Customs Considerations When Exporting to Maldives
Manufacturers looking to export their products abroad need to consider various factors when evaluating export markets. One of those factors is the customs clearance infrastructure and processes within a given country. This article presents an overview of the time and cost it takes for a local partner to clear imported products through customs in Maldives. This overview, along with a regional comparison, should help you better qualify Maldives as an export market for your products.
Maldives is located within the South Asia region. It has a population of roughly 0.4 million people as of 2018. 40% of the population lives in urban areas. The World Bank categorizes it as an upper middle income country with a GDP per capita (PPP) of USD$19200 per person.
The "World Bank's Doing Business project" publishes an evaluation of countries based on their efficiency of cross border trade. When assessing import efficiency within a country it primarily reviews four factors:
1. The time for border compliance (imports): Compliance time associated with the country's customs regulations, inspections and handling that takes place at its port or border. Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.
2. The cost of border compliance (imports): Compliance cost associated with the country's customs regulations, inspections and handling that takes place at its port or border. Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.
3. The time for document compliance (imports): The time for obtaining documents, preparing documents, processing documents, presenting documents and submitting documents. Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.
4. The cost of document compliance (imports): The cost for obtaining documents, preparing documents, processing documents, presenting documents and submitting documents. Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.
When evaluating border compliance time and cost amongst major regional economies, Maldives ranks 3rd regionally in terms of border compliance time and 5th regionally in terms of border compliance cost. A US$50,000 imported shipment of auto parts would take 100 hours to clear border customs and cost roughly US$981.
|Country||Border Compliance Time (Hours)||Border Compliance Cost (USD)|
When evaluating document compliance time and cost amongst major regional economies, Maldives ranks 3rd regionally in terms of document compliance time and 3rd regionally in terms of document compliance cost. A US$50,000 imported shipment of auto parts would take 61 hours in Maldives to have documents prepared & cleared and would cost roughly US$180.
|Country||Document Compliance Time (Hours)||Document Compliance Cost (USD)|
Detail for Border Compliance Time and Cost
Border compliance time and cost are calculated as a function of three driving factors: the time/cost related to working with customs authorities, the time/cost related to working with other agencies and finally border handling time/cost. The border compliance time for Maldives is primarily driven by border handling and border compliance cost is driven by border handling and working with other agencies.
|Detail Type||Time (Hours)||Cost (USD)|
|Working with Custom Authorities||48||$75|
|Working with Other Agencies||24||$425|
Detail of Document Compliance Time and Cost
Document compliance time and cost is a function of the various documents required by the country when importing goods. For Malé, the documents required when importing goods from abroad include Commercial invoice, Packing list, Bill of lading, Delivery order, Security check form, Import declaration, Import license and SOLAS certificate.
Another factor that influences import trade efficiency is transportation costs. For shipments bound to Malé, the port where goods would most likely land would be Male port. When calculating transportation cost for the US$50,000 auto parts shipment, the World Bank calculates that the shipment that would land at Male port would need to be transported 1 km with an average travel time of 3 hours. This brings the delivery transportation cost for the shipment to roughly US$161.
Greater use of technology within the customs clearance process helps improve efficiency and lower time and cost associated with customs clearance. Today many countries use digital systems to streamline the customs clearance process. Many of these customs systems are known as EDI or Electronic Data Interchange systems. More recently however, there has been a push to develop even more integrated customs clearance systems known as SW or single window systems. These systems provide greater integration within a given country and between multiple countries when managing customs clearance.
Maldives does have an EDI system known as ASYCUDA World. It has no SW system.