Capital Investments By Non-Resident Investors In Sri Lanka

 Sources of Income:

  • Meaning of NON RESIDENT:

  • Capital transactions
  • Any person resident outside Sri Lanka, which includes country funds, regional funds, investment funds and mutual funds established outside Sri Lanka, may invest in capital transactions in Sri Lanka.

  • Permitted investments
  •  A company incorporated in Sri Lanka under the Companies Act No. 7 of 2007 May invest, acquire and hold all classes of shares or an entitlement to shares issued by those companies; AND

    Debt securities or granting of loans with tenure of 3 or more years (other than licensed commercial banks, licensed specialized banks, licensed finance companies, specialized leasing companies and companies limited by guarantee and overseas companies) in foreign exchange and Sri Lankan Rupees

    However granting loans and/or investing in debt securities issued in foreign currency or Sri Lankan Rupees, by licensed commercial banks, licensed specialized banks, licensed finance companies, specialized leasing companies may also be made subject to the approval of the relevant regulatory authorities

    Investments may also be made in the instruments stated below subject to legal restrictions:

  • Units in Unit Trusts or Mutual Funds
  • Government Securities (such treasury bills, treasury bonds and any other securities issued by the Government)
  • Securities issued by the Central Bank of Sri Lanka or any other statutory body
  • Sri Lanka Development Bonds (SLDB)
  • Deposits in licensed financial institutions
  • Immovable properties; or

The Minister may issue any other investment category approved by the Monetary Board in accordance with such directions as

 A company not incorporated in Sri Lanka and listed in the Colombo Stock Exchange

• Conditions

  • All investments shall be made through an Inward Investment Account opened and maintained in a licensed commercial bank (i.e. Authorized dealer) in any foreign currency designated by the Central Bank or in Sri Lankan Rupees

  • All income from such investments and proceeds of disposal, liquidation, maturity of the investments shall be credited to the Inward Investment Account through which the investment was made

  • All such income transferred from a person who is a non-national to a person who is a non-national by way of an inheritance or gift may be repatriated through an Inward Investment Account opened by the beneficiary, if the investment has been made via an Inward Investment Account opened by the beneficiary and/or if the investment has been made via an Inward Investment Account of the initial investor in compliance with the applicable law and/or by way of an inward remittance through a Securities Investment Account (re-designated as an Inward Investment Account) and/or any other account prior to the operation of the present applicable law

  • All such income of investments made prior to the effective date of this regulation may be repatriated through an Inward Investment Account opened by the investor subject to the submission of evidences of the inward remittance for the investment However, if evidence is not available for investments made prior to January 1st, 2010, such investments income may be repatriated through an Inward Investment Account opened by the non-resident investor upon satisfying with the bona fide of the underlying transaction by the licensed commercial bank as an authorized dealer


  • Type of Industry Limitation
    o Production of goods where Sri Lanka’s export is subject to internationally determined quota restrictions o Investments in these businesses shall be only up to 40% of the stated capital of such company

    (If special approval has been granted by the Board of Investment of Sri Lanka for a higher percentage of investment in any of these industries, only up to such permitted higher percentage)

    o Growing and primary processing of tea, rubber, coconut, cocoa, rice, sugar and spices
    o Mining and primary processing of non-renewable national resources
    o Timber based industries using local timber
    o Deep sea fishing (as defined by the Ministry assigned the subject of fisheries)
    o Mass communication
    o Education
    o Freight forwarding
    o Travel agencies
    o Shipping agencies
    o Investments in these industries shall only be up to the percentage Of the stated capital of the company, as approved by the Government of Sri Lanka or any other legal or administrative authority set up for the approval of foreign investments in such business o Air transportation
    o (b) Coastal shipping
    o Any industry manufacturing Arms, ammunitions, explosives, military vehicles and equipment, Aircraft and other military hardware
    o Any industry manufacturing poison, narcotics, alcohol, dangerous drugs and toxic, hazardous or carcinogenic materials
    o Any industry producing
    Currency, coins or security documents. o Large scale mechanized mining of gems
    o Lotteries


    The following categories of investment shall not be open to non-residents of Sri Lanka

  • Pawn broking
  • Coastal Fishing