa	A letter of purpose from the employer must include all the information. Typically, it is good for 90 days.

Work Permits

Topic	Explanation
Can Our company sponsor work permits in the Maldives?	Yes, We can do that.
Processing time	The processing time for a working visa is close to three business days.
Working visa permit process	Step 1: We will identify possible employees for your business and assist them in applying for a work visa permit and submitting all necessary paperwork. Step 2: The health certification procedure will then be applied to our chosen individuals. Step 3: In order for the Maldives Immigrants Institution to start processing the working visa permit, an employment contract must be created between the company and the employee. Step 4: The Working visa permission will be issued to the employee on the official website in 3 days by the Permits and Foreign Employment Division.
Passport submission	To the Maldivian immigrants, all staff would be required to present their passports and a photo.
Where is the application processed?	The Maldives government’s official website, Xpat Online, is where the working visa permit application is handled online.
Work permit criteria	The applicant must possess a number of papers and cannot have a criminal history.
When can the employee travel to The Maldives?	After receiving their online work permit visas, the employee can go for The Maldives.
What’s the cost of a business visa?	750 Rufiyaa
Termination of Working visa	As the project’s length and goals are completed, the working permit is terminated.

Payroll in the Maldives

To ensure effective wage administration and tax compliance for your employees in the Maldives, a deep understanding of payroll rules and regulations is essential. For multinational organizations, it’s critical to grasp the local laws that govern income taxes, company taxes, security taxes, and other relevant aspects. You have two options for managing this effectively:

• In-House Team: You can establish an internal team dedicated to managing payroll and tax-related matters. This team would be responsible for ensuring full compliance with all relevant Maldivian regulations and laws.
• External Assistance: Alternatively, you can seek our assistance in the Maldives. With our experienced specialists, we can simplify payroll and employment administration for your organization, ensuring that you adhere to all national rules and regulations. We have an in-depth understanding of the Maldivian legal framework, allowing us to manage the complexities of payroll and tax management on your behalf.

By leveraging our expertise, you can automate your payroll processes, ensure precise tax calculations and deductions, and significantly reduce the risk of noncompliance. This enables you to focus on other critical aspects of your business, secure in the knowledge that your payroll and tax matters are being efficiently handled in accordance with Maldivian law.

Taxes in the Maldives

Tax	Explanation
Income Tax Rates	Annual salary Tax Rate(%) 0 to 7,20,000 Rufiyaa 0% 7,20,000 to 12,00,000 Rufiyaa 5.5% 12,00,000 to 18,00,000 Rufiyaa 8% 18,00,000 to 24,00,000 Rufiyaa 12% More than 24,00,000 Rufiyaa 15%
Income Tax Returns	Yes
Financial Year-End Date	31st December
Corporate Tax	It generally is set to 15% for big businesses.
Withholding Tax (For Non-Residents)	10%
Sales Tax	All residents of the Maldives are required to pay a 15% sales tax on all goods and services.
Employers and Employees’ Social Security and Statutory Contributions	In the Maldives, the idea of social security is still relatively new. Even though they are not qualified, the Maldives government has made it necessary for both employers and workers to contribute 7% of their income to pension plans.

To set up a standalone business corporation in the Maldives, it’s crucial to have a solid grasp of the subsidiary laws and regulations that govern various aspects of your business. In the Maldives, you have two primary options for establishing a company:

• Private Limited Companies (PLC): This company type offers limited liability and is a favored choice among businesses in the Maldives.
• Limited Liability Companies (LLC): LLCs necessitate at least two directors and five sub-directors on the board of directors. Additionally, one director must be present in the Maldives to oversee operations.

The process of incorporating a company in the Maldives follows a few straightforward steps:

• Fill out the application form with all necessary documents and personal details.
• Once your application is processed, get in touch with the ministry responsible for company registrations.
• Make the required payments for company registration and the annual fees as indicated in the payment slip obtained.
• You’ll receive the registration certificate, a letter of instruction, and the articles and Memorandum of Association.
• The certificate will undergo verification and validation by the relevant administrative authorities in the Maldives.

If you’re ready to move forward and establish a subsidiary in the Maldives, our Employer of Record (EOR) services are ready to assist you throughout the comprehensive process. We offer valuable insights and support, streamlining the setup of your subsidiary in the Maldives, making the process more efficient and hassle-free.