FOREIGN OWNERSHIP OF REAL ESTATE IN SRI LANKA

Freehold Purchase Possible - Excellent Rental Yields and ROI

WHY INVEST?

Since peace came to Sri Lanka in 2009, the country has prospered and the economy has boomed. An influx of foreign investment has seen the growth of industry, tourism, and sustainable economies, to the degree that GDP growth of 7% per annum has become normal.

Construction has grown at a double-digit rates and was 10.3% of GDP in 2013. The IT/outsourcing industry is booming. Shangri-La and Moevenpick are two of the many 5-star hotels that have opened in Colombo, and many more luxury/boutique hotels have opened on the Galle south coastline.

Sri Lanka has long been known as the “Pearl of the Indian Ocean”. This stunning country offers culture, breath-taking landscapes, delicious cuisine, and friendliness in abundance. Sri Lanka’s enchanting people make the country so easy to travel and live in. The viridian blue of the Indian Ocean is mesmerising, with temples and shrines dotted all along the coast of Sri Lanka perfectly combines culture with luxury.

WINDS OF CHANGE

In 2015 the new government of Sri Lanka promised a change of wind – to make Sri Lanka the most attractive investment opportunity in Asia.  According to the Travel and Tourism Index 2015, Sri Lanka’s travel and tourism competitiveness jumped no less than 18 ranks over the past four years, driven by strong government focus on the tourism sector, remarkable infrastructure growth, and enhanced marketing/promotional efforts for the country as a whole.

The country saw close to 1.8 million foreign tourist arrivals in 2015, having registered an average growth rate of 16% over the past five years, and is working towards a target of 2.2 million yearly tourist arrivals. Supported by the surge in tourist arrivals, occupancy rates at graded hotel establishments increased to 74.3% during the year, with total guest nights increasing by 38.0% in 2014.

FREEHOLD OWNERSHIP

Sri Lanka now provides an attractive climate for foreigners to invest in property, with rental yields at 5-6% net and huge capital gains potential. Tamba Villas are very excited to be the first development in Sri Lanka to be able to offer unencumbered Freehold ownership to their foreign buyers.

Previously foreign investors could only buy Freeholds in Condominium developments if they were situated on the 4th floor or above. This meant foreigners could only buy Freehold in high rise apartment blocks. However, on the 31st July 2018, the Parliament of Sri Lanka passed a Bill to amend the Land (Restrictions and Alienation) Act, No 38 of 2014. The Bill amended the law to allow foreign ownership of Freeholds on any condominium development units.

As a result, this allows Sri Lankan expats and their children who do not have the country’s citizenship to purchase a residential property.  This new law will also allow foreign investors who wish to invest in Sri Lanka, to carry out their businesses while residing within the country.

HOW IT WORKS

The recommended process for a foreigner to purchase is:

  1. Open an Inward Investment Account (IIA), a special account designated for eligible investors resident in or outside Sri Lanka to route funds to invest in the permitted investments.  (may be maintained in Sri Lanka rupees or in any designated foreign currency and  jointly by eligible investors).
  2. Transfer funds into the IIA
  3. Sign a Letter of Offer
  4. Make an initial deposit of US$5,000
  5. Staged Payments thereafter till completion

The top 5 Sri Lankan Banks are contactable via their websites, or we are happy to recommend banks for you such as Sampath, Bank of Ceylon, HSBC, NAB. If you have any questions or would like assistance please get in touch, we are happy to help.

  • I believe Sri Lanka’s long term prospects are among the most attractive in the frontier universe. Therefore. we view Sri Lanka as a compelling place to invest on a relative basis as well as on an absolute basis”

    – Blackrock’s Fund Manager and Member of the Emerging Markets Specialist Team

A simple process to holiday, retire or invest on one of the most beautiful islands in the world.