SRI LANKA Law and Practice Contributed by: Ayanthi Abeyawickrama, Varners
2.3 Commitments Required From Foreign Investors Foreign investors operating under the BOI or the Colombo Port City Economic Commission are required to comply with a range of legal, regula - tory and contractual obligations. These typically include: • remitting capital through designated invest - ment accounts; • complying with sector-specific or project- specific conditions; and • meeting any timelines or milestones agreed with the relevant authority. Investors must also ensure ongoing compliance with Sri Lankan laws relating to taxation, labour, environmental protection and company admin - istration. Where approvals or incentives are granted under a BOI agreement or Port City registration, the investor is also expected to honour any commit - ments set out therein, such as capital infusion deadlines, local employment targets or reporting obligations. Non-fulfilment of such commitments may result in withdrawal of approvals, suspen - sion of incentives or other regulatory sanctions. 2.4 Right to Appeal The right to appeal or challenge decisions affect - ing foreign investment in Sri Lanka depends on the applicable regulatory framework and the nature of the administrative or contractual rela - tionship between the investor and the regulatory agency. For investments under the BOI or the Colombo Port City Economic Commission, investors may seek administrative review of adverse decisions by making representations to senior officials, or to the Director General of the BOI or of the
Colombo Port City Economic Commission. This internal review process is often the first recourse and is typically expected to be exhausted prior to initiating formal dispute resolution by referring the matter to arbitration. In addition, the affected parties may seek judicial redress by way of a writ application to the Court of Appeal, challenging the legality or procedural propriety of the administrative act. In addition, if the decision amount to an infringement of a fun - damental right, a fundamental rights application may be filed before the Supreme Court, subject to the 30-day time limit. Sri Lankan administrative law principles gener - ally require that internal or administrative review mechanisms be pursued first, before resorting to court action, unless such remedies are una - vailable, are futile or have been unreasonably delayed. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity The most common legal structure adopted by foreign investors in Sri Lanka is the limited liabil - ity company incorporated under the Companies Act, No 7 of 2007. This may take the form of a private limited company or a public limited company, depending on the scale and intended nature of operations. Foreign investors typically choose their legal structure based on:
• the nature of the business; • regulatory requirements; • sector-specific approvals; • tax considerations; and
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