The Maldives has signed an $8.8 billion agreement with Dubai-based MBS Global Investments to develop a financial free zone in a bid to diversify its economy, the president’s office announced Monday.

The project, dubbed the Maldives International Financial Centre (MIFC), is planned for completion by 2030 and includes residential and office towers, hotels, and a convention centre.

The government claims the venture will help reposition Malé as a financial hub for the Indian Ocean, aiming to reduce the island nation’s dependence on tourism.

Under the agreement, the MIFC will offer no corporate tax, tax-free inheritance, and relaxed residency requirements. The government expects revenues to exceed $1 billion within five years of its operation.

The deal comes amid mounting economic pressures on the $6.5 billion economy, which has struggled with foreign exchange shortages since the pandemic. The International Monetary Fund recently called for stronger fiscal reforms and warned of potential debt risks, despite a projected 5% economic growth in 2025.

President Mohamed Muizzu’s administration has declined IMF bailout assistance and introduced austerity measures, including a 50% presidential pay cut and a 10% reduction across most public sector salaries.

Foreign debt stood at $3.37 billion in early 2024—nearly 45% of GDP—with China and India among the biggest lenders. Beijing has promised further support since Muizzu’s 2023 election, while India has also extended financial aid.

The Maldives, comprising 1,192 low-lying coral islands, remains highly vulnerable to climate change and rising sea levels.