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Employer of Record in the Maldives

Employer of Record in Maldives

Skuad’s Employer of Record Maldives (EOR) solutions make business expansion to the Maldives easy and hassle-free. Our unique HR platform allows companies to hire exceptionally talented employees in Maldives, without having to set up a separate legal entity. It streamlines the process of hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances.

The Maldives at a Glance

The Maldives is a group of islands situated in the Indian Ocean. One of the lesser-known facts about this island country is that it's formed upon ancient dead volcano ranges. Islam is the official religion practiced by the majority. It generally features a tropical climate and has windy beaches.

Population: 5.31 Lakhs

Currency: Rufiyaa (RF)

Capital city: Male

Languages Spoken: Dhivehi (Maldivian)

GDP: 7% at 564.22 crores USD (2019)

What You Must Know Before Employing in the Maldives

To successfully carry out business operations in the Maldives, you must have a complete understanding of the Employment laws and it's multi-faceted regulations. You'll also need to pierce through the Maldivian traditions and culture. This usually takes a lot of research work, which can be expensive and time-consuming, as it's a difficult task.

It can be a challenge to find the best employees for your business organization. Skuad's Employer of Record services in the Maldives can help you by simplifying your employment needs. Below are some details about laws and regulations revolving around employment in the country of the Maldives.

Privileges Explanations
Working Hours Every employee must work for at least 8 hours for 6 days every week. Generally, the leave is on Fridays. Overtime pay is generally paid at 125% of their original salary. However, the rate is increased to 150% if an employee has to work on a holiday.
Overtime Eligibility The Ministry of Finance in The Maldives has allotted overtime pay at 125% of the original salary. In the case of working on holidays, every employee is entitled to 150% of their original salary.
Compensation Laws in Madagascar The minimum salary in the Maldives is set to 3000 RF for the government organizations. There are no compensation laws in The Maldives for private enterprises. Hence there is no minimum salary for employees in private enterprises.
Maternity Leave The employment law in the Maldives guarantees 60 days of paid leaves to female employees. She can choose to take the leave 30 days before the delivery of the child. They can also claim additional paid leaves if required for medical complications. Female employees are also entitled to full payment during this period, and they can take one hour every day to look after the child until they are one year old.

Fathers get 3 days of paid family leave after the delivery of the child.

Medical Leave Every employee working in the Maldives is entitled to 30 days of paid leave each calendar year. The employee will have to produce a medical certificate from any recognized medical institution in The Maldives. They can also get 10 days of paid sick leaves in case someone from the family gets sick.
Annual Leaves The employment laws in the Maldives allow you 30 days of paid annual leave once you have worked for a year in that particular organization. If for some reason, leaves are not used, then they will be dissolved.
Health Benefits in Madagascar The Maldives feature a universal health care plan which provides free services to all Maldivian employees. The Maldives also features secondary and primary hospitals all over the country.
Employee Protection and Anti-Discrimination Rights The employment laws in The Maldives states that discrimination based on gender, age, or ethnicity is strictly restricted.
Data Protection Laws in Madagascar The government of the Maldives hasn't made any data protection laws in their constitution. However, right to privacy is facilitated to every employee and company working in the Maldives by Law no. 6 of the penal code. For some industries, other technicalities include data protection as a scheme.
Paid Public Holidays List
  1. New Year’s Day (1st January)
  2. Public Holiday (11th April)
  3. Ramadan holiday(12th April)
  4. Ramazan (13th April)
  5. Labour Day (1st May)
  6. Ascension Day (13th May)
  7. Eid ul Fitr (13th May)
  8. Hajj Day (19th July)
  9. Eid ul Adha (20th July)
  10. Independence Day (26th July)
  11. Islamic New year (10th August)
  12. Quamee Dhuvas (8th October)
  13. Victory Day (3rd November)
  14. Rabi Al Thani (7th November)
  15. Republic Day(11th November)

Skuad provides an EOR solution in The Maldives and will handle your organization’s employment needs while ensuring  that everything is 100% compliant with the Maldivian law, giving you some valuable free space and time to engross in.

Learn more about local employment laws and how you can outsource a payroll provider to manage your HR responsibilities.

Contractors vs. Full-Time Employees

In the country of the Maldives, Employment contracts are generally of two types:

  1. Indefinite terms
  2. Definite terms

Definite contracts last up to two years. The contract can either be extended, making the contract indefinite, or terminated.

Employees who work on definite contracts on their own are known as contractors. They're generally highly skilled in their field of work, and they pay their own taxes and are fully responsible for their time frame. On the other hand, full-time employees get several benefits and other perks, and they receive direct orders and instructions from their bosses. They also go through training, and they require regular surveillance, especially if they are from the accounting and promoting background, as they're a quintessential part of any company. On the other hand, contractors are more flexible, and they're much more economical compared to full-time employees. The nature and the purpose of the work must be dictated in the contract.

Advantages of Hiring Contractors:

  • Cost: Hiring contractors may be cheaper in the long run, although their individual rates are higher than those of full-time employees. This is because such employees are not entitled to employment benefits such as bonuses and tax compensations.
  • Flexibility: Since contractors are hired on a short-term basis, you are free to determine their work scope temporarily. If new needs arise, new contracts can be drafted in the short term.
  • Independence: Short-term contractors usually work independently and on their own timeline. They do not require close supervision, and your resources can be transferred elsewhere as needed.

Advantages of Hiring Full-Time Employees:

  • Legal freedom: Since full-time employees are defined as such in their contracts from the outset, misclassifications and the repercussions thereof can be avoided completely. When hiring full-time employees, you determine the terms of the contract and entitlements, and these are not liable to change unless mutually decided by both parties.
  • Loyalty and organizational commitment: Full-time employees are likely to be more loyal as they exclusively work for your company. As their individual success depends on your firm's performance, they are likely to invest more effort into their work. 
  • Knowledge: All employees undergo training when they join a firm. The skills and knowledge gained by a full-time employee, however, stay within the organization.

Book a demo with us to make the best decisions on whether to hire contractors or full-time employees in the Maldives

Hiring in the Maldives 

You will have to issue an employment contract to the employee to hire them successfully. The country of the Maldives imposes certain rules and regulations upon employment. It needs the contract to be written in the local language, Dhivehi, all the necessary details such as starting date, termination details, and reimbursements. A copy must be provided to the employee, and all the additional welfare details and timing details, etc., and all the money-related details must be filled in the national currency, Rufiyaa. Skuad's team of experts can assist you in this process of finding the best-suited candidates and recruiting them to your company.

The Employment Act in the Maldives is one of the essential considerations revolving around recruitment. It provides all the structure for a business organization to run properly. It also restricts minors from employment and prohibits discrimination based on sex, age, or class. The Maldives Employment laws also differ depending on the background industry; for example, the law has made it mandatory to recruit at least 50% Maldivians in the hotel industry. There are many well-recognized job-seeking platforms in the Maldives, such as -

  1. Job The Maldives — Find Jobs in the Maldives | Job Search | Job Vacancies (Job The Maldives)
  2. Jobsicle - Latest Jobs in the Maldives (Jobsicle)
  3. Career The Maldives - Fresh Jobs in the Maldives (career-The Maldives.com) (Career The Maldives)

To know more about the hiring procedure in the Maldives, Get in touch with Skuad.

Probation & Termination

Probation in the Maldives

The Employment Act laid out all terms for probation and its duration while working for a company in the Maldives. The maximum duration of a probation period can be up to 3 months, and it cannot be extended. However, the Act has enabled both employer and employee to terminate the contract without notice or practical or rational factors. An employee who fails to be productive after moving up in positions can be terminated after probation or restored to their original position. 

To ensure compliance with the Maldivian employment laws, contact Skuad.

Termination in the Maldives

Both the Employer and the Employee have the authority to terminate an Employment contract once the time period mentioned comes to an end. The employer can discharge an employee if they are found guilty of any wrongdoing such as thievery, harassment, etc. The employer is obligated to issue a notice of termination to the employee before two months of the termination. Employees are entitled to certain statutory benefits.

Take Skuad's help to explore the probation and termination laws in the Maldives.

EOR Solution in the Maldives

Skuad's Employer of Record in the Maldives simplifies and fastens the process of business expansion into the very heart of the Maldives. Working with an EOR such as Skuad helps you establish swift management of employee earnings, contracts of agreement, tax details, and work permits. Skuad can offer the perfect pool of suitable candidates for business owners and CEOs without them having to do the difficult work.

Taxes that apply to invoices Maximum goods and services in the Maldives are subjected to a GST percentage of 5%. The tax rate varies depending on the sector.
Minimum duration of service The Employment Act of the Maldives does not feature any rules dictating the minimum duration of an employment contract. It broadly depends on the business venture.
Currency accepted Rufiyaa (RF)
Required details and documents Important personal information, passport copy, bank-related details, and a passport size photo are required for residents.

Outsourcing Employment Through an Employer of Record

It is important to choose what path you want to take when expanding your business in The Maldives. You can, of course, choose to grow a team from scratch, manage them, or leave them to an EOR partner such as Skuad to regulate the employees' salaries and growth.
Book a demo here to expand your knowledge of Skuad's EOR services

Types of Visas in the Maldives

Category Explanation
Work Visa Any individual who seeks to conduct or work in any business in the Maldives will need a work visa from 15 days of arrival in The Maldives.

The employee must have a certified employment letter.

Criteria to get a work Visa Any individual who wants to obtain a working visa in The Maldives needs to submit the following documents:
  1. Employment certificate issued by the employer
  2. A valid passport with verified copies
  3. A finished Embarkation/Disembarkation Card verified by the Maldives Immigrants from Permits and Foreign Employment Division (PFED)
  4. A passport-sized photo of the individual
  5. Proof of payment for the work visa card of 50 RF
  6. Passport biodata copy of the individual
Tourist Visa Tourist visas are free and can be availed on arrival. Individuals require no pre-arrangements, it is generally valid for 30 days, but it does not allow anyone to work.
Business Visa The employer will have to provide a letter of purpose stating all the details. It's generally valid for 90 days.

Work Permits

Can Skuad sponsor work permits in Kazakhstan? Yes, Skuad can do that.
Processing time It takes almost 3 working days for a working visa to be completed.
Working visa permit process

Step 1: Skuad will find the potential workers for your company and have them apply for a work visa permit with all the required documents.

Step 2: Skuad's selected candidates will then go for the health certification process.

Step 3: The Employment contract must be formulated between the employer and the employee so that the working visa permit processing can begin by the Maldives Immigrants Institution.

Step 4: The Permits and Foreign Employment Division will issue the Working visa permit to the employee on the official website in 3 days.

Passport submission All employees will have to provide their passports and a picture to the Maldive immigrants.
Where is the application processed? The working visa permit is processed online at the official site of The Maldives administration at Xpat Online
Work permit criteria The employee will need certain documents and cannot have a criminal record in the past.
When can the employee travel to The Maldives? The employee can travel to The Maldives once their work permit visas have been issued online.
What’s the cost of a business visa? 750 Rufiyaa
Termination of Working visa The termination of working permit is conducted as the duration and purpose of the project come to an end.

Payroll in the Maldives

To regulate salary and oversee tax collection of your employees in the Maldives, you must clearly understand the Payroll rules and regulations. As an international organization, it is important to know and follow the country's laws like taxes on income, taxes on business, security taxes, and more. There are two ways of regulating this:

  1. You can establish and make your own team to manage salaries and taxes.
  2. You can take our help from Skuad in the Maldives, and we will make sure that everything is per the Bangladesh laws and make management of payroll and employment easier.

Taxes in the Maldives

Tax Explanation
Income Tax Rates
Annual salary Tax Rate(%)
  1. 0 to 7,20,000 Rufiyaa
  2. 7,20,000 to 12,00,000 Rufiyaa
  3. 12,00,000 to 18,00,000 Rufiyaa
  4. 18,00,000 to 24,00,000 Rufiyaa
  5. More than 24,00,000 Rufiyaa

0%

5.5%

8%

12%

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)
Earning per month Tax Rate(%)
Less than 60,000 Rufiyaa 0
60,000 to 1,00,000 Rufiyaa 5.5
1,00,000 to 1,50,000 Rufiyaa 8
1,50,000 to 2,00,000 Rufiyaa 12
More than 2,00,000 15
Sales Tax All consumers living in the Maldives have to pay a sales tax of 15% on all the products and services available.
Employers and Employees Social Security and Statutory Contributions The social security concept is not fundamental in the Maldives yet. However, the government of the Maldives has made it mandatory for both employers and employees to pay a 7% of their salaries to pension schemes even if they're not eligible for it.

Incorporation: How to Set Up a Subsidiary in the Maldives

Suppose you want to establish your business corporation without any parent organization in the Maldives. In that case, you'll need good knowledge about the subsidiary laws and regulations that will control your business factors. There are generally two types of company you can set up in the Maldives:

  1. Private limited companies (PLC)
  2. Limited liability companies(LLC); however, they require two directors and five sub-directors attached to the board of directors in this country. It also requires one director to stay in The Maldives and supervise.

The process of incorporation is quite simple:

  1. Complete the Application form with all the required documents and personal details.
  2. Contact the ministry once the application is processed.
  3. Make the payment for company registration and annual fee once the slip is obtained.
  4. The registration certificate, letter of instruction, articles, and Memorandum of Association will be delivered to you.
  5. The certificate will be further checked and verified by the administration in the Maldives.

If you're sure about taking the next step and opening a subsidiary in the Maldives, Skuad's EOR services can help you with the Extensive process providing you with valuable insights.
Learn more about Skuad's services for incorporating a company in The Maldives here.

Professional Employer Organization (PEO)

A Professional Employer Organization (PEO) service in the Maldives helps a company make the best possible pragmatic human resource decisions, making the company and the business stronger. They provide services ranging from payroll processing to managing reduction of liability and help with employee recruitment. What separates an EOR from a PEO is that the EOR is a legal employer, whereas PEO offers third-party service.

You must have an authorized presence in the Maldives, where your subsidiary is set up if you want a PEO's help. Although, you can still hire employees in those regions using EOR's help without establishing a presence. Skuad is always there for you to cut down your worries and to help you make the process of establishing a company in the Maldives easier!

Book a demo here to learn more about Skuad's EOR services

Conclusion

If your business is ready to benefit from profitable business opportunities in the Maldives' growing economy, collaborating with Skuad's EOR services in the Maldives can cater to all your expansion-related HR requirements.

Further, our tech-enriched, unified HR platform works with the help of our extensive network of experts from over 150 countries. We can ensure full compliance with the local laws in the country of your choice.
Want to know more about how Skuad can help your business? Get in touch with us today!

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