The network of thousands of coral islands in the Indian Ocean, which has signaled it wants to be an offshore financial centre, has passed a law which for the first time allows foreigners to own a slice of land.

Foreign billionaires and institutions could own a slice of paradise in the Maldives, an Indian Ocean jurisdiction with plans to establish an offshore financial centre but which has been also hit by political turmoil.

Last week the president of the Maldives, Abdulla Yameen, approved a law passed in parliament that allowed foreigners to own land for the first time; they will be allowed to own property so long as they invest more than $1 billion and provided that 70 per cent of it is reclaimed from the Indian Ocean, according to a report on the terms by the BBC.

There are fears that China, for example, will set up foreign bases, prompting concerns from India, among others, reports said. 

In a statement on the official Maldives government website,Yameen said he “has assured that even though a foreign party owned a part of the territory of the Maldives, the land area and all property and activity inclusive of the land will come under the sovereign authority of the Maldives.

“The president said that the investments made at such freeholds will fall under the jurisdiction of the constitution and the rule of law of the Maldives, and that the government will not permit any investors to contradict these laws,” the statement continued. 

"We are not going to sell land to other countries, whether it's China or Saudi Arabia," he was quoted as saying by Minivan News last week.

The jurisdiction has experienced political turmoil. Its first democratically elected president, Mohamed Nasheed, was overthrown in a coup in February 2012. There have been clashes in the capital of Male since Nasheed was convicted this year on “terrorism” charges.

A report in The Hindu quoted vice president Ahmed Adeeb as saying: “Our sovereignty is not on offer. We don’t want to give any of our neighbours, including India, any cause for concern. We don’t want to be in a position when we become a threat to our neighbours.”

Adeeb was sworn in to his office last week.

In 2012, it was reported that figures in the Maldives government had discussed ways to establish the country, which is a network of thousands of coral islands and beloved by scuba divers and honeymooners, as an offshore financial centre.