Sri Lankans allowed to invest US$200,000 outside country

ECONOMYNEXT – Sri Lanka’s new forex law has allowed an individual to invest 200,000 dollars outside the country, in their lifetime, a partnership 300,000 dollars, but an unlisted company could invest 500,000 US dollars a year.

Sri Lanka ended draconian laws against individual investments abroad, under then Central Bank Governor Nivard Cabraal, who relaxed many controls, which are continued under a new simplified exchange control low.

A listed company in the Colombo Stock Exchange could invest up to 2.0 million dollars a year.

The outward investors could buy shares, units, debt securities, and sovereign bonds.

A partnership or company setting up an office overseas could also take out 300,000 US dollars a year.

The funds have to be remitted from an outward investment account. The limits could be exceeded by the use of capital gains.

Sri Lankan firms could in general invest any amount to set up offices or subsidiary with specific central bank approval.

Sri Lanka has exchange controls because a currency board was replaced in 1951 with a soft-pegged central bank which printed money and generated foreign exchange shortages, high inflation and currency collapses. (Colombo/Nov28/2017)

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