Sri Lanka has long been seen as a gateway to South Asia, with its strategic location, growing infrastructure, and a government eager to attract foreign investment. But before investing, it is essential to understand the legal framework that governs how foreign individuals and companies can operate here. At Wijesinghe Chambers, we help investors navigate these rules with clarity and confidence.
The Legal Framework
Foreign investment in Sri Lanka is primarily governed by the *Board of Investment Act, the **Companies Act No. 7 of 2007*, and related laws on land ownership, taxation, and sector-specific regulations. In many cases, foreign investors can establish wholly-owned companies or joint ventures, though there are restrictions in certain industries such as telecommunications, shipping, and land ownership.
Land Ownership and Restrictions
One of the most significant areas investors ask about is *land ownership*. Current law generally restricts foreigners from directly owning freehold land in Sri Lanka. However, investors can take advantage of alternatives such as long-term leases (up to 99 years), condominium purchases above the fourth floor, or BOI-approved projects that provide exemptions.
Repatriation of Profits
Investors are naturally concerned about how they can bring returns back home. Sri Lankan law allows the *repatriation of dividends, profits, and capital* in foreign currency, provided that the company is properly registered and compliant with the Central Bank regulations. This assurance is key for international businesses looking to grow here.
Sectors Encouraged for Investment
The government encourages foreign investment in areas such as IT, renewable energy, tourism, agriculture, and export-oriented manufacturing. Special tax concessions, duty exemptions, and simplified approval processes are often available for businesses that fall under BOI-approved projects.
Why Legal Guidance Matters
While opportunities are strong, regulations can be complex and are subject to change. From company incorporation to structuring joint ventures and applying for BOI concessions, professional legal advice ensures compliance and reduces risk.
At Wijesinghe Chambers, we specialize in guiding investors through these processes, ensuring that every step — from setup to profit repatriation — is legally sound and strategically planned.