SRI LANKA Law and Practice Contributed by: Ayanthi Abeyawickrama, Varners
Board of Investment of Sri Lanka The Board of Investment of Sri Lanka (BOI) is the country’s principal investment promotion agency, established under the Board of Invest - ment of Sri Lanka Law, No 4 of 1978. The BOI functions as a central facilitation point for foreign and domestic investors. Approval from the BOI is typically sought where: • the investment qualifies under a BOI- approved sector or scheme; • fiscal incentives such as duty exemptions are being claimed; • strategic development status is being pur - sued under the Strategic Development Pro - jects Act; or • a foreign investor seeks to increase their shareholding percentage or obtain approval for 100% foreign ownership in sectors where ownership is otherwise limited or restricted. BOI approval is not mandatory for all foreign investments, particularly for minority equity par - ticipation in non-restricted sectors. In addition, investments approved by the BOI are entitled to operational conveniences such as streamlined import/export procedures, land allocation in industrial zones, and assistance with obtaining work visas for expatriate staff. The Colombo Port City Economic Commission Foreign investments made within the Colombo Port City Special Economic Zone are governed by a distinct regulatory framework under the Colombo Port City Economic Commission Act, No 11 of 2021. The Colombo Port City Economic Commission serves as the single-window regu - lator for all business and investment activity within the zone.
Any person wishing to undertake a business, commercial or financial activity in Port City must first obtain a business registration and relevant authorisations or licences from the Commission. Unlike the general regime administered by the BOI, Port City offers a highly liberalised envi - ronment with no foreign ownership restrictions, guaranteed capital and profit repatriation, tax incentives, and exemptions from certain domes - tic laws (subject to the specific guidelines and rules issued by the Commission). All remittances into and out of Port City must be routed through Port City Investment Accounts (PCIAs), and compliance with the Commission’s directives is mandatory for continued operation. Investors seeking to benefit from the Port City regime must ensure that their project or enter - prise aligns with the permitted activities and is duly structured to fall within the scope of the Special Economic Zone as defined under the Act. Additional Considerations In addition to the foregoing, sector-specific approvals may be required from relevant regu - latory bodies, such as: • the Central Bank of Sri Lanka, in respect of regulated sectors (eg, finance and banking); • the Telecommunications Regulatory Commis - sion of Sri Lanka, for ventures involving tel - ecommunications infrastructure and services; • the National Medicines Regulatory Authority, for the manufacture, importation, marketing and distribution of pharmaceuticals, medical devices and borderline products; and • the Central Environmental Authority, for investments involving industrial activity or development projects requiring Environmental Impact Assessments (EIAs) or other forms of environmental clearance.
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