Over a decade ago, in August 2014 on a late Wednesday night, the 18th People's Majlis passed the controversial Special Economic Zones (SEZ) Act with 60 votes in favour. The ruling party PPM celebrated with fireworks. The opposition MDP protested the bill and proposed over 300 amendments; of which none were passed. This bill was the then tourism minister Ahmed Adeeb’s brainchild - his legacy. The leaked #AdeebFiles revealed colleagues referring to the ex-minister as the “generous SEZ king al-Azeez,” as they begged for handouts.

Surprisingly, the SEZ Act remained dormant from its inception for more than a decade until July 2025 when the current President Muizzu declared the first ever SEZ in Maldivian history - Project Solar City. Then in November 2025, the 20th People’s Majlis passed an amendment to the SEZ Act to include a chapter called “sustainable townships”. Opposition party MPs voted no and made the obligatory floor speeches, and former MDP chairperson Fayyaz Ismail tweeted against it publicly. However, I would describe this ‘resistance’ as a toothless formality. The following month, a presidential decree designated Project Ayla, as the first ever SEZ township. 

The SEZ Act is finally waking up from its decade-long slumber.

Overview of the SEZ Act

The Special Economic Zones Act is a law that allows the President and a President-appointed board to carve out defined geographical areas of the Republic of Maldives and place them under a special legal, fiscal and administrative regime. 

Under the Act, an SEZ is a demarcated area under the management of a single developer, entitled to special incentives, and treated as a special customs area separate from the Maldives Customs territory for import and export duty purposes. Any developer that wants to establish a zone has to submit an application to the board. If approved, the developer receives a permit, signs an investment agreement with the state, and manages the zone through a Zone Administration Office. Investors then enter the zone through agreements with the developer and obtain an investment license granted by the board. The Act does not expressly require the investor to declare its full corporate structure, ultimate beneficial owners or source of funds to obtain an investment license.

Developers and investors can receive exemptions from import duty; business profit tax; GST; withholding tax; tax on shareholder dividends; bank profit tax for qualifying financial-services businesses; land rent under the Tourism Act; as well as tax relief, tax credits, relaxed expat recruitment rules, freedom to control inward and outward remittances without separate authority approval, single-window clearance for permits and approvals and any additional incentives granted by the President. 

The President is also given the power to shield SEZ developers and investors from future tax laws passed by the People’s Majlis. If the Majlis creates a new tax or raises an existing one, the Act lets the President exempt the SEZ if that tax threatens its incentives. 

Gianadda and Giraavaru

In December 2022, the Solih government was looking for financing to reclaim the Giraavaru lagoon in the capital atoll and create over 2,000 residential plots for Male’ natives under its Binveriya housing scheme. After amending cross-subsidy regulations to bypass competitive tender, a deal was struck with Swiss businessman Yanik Robert Louis Gianadda. The government granted him a 99-year lease over Noonu Atoll's Dhigufaru lagoon and Dhekenanfaru island for USD 27 million in exchange for financing the reclamation project.

Gianadda's early plans for the lagoon envisioned reclaiming eleven islands and 24 sandbanks across 122 hectares of the 751-hectare lagoon to build 262 ultra-luxury rooms. The deal drew immediate opposition from Noonu Atoll Council President Basheer when it was announced. "Without the say of Noonu atoll residents, they can't sell assets in the atoll. This is being carried out illegally. We'll stop it," he said. 

The project was named “Project Ayla” and construction began in September 2023, as per the initial EIA report. The leaseholder rights to the lagoon were held by Crystal Holdings Pvt Ltd, a company with shares owned by Gianadda and Pierre Jean Claude Antoine.

Project Ayla (part 1)

After President Muizzu took office in November 2023, Crystal Holdings started undergoing major changes: Talha Abdulkader al-Hashimi, a UAE national and founder of BluRock, joined the board of directors. His company BluRock became a shareholder alongside Gianadda’s Swiss LLC. Managing Director Hassan Zahir was replaced by former BluRock employee Abdul Rahim Vattiyapuri, as per EIA documents. Pierre Jean Claude Antoine is no longer visible on the company page on the public registry. Talha’s brother Mustafa al-Hashimi is also the CEO of Wasl Hospitality, a company the Dubai government holds 100% of shares in. 

A few months after the Emirati takeover of Crystal Holdings, an amendment to the SEZ Act tailor-made for Project Ayla was rubber-stamped through the PNC-supermajority parliament. This amendment created a legal category that had never existed in the original SEZ Act: sustainable townships. The bill passed on November 5 2025, which coincidentally was the same day Henley and the Maldivian government announced the Maldivian golden visa programme. The presidential decree granting Project Ayla its SEZ designation was signed the following month in Singapore.

In January 2026, President Muizzu officiated a groundbreaking ceremony for Project Ayla, where the development was publicly presented by Crystal Holdings and BluRock. The CEO of Project Ayla, Petar Krstic, is a BluRock employee as well. Everything ties back to Talha’s Emirati company. Swiss businessman Gianadda who originally acquired the lease is nowhere to be seen. At the event, Krstic announced that they are making the single largest private investment in Maldivian history - US$ 790 million. Efforts to find any past projects of this scale by BluRock were unsuccessful.

Project Ayla (part 2) 

The project is designed for ultra-high-net-worth individuals (UHNWIs) as a residence-linked luxury real estate product. Supercharged by the SEZ Act, what Ayla offers is entirely different to that of a traditional luxury resort; it is not simply selling villas in a lagoon. It is selling access to long-term residence, access to a preferential tax environment, access to a private city, and potentially access to the offshore-finance machinery sleeping within the SEZ framework.

This is the part of the SEZ Act that never came up in opposition MP Shamheed's remarks on the amendment during the parliamentary debate. The law does not only allow resorts, industrial zones, free ports and technology parks. It also allows offshore financial services inside an SEZ. 

The MMA’s offshore banking regulation allows SEZ offshore banks to operate in currencies other than Maldivian Rufiyaa and to ordinarily serve non-residents. These banks may receive deposits, extend credit, conduct foreign currency transactions, deal in securities, provide safe deposit box services, offer portfolio management, act as financial advisers, and provide trust services. A parallel banking system only benefitting the UHNWIs inside the Ayla SEZ.

The trust-service power is especially important considering investors don’t need to declare their corporate structure or source of funds. A trust is a structure where one party holds assets for the benefit of another. In an SEZ context, that means a licensed offshore bank approved to provide trust services could help foreign investors hold assets through trust structures rather than directly in their own name. The Asia Pacific Group’s formal recommendation to the government in early 2025 stated that the Maldives “should conduct a targeted risk assessment of the potential money laundering and terrorist financing risks associated with the SEZ, including the types of legal persons that may be permitted to operate within it,” and that “mitigation measures” should be implemented “in a timely manner, in line with the operationalisation of the zone.” Yet, to date, the government has not publicly shown that it has carried out that risk assessment or put in place the safeguards APG said should accompany the zone’s launch.

The non-bank financial services layer takes it further. Under the 2016 regulation, an SEZ can also host offshore non-bank financial businesses, including insurance companies, finance leasing firms, remittance businesses and money-changing operations. An insurance company within Ayla, with capital of MVR 10m, could write property insurance on every villa in the development. Instead of premiums flowing to an external insurer, they accumulate within the SEZ, taxed at the preferential SEZ rates of five percent for the first decade and ten percent for the second, rather than at standard rates. The same logic applies to a potential financial leasing company. Yachts, aircraft, and equipment could be leased through a SEZ-licensed entity, with lease income staying within the SEZ.

The Maldivian domestic banking system would not stand to benefit from the potential millions of dollars flowing through the SEZ. The Ayla SEZ will become a ring-fenced tax haven for UHNWIs.

This is why calling Ayla just a “luxury development” is insufficient. The moment it became an SEZ, the project became entirely something else. At this point, they are selling jurisdiction. The Ayla SEZ population with their billions of dollars will use the SEZ Act to its full extent. One can only imagine their lobbying power in the People’s Majlis.

Gebel, Kälin, and Honduras

Ayla sits uncomfortably close to a much larger global movement: the movement to create privately governed cities. One of the leading voices of that movement is Titus Gebel, author of Free Private Cities: Making Governments Compete For You, who sits on the advisory board of the Andan Foundation, founded by Henley chairman Christian Kälin. The same advisory board, incidentally, includes former Maldivian president Mohamed Nasheed.

Christian Kälin has written approvingly about private cities, arguing that they can be better, cheaper and freer than existing state models. Asked by Israeli journalist Ronit Domke about the Henley-Maldives golden visa programme currently in development, Kälin said: “We expect wealthy people from around the world to buy additional homes in the Maldives, and we hope many Israelis will do so”.

Gebel’s private city model is simple: 1) a private company enters into an agreement with a host government, 2) takes responsibility for governing a defined territory, 3) residents live there under a contractual arrangement rather than democratic politics. In his vision, governance becomes something like a paid service. His ideal resident is a customer with an investment contract. Doesn’t it all sound a bit too familiar? 

A version of this experiment was attempted in Honduras through ZEDEs (their version of SEZs): Próspera, a private-city project for the ultra-rich on the island of Roatán. Gebel has extensively discussed the Honduran ZEDE model and Próspera, through the Free Cities Foundation. The Honduran public and the government pushed back against ZEDEs in 2022. The ZEDE law was repealed, and the Honduras’ Supreme Court later declared self-governing ZEDEs unconstitutional. In retaliation, Próspera’s investors brought an international arbitration claim of around US$ 10.8 billion against Honduras - almost ⅔ of the national budget.

The Maldivian SEZ Act gives the state very narrow grounds to revoke an SEZ permit. Once a developer receives a permit and signs an investment agreement, the project becomes legally difficult to unwind. If a future government changes the law in a way that damages the interests promised to those investors, Maldives could face the same kind of arbitration nightmare Honduras now faces after trying to reverse its private city experiment. 

The SEZ permit for the Ayla township was granted with little to no pushback from the opposition, media, and the general public. Funds are currently being raised for another township in Laamu atoll. If this model continues, Maldives will soon consist of states within the state governed by foreign corporations.