PURCHASE AND OWNERSHIP OF PROPERTY BY FOREIGNERS IN SRI LANKA – KEY INSIGHTS

Foreigners face restrictions on direct ownership of freehold land in Sri Lanka under the?Land (Restrictions on Alienation) Act No. 38 of 2014. Foreign nationals, companies, and entities with over 50% foreign shareholding cannot own freehold land in Sri Lanka, except under specific exemptions. The avenues available to foreign nationals and entities to own or lease landed property are addressed below:?

1. Long-Term Leasing?

? Foreigners can lease land for up to 99 years, a popular alternative to ownership. Leases provide secure tenure for residential, commercial, or other uses. Lease agreements must be registered with the land registry and are subject to stamp duty based on the first 20 years of rent. Leasehold rights can also be mortgaged for financing.?

2. Corporate Ownership Structures?

? Foreigners can acquire land via locally incorporated companies with foreign ownership under 50%. Joint ventures with Sri Lankan nationals are commonly used to comply with these restrictions, enabling foreign investors to maintain an interest in the property.?

3. Condominium Ownership?

? Foreign nationals can purchase condominium units, irrespective of floor level, provided the purchase is entirely funded through inward remittances. This option, exempt from ownership restrictions, has spurred foreign investment in Sri Lanka’s growing condominium market, especially in urban hubs like Colombo.?

These legal pathways cater to expatriates, retirees, and foreign investors seeking to leverage the country’s natural beauty, strategic location, and economic opportunities.?

You can find a more detailed overview of foreign ownership of property in Sri Lanka here - https://www.invictus.law/insights/purchase-and-ownership-of-property-by-foreigners-in-sri-lanka/