COLOMBO: 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.
