US Company Formation from the Maldives (2026): The Foreign Currency Act, Tourism Businesses, Income Tax Since 2020 and the US LLC vs C-Corp Choice

The Maldives earns most of its foreign currency from tourism, and almost all of it in US dollars. Yet Maldivians have spent years queueing for dollars at the official rate. Banks ration them, a parallel market charges a premium, and importers and families with children studying abroad struggle to pay overseas. In response, the government passed the Foreign Currency Act, in force since 1 January 2025, which requires tourism businesses and other large dollar earners to convert part of their US-dollar income into rufiyaa through local banks.

This is the first thing a Maldivian needs to understand before forming a US company. A US LLC with a US bank account can be a very useful tool for a guesthouse, a dive centre or a freelancer, but it cannot be used to keep tourism revenue outside the Maldivian banking system. This guide explains the currency rules, how Maldivian income tax treats a US company, the absence of a US treaty, and how US LLC formation compares with US C-Corp formation.

In short: Maldivians and Maldives residents can own 100% of a US LLC or C-Corporation, formed remotely. Under the Foreign Currency Act, tourism businesses must register with the Maldives Monetary Authority (MMA) and convert a set share of their dollar income through local banks; booking revenue routed through a US company is still revenue of the Maldivian business. Residents are taxed on worldwide income, with individual rates from 0% (up to MVR 720,000 a year) to 15% and corporate tax at 15% above MVR 500,000. Maldivian payers withhold 10% on many payments to non-residents. There is no US–Maldives treaty, so US corporate dividends carry 30% withholding. With UCB, a Wyoming LLC with EIN is $249 and a Delaware corporation with EIN is $358, all-in.

The Foreign Currency Act and tourism businesses

The Foreign Currency Act requires:

• tourism businesses, from resorts to guesthouses, liveaboards and dive centres, to register with the MMA and exchange a set share of their foreign currency income through Maldivian banks;
• non-tourism businesses with large annual foreign currency income (the threshold was later raised from US$15 million to US$25 million) to do the same;
• new tourism businesses to register within 30 days of starting operations.

The MMA has issued regulations on how the conversion works, and the required share has been raised for some categories. Reports in 2026 put it at 40% of monthly gross foreign currency sales for Category A establishments such as resorts. Check the current regulation for your category with your bank.

Why a US company does not change this

Some guesthouse and tour owners take bookings from foreign guests through online platforms and want those payments to go to a US bank account. That is possible, but:

• The revenue belongs to the Maldivian business that provides the stay, the dive or the excursion. A US LLC collecting the money is acting as its booking or payment agent.
• The Act applies to that revenue. Keeping it abroad to avoid conversion breaches the rules and risks penalties and the business's tourism licence.
• Tax follows the service. Tourism goods and services tax (T-GST, raised to 17% from July 2025), green tax and income tax are due on the Maldivian business's turnover and profits, whoever collected the payment.

The legitimate use is narrower: a US company can accept card payments and platform payouts that are hard to receive in the Maldives, then transfer the funds promptly to the Maldivian business's local account, where the conversion rules apply. Keep a clear record of each booking, payment and transfer.

How Maldivian income tax works

The Income Tax Act (Law 25/2019) introduced general income tax from 2020. Its main points:

• Residence: residents are taxed on worldwide income, non-residents only on Maldivian-source income. MIRA gives a credit for foreign tax paid on foreign-source income of residents.
• Individuals: 0% on annual taxable income up to MVR 720,000, then 5.5%, 8%, 12% and 15% on income above MVR 2.4 million.
• Companies: 15% on taxable income above MVR 500,000, with higher rates for banks.
• Non-resident withholding tax: 10% on many payments from Maldivian payers to non-residents, including royalties, rent and certain fees, and 5% on contractor payments.

For an owner of a US company:

• Work done in the Maldives is Maldivian income, whichever company invoices it.
• Dividends from a US corporation are foreign income, taxable in the Maldives with credit for US withholding.
• Fees paid by your Maldivian business to your US company may carry 10% Maldivian withholding.

No US–Maldives treaty

The Maldives has very few tax treaties, and none with the USA. US domestic withholding applies:

• 30% on dividends from a US corporation;
• 30% on royalties;
• 30% on related-party interest.

US LLC formation from the Maldives

US tax position

The IRS disregards a single-member LLC with a non-resident owner. If the owner works from the Maldives, and the LLC has no US office, employees or dependent agents, its income is generally not connected with a US trade or business and is not taxed in the USA (see effectively connected income explained). The LLC files Form 5472 with a pro forma Form 1120 every year, and the penalty for missing it is $25,000 (see Form 5472 explained).

Example: a freelance photographer and videographer

These are illustrative figures, not a client case, at MVR 15.42 to the dollar.

Ahmed is a photographer and drone videographer in Malé. His clients are resort groups, travel magazines and brands that shoot campaigns in the Maldives, and several are US or European agencies that prefer to pay a US vendor. He forms a Wyoming LLC, and it bills them US$45,000 a year.

• USA: the work is done in the Maldives, the LLC has no US office or staff, and there is no US tax. The LLC files Form 5472 and a pro forma 1120.
• Maldives: he is resident, and the income comes from work done in the Maldives. He declares it with MIRA. At about MVR 694,000 after expenses, his income falls within the 0% band.
• Currency: he is not a tourism business and is far below the non-tourism threshold, so the Act's conversion requirement does not apply to him. He brings money home when needed through his BML or MIB account.

Example: a guesthouse on a local island

A family runs a 12-room guesthouse on Maafushi. Platform payouts and card payments are slow to reach Maldivian banks. They form a US LLC that receives card payments from guests who book directly and transfers the funds weekly to the guesthouse company's account in Malé. The guesthouse company declares the full revenue, pays T-GST, green tax and income tax, and exchanges the required share under the Foreign Currency Act. The LLC holds no funds beyond the week's float and records each transfer. On those facts, the LLC is a payment tool, and the Maldivian business remains fully compliant.

US C-Corp formation from the Maldives

US tax position

A US corporation pays 21% federal tax on its profits plus state tax, and files Form 1120 and Form 5472 every year (see the 21% corporate tax explained and the C-Corp guide for non-residents). Dividends to the Maldives are withheld at 30%.

When it fits

• Tourism groups with a US sales office. A resort group with a sales team in New York or Los Angeles selling to US travel agents and wedding planners has US business income. A US corporation earns commissions from the resorts at arm's length and pays US tax on its own margin. Commissions paid from the Maldives to the US company may carry Maldivian withholding.
• Seafood and fisheries exporters selling tuna to US buyers, with a US importer of record.
• Start-ups raising investment, which need a Delaware C-Corporation (see raising US investment as a foreign founder).

See US subsidiary for a foreign company.

Which state

• Wyoming or New Mexico for a services or payments LLC run from the Maldives.
• Delaware for a corporation or start-up.
• The state where a sales team works, such as New York or California.

See best state for non-residents and the state selector.

What it costs

UCB's prices include state fees and the first year of registered agent service:

• Wyoming LLC with EIN: $249, or $348 with a US bank account application.
• Delaware corporation with EIN: $358.

A Wyoming LLC costs $121 a year to keep active, or $421 with the annual federal return. A US business address with your own suite number is $60 a year. See what a US LLC costs every year.

Banking and documents

Use your Maldivian passport. For proof of address, a STELCO or FENAKA electricity bill, a MWSC water bill, a Dhiraagu or Ooredoo bill, or a bank statement. Many Maldivian addresses are a house name and island rather than a street number. Write the address the same way on every document, exactly as on your bill.

US banks and fintechs accept Maldivian owners. What helps:

• a specific business description and website;
• your tourism licence and MMA registration, if you run a tourism business;
• invoices or booking records;
• a US business address with your own suite number.

See US business bank accounts for non-residents, Stripe for non-residents and why banks reject non-resident applications.

Mistakes to avoid

• Keeping tourism revenue in a US account to avoid the Foreign Currency Act.
• Not declaring revenue collected by a US company for T-GST, green tax and income tax.
• Paying dividends from a US corporation to the Maldives at 30% with no treaty.
• Inconsistent island addresses across documents.
• Missing Form 5472 in a year when no US tax was due.

Frequently asked questions

Can a Maldivian own 100% of a US company? Yes. No US visa, Social Security number or visit is required.

Can I keep my guesthouse's dollar income in a US account? No. A US company can collect payments, but the revenue belongs to the Maldivian business, and the Foreign Currency Act's conversion rules apply.

How does the Maldives tax income from my US company? Residents are taxed on worldwide income, at rates from 0% to 15% for individuals and 15% for companies, with credit for foreign tax.

Is there a US–Maldives tax treaty? No. US dividends, royalties and related-party interest paid to the Maldives are withheld at 30%.

Does my US LLC pay US tax? Not if it has no US office, staff or agents. It files Form 5472 and a pro forma 1120 every year.

How UCB can help

We form US companies for Maldivian owners remotely: the state filing, EIN, registered agent, US business address and bank application. Each year we file the federal return through our US tax filing service. Your Maldivian accountant handles MIRA filings, and we give them the US records they need. See our formation, EIN and bank account package and the Sri Lanka guide for a regional comparison.

Setting up a US company from the Maldives? WhatsApp us at +1 315 961 2956 or email enquiries@ucbsolutions.com.