In short
- Such 'golden' visa schemes are flagged by the FATF as vulnerable to money laundering and other illicit activities.
- The Maldives government claims the program will include multi-layered due diligence and international screening.
What happened
The Maldives is introducing the Pearl Residence program, a residency-by-investment scheme that lets foreigners obtain residency in exchange for a minimum investment, though the required amount has not been disclosed. The government says the program is still being developed and will include a robust due diligence framework with international screening and financial assessments.
The initiative is part of a broader strategy to attract foreign capital, including the creation of new islands through land reclamation. The FATF and local politicians have raised concerns about the potential for misuse by criminals seeking to launder money or evade law enforcement, emphasizing the need for strong oversight and regulatory safeguards.
These types of “golden” visa and passport schemes are notoriously vulnerable to misuse by those seeking to launder illicit proceeds, conceal assets, evade law enforcement, or facilitate further criminal activity, according to the global watchdog Financial Action Task Force.
In numbers
- 130 percent Maldives gross debt to GDP projection
- $1 billion estimated inflows from residency scheme
- 1,200 number of islands in the Maldives
What compliance teams should check
- Review the Pearl Residence program's due diligence framework for compliance with FATF recommendations.
- Assess the SEZ legal framework and its application to Project Ayla for AML/CFT controls.
- Monitor the legislative and regulatory developments related to the Maldives' residency-by-investment scheme.
Why it matters
Residency-by-investment programs like the Maldives Pearl Residence scheme are flagged by the FATF as high-risk for money laundering, asset concealment, and evasion of law enforcement. Compliance officers must closely scrutinize the program's due diligence, international screening, and regulatory frameworks to ensure robust AML/CFT controls are in place. The scale of anticipated foreign inflows and the creation of new jurisdictions through land reclamation further heighten the need for vigilant oversight and risk assessment.
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