Sri Lanka to ease restrictions on foreigners acquiring land for investment, but deceitfully making repatriation of invested money impossible.
Posted on September 2nd, 2016
Sri Lanka News
Sri Lanka is taking measures to ease the restrictions imposed on foreigners acquiring land in the island nation for investment projects, the Ministry of Finance said in a statement on Wednesday. But the strict foreign exchange control imposed by the Central bank make it impossible for the investors to repatriate their invested money.
According to the statement, a new draft bill is being prepared with the aim of providing provisions to provide ownership of land without being affected by the Land Restriction and Alienation Act of Sri Lanka.
The Statement further said, local and foreign investors as well as entrepreneurs will be encouraged to expand their businesses clearing impediments in obtaining land and buildings under the government’s mid-term economic plan.
Meanwhile, the restrictions on foreigners, companies, and locally incorporated firms with over 50 percent foreign ownership from buying land in the country will also be removed under strict conditions.
However the independent observers believe that Sri Lankan politicians are making a ploy to get the investment in and tapped their capital in Sri Lankan banks for the purpose of improving the country’s foreign exchange reserves.
A large number of Sri Lankan expatriates who spend their hard earned foreign money for buying luxury apartments in Colombo are facing real dilemma when they want to sell their apartments and try to repatriate their investment back to their own countries of residence.
The strict exchange control regulation imposed by the central bank has made any property transactions to be carried out only using local currency. To use foreign exchange in property transactions is illegal and a punishable offence. Any property transaction that should be carried out in Sri Lanka should use only local currency (Rupees). The regulation stipulates that the foreigners acquiring land for investment should change their currencies in to Sri Lankan Rupees at buying rates published by the Central Bank before the transaction.
August 31st, 2016 at 2:32 pm
The statement “repatriating invested money out of Sri Lanka is impossible” is not strictly correct.
If the invested funds are brought into Sri Lanka via an SIA (Securities Investment Account) at a Sri Lankan bank, and invested in Sri Lankan securities and/or certain types of IMMOVABLE PROPERTY, existing laws allow those funds to be repatriated to a foreign country when those assets are liquidated.
Land in Sri Lanka is among those approved IMMOVABLE property, but the leagal documents to prove the origin of those funds from abroad via an SIA account must be submitted.
However, all types of land cannot be bought by foreigners under existing Sri Lankan law.
For example, only high rise apartments above the sixth residential floor can be bought by a foreigner, and those funds must be brought through an SIA account. There are other loopholes through which real estate, like ground floor homes, can be acquired by foreign nationals, but those are complex legal strategies deployed primarily by tract home developers.
My own position on land ownership in Sri Lanka by foreign nationals is that it should be TOTALLY PROHIBITED.
As a COMPROMISE, at least the current restrictions on LAND ALIENATION should be maintained, and foreign businesses should not be allowed to own more than 49% of their business properties. The balance 51% should be owned by their Sri Lankan business partners. This may be a workable compromise to protect Sri Lankan citizens, and has the added benefit of forcing the foreign businesses to partner with Sri Lankan citizens, getting another benefit for a our people.
August 31st, 2016 at 3:37 pm
Hi Ananda
Very good information for those who wish to buy land or apartments in Sri Lanka.
But how many of those existing owners of apartments in Colombo brought their funds via SIA.
They really got their money stuck in SL
August 31st, 2016 at 4:11 pm
Dear NMY,
Yes, I don’t think many people are aware of the opportunities available now for investing in SL without getting their funds stuck for good in Sri Lanka.
That is unfortunate, because both real estate and stock prices are relatively low after the regime change debacle, and they are attractive investments now Sri Lanka, if you can cope with the looming political situation.
It is die-hard patriots like me who have already invested a major portion of lifetime earnings in SL, and are at the tail end of our lives and want to leave all their assets for the benefit of Sri Lanka, who will invest in Sri Lanka now.
The last time I checked my store of accumulated merit, I sill be reincarnated, but it is still not possible to carryover my assets to my next life, so I might as well leave it all in my Motherland to benefit the Sri Lankan people.
BTW, this brings up a brand-new business opportunity for an enterprising young Sri Lankan: Reincarnation Services!
In return for a modest service fee, this business will secure and invest all your assets acquired in this life, will locate you in your next birth, and at a specified age, and will deliver the assets to you.
A 100% guarantee in writing is required, of course!
August 31st, 2016 at 9:55 pm
I am glad that that I read the above article.looks like the government is dishonest by getting the foreigners to invest just to build up their reserves and revert back to old restrictions.
I am glad that my business is built on our family inheritance and legally transferred foreign exchange.It seems my siblings born abroad holding foreign citizenships are not allowed to take over from me.This is sad for the island and my decision to further invest will be cautious and even stopped.
It seems SL will be friendless and vulnerable,without the help and influence of the expatiate faithful.
We may exert pressure on our host countries to reciprocate targeting the very people who had brought this restrictions,good for the goose is good for the gander. It seems having double standards is normal and part of our culture.But we will stand by our closest.Looks like we are condemning our people to a permanent damnation,even a failed state like Zimbabwe..
September 2nd, 2016 at 1:11 am
It is important to note that None of this apply to dual passport holders and expat Sri Lankans because they are considers immigrants out of Sri Lanka not foreigners.
They can repatriate usd$150k per person with the right approvals (you need your Sl passport you left the country with) and $20k/year after that.
September 2nd, 2016 at 3:07 am
The prima factory has been provided a ten per recent tax break by this treacherous UNP government. This amounts to 135,000 million rupees. We wonder how much of this ended up funding the UNP election campaigns? This vast amount of money, 135,000 million rupees could have been used to purchase rice at Rs.50 per kilogramme minimum from all rice farmers.
Meanwhile, while Thailand, Burma etc. eats rice, even their presidents eat rice, our idiotic Sinhala people’s rice consumption in kilogrammes per annum has gone down. Instead Sinhala people’s wheat consumption per kilogramme per annum has gone up. We are today spending vast amounts of foreign exchange purchasing wheat making US farmers happy and the prima company rich while we keep consuming wheat. All the while our Sri Lankan rice farmers are suffering due to reduction of rice consumption.
We should urge the treacherous UNP Government to reinstate the ten per cent tax on wheat and bring on a programme to increase rice consumption in the country. However this US imperialist worshipping subservient government will do no such thing.
September 2nd, 2016 at 7:52 am
How much LAND is going to be made available for foreigners to purchase ?
Already in the Yahap Grand Plans :
5,000 acre lots on 99 yr leases, (that is, 5 generations to come), to foreigners.
* First, the LAND & buildings in Lanka must be given to local people to grow and have homes & shelter.
* Landless Kandyan Peasants must be given LAND too. Their lands were ursurped by the British to grow Tea !
Also in the Yahap Grand Plans :
– ETCA
– sea tunnel to Tamil Nadu (with over 20 million Tamil Dalit people – Caste written into their birth certificates, and the INDIAN Census done with Caste base).
– New Constitution (what might that bring ?)
Protest. Protest. Protest in every non-violent way possible, loud and clear for the whole world to hear !
There is no other way out of this utterly inglorious Sinhala & Country hating, nutty mess made worse by govt called Yahapalanaya, headed by RW/CBK/MS, who all seem to have an axe to grind with Sri Lanka’s majority people, the Sinhale.
What more can we say when Pres MS said that he appointed RW as the Exec PM ‘because the west wants it so’. This proves that Lanka is NOT a functioning Democracy.
How did Lanka come to face this mess ?
– Near 500 yrs of Colonisation with importing of Tamil Dalit Indentured Labor by the British & Dutch, numbering over one and a half million workers from Tamil Nadu. These workers did not go back. In fact, more cheap labor was imported from Tamil Nadu. Importing of foreign labor must STOP.
– Cold War (1946-1991 – some in Lanka are carrying on as if the Cold War is still on !).
Cold War type politics must STOP.
Copy Britain & Switzerland re SECURITY ISSUES which are paramount. A Country cannot function without feeling SECURE.
September 2nd, 2016 at 12:09 pm
The Land is one commodity which is in short supply in Sri Lanka. We have only 25,000 Sq.Miles in Sri Lanka total while we have a population of almost 21 million. This means we have less than 0.0012 Sq.Miles per person. This equals 0.77 acres per person. When you take into account the forest reserves, waterways, plantations, land used for farming etc., the amount of land for people is very little.
We SHOULD NOT BE EASING RESTRICTION ON LAND FOR ACQUISITION BY FOREIGNERS. Having lived abroad, I can tell you how rapacious India and West are with regard to land and other acquisitions all over the world. The major Corporations/Businesses inside and outside Sri Lanka whether Indian or Western will take over the land as they did in 1815 in UVA Wellassa and dispossess the people of their land and use the land for mining or grow cash crops with no compunctions.
With a corrupt Govt like the Yahapalanaya who will hand over the country on a platter to either India or the West in return for money, the Professionals MUST ENSURE THAT THE RULES AND LAW PREVENT THIEVING OF LAND BY THE CORPORATIONS.
See: http://en.worldstat.info/Asia/Sri_Lanka/Land
September 5th, 2016 at 9:26 am
Plumblossom
I would like to write about Prima but haven’t got the time.Best ever happened to our bread….