Employer of Record in Maldives

An Employer of Record, or EOR, is a company that legally hires employees on your behalf in the Maldives. This lets you build a team there without setting up your own local company. The EOR handles all the HR tasks like payroll, taxes, benefits, and making sure you follow local labor laws. You manage your team's daily work, and the EOR takes care of the legal and administrative parts of employment. For companies looking to hire in the Maldives, an EOR like Rivermate can simplify the process.

How an Employer of Record (EOR) Works in Maldives

Using an EOR in the Maldives is a straightforward process. Here’s how it typically works:

1. You Find the Talent: You identify the candidate you want to hire in the Maldives.
2. The EOR Hires Them: The EOR legally hires the employee on your behalf through a compliant local employment contract.
3. Onboarding: The EOR manages the entire onboarding process, including any necessary paperwork.
4. You Manage Your Employee: You direct your employee's day-to-day tasks and responsibilities, just like any other team member.
5. The EOR Handles HR: The EOR takes care of payroll, taxes, benefits, and ensures compliance with all Maldivian employment laws. This includes making the required 7% pension contribution to the Maldives Retirement Pension Scheme (MRPS).

Why use an Employer of Record in Maldives

Using an EOR in the Maldives saves you time and reduces risk, especially when you're expanding into a new market. It allows you to focus on your main business goals while the EOR handles the complexities of local employment.

Here are some key benefits:

• Hire Without a Local Entity: You can build a team in the Maldives without the time and expense of setting up a legal entity there.
• Stay Compliant: EORs are experts in local labor laws, so you don't have to be. They ensure you meet all legal requirements for employment contracts, benefits, and taxes.
• Faster Onboarding: An EOR can get your new employees onboarded and working much faster than if you were to handle the process yourself.
• Manage Visas and Work Permits: If you're hiring expatriates, an EOR can sponsor and manage the necessary work permits and visas, navigating the local quota system for foreign workers.
• Competitive Benefits: An EOR can help you offer a competitive benefits package that complies with local standards and expectations.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Maldives includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Maldives.

Hiring in the Maldives means navigating a unique labor market. The nation's economy thrives on tourism, which creates many jobs. You will find a mix of local and international talent. The Employment Act of 2008 is the main law that shapes how you hire and manage your team here. It sets the rules for everything from contracts to working hours.

Employment contracts & must-have clauses

You must provide a written employment contract to every employee. This is not just good practice. It is the law. The contract should be in Dhivehi, the local language, and clearly state all terms in Maldivian Rufiyaa.

Your contracts need to include several key details to be compliant.

• Your company and the employee's details: Full names and addresses.
• Job specifics: The job title, responsibilities, and the date employment begins.
• Type of employment: State if it is a permanent or fixed-term position.
• Pay details: Clearly list the salary, any allowances, and the payment schedule.
• Work schedule: Define the expected working hours.
• Leave entitlement: Specify annual, sick, and other types of leave.
• Termination conditions: Outline the notice periods and conditions for ending the employment.

Probation periods

You can include a probation period in your employment contract. This period allows you and the new hire to see if the fit is right. The maximum length for a probation period is three months. During this time, either you or the employee can end the contract without giving advance notice.

Working hours & overtime

The standard workweek in the Maldives is 48 hours, spread over six days. This typically means an eight-hour workday. Employees must receive at least one 24-hour rest period each week.

When an employee works more than the standard 48 hours, you must pay them overtime. The rates for overtime pay are specific.

Public & regional holidays

Your employees are entitled to paid public holidays. The dates for many of these holidays depend on the Islamic calendar and can change each year.

Here is a list of public holidays for 2025:

Note: Islamic holiday dates are subject to the sighting of the moon.

Hiring contractors in Maldives

You might consider hiring independent contractors for specific projects. This can offer flexibility and cost savings since you do not pay for employee benefits like paid leave or social security contributions.

However, you must be careful about how you classify workers. Misclassifying an employee as an independent contractor can lead to serious penalties. The key difference lies in the level of control. Employees work under your direct supervision, while contractors manage their own work to achieve an agreed-upon result.

An Employer of Record (EOR) can help you avoid this risk. An EOR legally employs workers on your behalf. This ensures that your team members are classified correctly and receive the right pay and benefits according to Maldivian law. Using an EOR simplifies hiring and keeps you compliant, letting you focus on managing your business.

Understanding compensation and payroll in the Maldives is straightforward. The system is built around a monthly cycle where you pay employees directly into their bank accounts. While salaries vary by industry, the tourism sector significantly influences compensation practices. A key part of this is the mandatory service charge, which is distributed among employees and can be a substantial addition to their base pay.

Payroll cycles & wage structure

The standard payroll cycle in the Maldives is monthly. You should provide your employees with a payslip that details their earnings and any deductions.

Your wage structure will typically include:

• A basic salary
• Allowances and bonuses
• Service charge distribution, especially in the tourism industry

It is highly recommended to have a written employment agreement in the local Dhivehi language that clearly outlines all compensation details.

Overtime & minimums

The standard workweek is up to 48 hours. If your employees work beyond these hours, you are required to pay overtime. The overtime rate is typically 125% to 150% of their regular wage.

The Maldives has a government-mandated minimum wage to ensure a baseline for employee compensation.

Employer taxes and contributions

Your primary responsibility as an employer is to contribute to the Maldives Pension Scheme for your employees.

Employee taxes and deductions

Employees in the Maldives are subject to a progressive income tax and also contribute to the pension scheme. You are responsible for withholding these amounts from your employees' pay.

Here are the income tax brackets for employees:

In the Maldives, you'll find that employee leave and benefits are generous. This approach helps create a positive work environment where people feel valued. The law provides a strong foundation of mandatory benefits. Many employers also offer extra perks to attract and keep the best talent.

Statutory leave

You must provide several types of leave to your employees.

• Annual Leave: Employees get 30 days of paid annual leave after they complete one year of service.
• Sick Leave: You must offer 30 days of paid sick leave per year. You can ask for a medical certificate if an employee is sick for more than two consecutive days.
• Maternity Leave: Mothers receive 60 days of paid maternity leave.
• Paternity Leave: Fathers are entitled to 3 to 5 days of paid paternity leave.
• Family Responsibility Leave: Employees can take up to 10 days of paid leave to care for a sick relative.
• Circumcision Leave: You must provide 5 days of paid leave for the circumcision of an employee's child.
• Pilgrimage Leave: Employees can take paid leave for the Hajj pilgrimage once during their employment.

Public holidays & regional holidays

The Maldives has a number of public holidays. Here are the holidays for 2025.

Typical supplemental benefits

You will find a mix of statutory and non-statutory benefits in the Maldives.

How an EOR can help with setting up benefits

An Employer of Record (EOR) makes it easy to offer benefits to your team in the Maldives. An EOR already knows the local laws and market.

Here is how an EOR can help you:

• Compliance: An EOR ensures you comply with all Maldivian employment laws. This saves you time and reduces risk.
• Benefit Administration: An EOR handles the administration of all benefits. This includes everything from health insurance to pension contributions.
• Expertise: You get access to local experts who understand the benefits landscape. They can help you create a competitive benefits package.
• Onboarding: An EOR simplifies the onboarding process for new employees. This includes setting up their benefits from day one.

When offboarding an employee in the Maldives, you need to follow the rules in the Employment Act. This means giving the right amount of notice and, in many cases, providing severance pay. The process ensures a fair and respectful exit for your team members. It also protects your business from legal problems.

Notice periods

Giving proper notice is a key part of a compliant termination. In the Maldives, the notice period depends on how long the employee has worked for you.

You must give the notice in writing. It's also important to check the employment contract. If the contract states a longer notice period than the legal minimum, you must follow the contract. During the probation period, which can be up to three months, either you or the employee can end the contract without notice.

Severance pay

Recent changes to the law in the Maldives introduced severance packages for employees. This payment helps support them as they look for a new job. Severance is usually required when you terminate an employee without cause, for reasons like redundancy.

The amount of severance pay is also based on the employee's time with your company.

• Less than one year of service: One month's salary.
• One to four years of service: Two months' salary.
• More than four years of service: Three months' salary.

If an employee is terminated for serious misconduct, like theft or fraud, you are generally not required to pay severance.

How Rivermate handles compliant exits

We make sure every termination follows the letter of the law. Our process is clear and consistent, so you don't have to worry about compliance.

Here’s how we manage it:

• Clear documentation: We start by providing a written notice of termination. This letter clearly states the reason for the termination and the effective date.
• Fair hearings: If the termination is for cause, we ensure the employee has a chance to be heard. This is a crucial step in a fair process.
• Accurate final payments: We calculate all final payments, including any unused vacation time and severance pay. We make sure your former employee receives everything they are entitled to.
• Compliance checks: Our team stays up to date on Maldivian employment law. We make sure every step of the offboarding process is fully compliant.

By handling these details, we help you manage employee exits smoothly and respectfully. This protects your business and maintains a positive reputation.

Getting the right visas and work permits in the Maldives is essential for you and your team. The process involves a few key steps and understanding the different visa types is crucial. For anyone looking to work in the Maldives, a prospective employer must secure a work permit before you can apply for a work visa. This means you need a job offer first. The work visa allows you to live and work in the country for a specific period, usually tied to your employment contract.

Employment visas & sponsorship realities

An Employer of Record (EOR) can sponsor work permits for your employees in the Maldives. This is a practical way to hire talent in the country without setting up your own local entity. The EOR handles the necessary legal and administrative tasks to ensure your team can work compliantly.

Here is what you can typically expect an EOR to handle:

• Guidance on local employment laws.
• Securing work permits and visas for expatriate staff.
• Managing payroll and benefits administration.
• Ensuring compliance with Maldivian labor regulations.

One important reality to keep in mind is the quota system for foreign workers in the Maldives. The government limits the number of foreign employees a company can hire. An EOR's ability to sponsor your employees may be affected by these quotas.

The general process for obtaining a work visa involves these steps:

1. Employment Approval: The employer applies for an Employment Approval on your behalf.
2. Work Permit: Once approved, the employer secures a work permit.
3. Work Visa Application: With a valid work permit, you can then apply for a work visa.

Business travel compliance

For short-term business trips, a work visa is not the right option. Instead, you will need to look at business visas or other short-stay options.

Business Visa A business visa is for activities like attending meetings, conferences, or negotiating contracts. It does not permit you to carry out paid employment. This visa is typically granted for a period of 30 to 90 days.

Meeting Visa The Maldives also offers a "Meeting Visa" for those attending a conference, meeting, or convention. This is a 14-day, non-extendable visa granted upon arrival, provided you meet the entry requirements.

For any business travel, it is important to have the right documentation. This may include:

• A valid passport.
• Proof of accommodation and return travel.
• A letter from your company explaining the purpose of your visit.
• Traveller Declaration submitted through the IMUGA portal.