New regulation mandates depositing salaries of expat workers to their bank accounts

The salaries of expatriate workers employed in the Maldives are now required to be deposited directly into their bank accounts.

The amendment to the Regulation on Employment of Expatriates in the Maldives published by the Home Ministry on Tuesday adds a new clause behind Article 58 of the regulation.

Under the new provision, salaries and other remuneration earned by expatriates working in the Maldives must be credited to a bank account held by the employee at a financial institution registered with or licensed by the Maldives Monetary Authority (MMA).

The amended regulation will take effect 30 days from Tuesday.

Similar provisions requiring employers to deposit expatriate salaries into bank accounts have previously been introduced with fines between MVR 10,000 and MVR 50,000 for employees who failed to comply. While these penalties were established through a 2016 amendment to the Employment Act, enforcement of the fines was suspended on December 28, 2017.

The reintroduction of the mandatory bank deposit requirement follows large-scale government efforts to regularize a large number of expatriate workers. On May 9, Home Minister Ali Ihusaan stated that information on 98 percent of expatriates had been collected as of that date.

The requirement for expatriate salaries to be deposited into bank accounts was originally introduced to facilitate the collection of Remittance Tax. Expatriate workers are required to pay a three percent tax on funds remitted abroad.

The development comes as a significant number of expatriates remain employed in the Maldives, with a considerable portion residing in the country without proper documentation. The government is currently carrying out extensive efforts to address undocumented expatriate employment and regularize their status.