Employer of Record in Maldives

Business growth to the Maldives is simple and hassle-free with Employer of Record Maldives (EOR) solutions. Without the need to establish a separate legal organisation, businesses may employ extraordinarily qualified workers in the Maldives thanks to our innovative HR platform. By taking care of payroll management, tax preparation, and other legal requirements, it accelerates the process of hiring and onboarding a remote crew.

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

It is essential to have a thorough awareness of employment laws and the complex regulations that go with them in order to undertake commercial operations in the Maldives. Additionally, it’s important to get knowledge of Maldivian customs and culture. The difficulty with this endeavour is that it frequently necessitates substantial study, which may be expensive and time-consuming.

A difficult issue for every corporate organisation is finding the suitable workers. Thankfully, Employer of Record (EOR) services in the Maldives can make your hiring procedures simpler. Our business specialises in offering EOR solutions in the Maldives, taking care of all your company’s employment requirements while strictly upholding Maldivian legislation. This gives you significant time and space to concentrate on other crucial facets of your company.

Contractors vs. Full-Time Employees

Employment contracts in the Maldives mainly come in two flavours: definite terms and indeterminate terms.

Contracts with an indefinite term have no set expiration date and are in effect until they are terminated by either side. Definite contracts, on the other hand, have a set timeframe of up to two years. The contract may be renewed for an additional term or made permanently null and void at the conclusion of the initial one.

Contractors are frequently used to describe workers employed under clear contracts. They are often very accomplished experts in their specialties. Contractors are in charge of handling their own time management and tax payments. They are given direct commands and instructions from their customers or project managers while working autonomously. Even while they might receive training, they often receive less supervision than full-time workers do. In general, hiring contractors is less expensive and offers more flexibility than recruiting full-time staff.

Those who work full-time, however, are entitled to a number of advantages. They are regularly trained, closely supervised by their employers, and essential to the company’s accounting and marketing operations. The nature of their employment necessitates constant monitoring and supervision for full-time personnel. They play a crucial role in many aspects of business operations.

It is crucial to precisely define the nature and purpose of the work that will be done by the employee or contractor when creating employment contracts. The obligations and responsibilities of each party within the work relationship are clearly understood as a result.

Advantages of Hiring Contractors

• Cost: Although their hourly wages are greater than those of full-time workers, hiring contractors may end up being less expensive in the long term. This is so that they are not eligible for job advantages like bonuses and tax breaks.
• Flexibility: Since contractors are recruited on a temporary basis, you are allowed to choose the temporary parameters of their employment. New contracts may be quickly drafted if new requirements emerge.
• Independence: Temporary workers typically work alone and according to their own schedules. They don’t need constant supervision, and you may move your resources as required.

Advantages of Hiring Full-Time Employees:

• Legal freedom: Misclassifications and the consequences that result from them may be totally avoided since full-time employees are stated as such in their contracts from the start. When recruiting full-time staff, you choose the contract terms and benefits, and these are not subject to modification unless both sides agree to it.
• Loyalty and organisational commitment: Since full-time workers only work for your business, they are probably more devoted to it. They will probably put more effort into their job since their success depends on the success of your company. 
• Knowledge: Upon hiring, every employee goes through training. However, a full-time employee’s abilities and expertise are retained by the company.

Recruitment in the Maldives

A documented employment contract that complies with local laws must be given to the employee in order to guarantee a successful recruiting procedure in the Maldives. Essential information including the start date, termination clauses, and remuneration specifics should be included in the contract, which should be written in the local dialect of Dhivehi. The employee shall get a copy of the contract, which copy shall set forth all extra welfare and timing provisions. The native currency, the Rufiyaa, should be used for expressing monetary values. Our team of professionals can help you identify the best candidates and streamline the hiring process for your business.

When it comes to hiring, the Maldives Employment Act must be taken into account. It offers the structure required for firms to run efficiently. The Act forbids discrimination based on sex, age, or socioeconomic status as well as the hiring of children. Additionally, the Maldives’ employment rules differ according to the sector. For instance, it is required to recruit at least 50% Maldivians in the hotel business. You may locate the most recent employment opportunities in the Maldives on a number of reliable job-searching 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

Understanding the payroll rules and regulations is crucial for ensuring effective wage administration and tax compliance for your employees in the Maldives. It is essential for a multinational organisation to understand the local laws governing income taxes, company taxes, security taxes, and other relevant issues. There are two ways to control this effectively:

• Creating an internal team: You may put together a team that is solely responsible for managing taxes and salaries. To ensure adherence to all pertinent Maldivian rules and regulations, this staff would be in charge.
• Getting outside help: As an alternative, you might ask for our aid in the Maldives. Payroll and employment administration will be made simpler for you because of our qualified specialists’ assurance that your company complies with all national rules and regulations. We are able to manage the difficulties of managing payroll and taxes on your behalf since we have extensive understanding of the Maldivian legal system.

With our help, you may automate your payroll procedures, guarantee precise tax computations and deductions, and reduce the chance of noncompliance. This gives you the freedom to concentrate on other important areas of your company while knowing that your payroll and tax issues are being taken care of effectively and in compliance with Maldivian legislation.

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.

If you intend to establish a standalone business corporation in the Maldives, it is important to have a good understanding of the subsidiary laws and regulations that govern various aspects of your business. In the Maldives, you have two primary options for setting up a company:

• Private Limited Companies (PLC): This type of company allows for limited liability and is a popular choice for businesses in the Maldives.
• Limited Liability Companies (LLC): LLCs require a minimum of two directors and five sub-directors to be attached to the board of directors. Additionally, one director is required to be present in the Maldives to oversee operations.

The process of incorporating a company in the Maldives is relatively straightforward:

• Complete the application form with all the necessary documents and personal details.
• Once the application is processed, contact the ministry responsible for company registrations.
• Make the payment for company registration and the annual fee as specified in the payment slip obtained.
• You will receive the registration certificate, 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 are ready to take the next step and establish a subsidiary in the Maldives, our Employer of Record (EOR) services can assist you throughout the extensive process. Our services provide valuable insights and support, making the process of setting up your subsidiary in the Maldives more efficient and streamlined.