How to buy property in Sri Lanka from abroad: Visa restrictions, FDI, and mortgage hacks.

Can Foreigners Legally Buy Property in Sri Lanka?

Yes, foreigners can legally own property in Sri Lanka, but there are important rules to follow. The process is different depending on whether you are buying an apartment or a piece of land with a house.

For many, the easiest way to invest is by purchasing an apartment or condominium. Foreign nationals can buy condo units with full ownership (freehold) as long as the property is on the fourth floor or higher. The payment for the property must be made in a foreign currency sent from abroad through a legal banking channel.

Buying land or a house directly is more restricted. Sri Lankan law prevents foreigners from owning land outright. However, there are two common and secure methods to get around this:

• Lease the Property: A foreigner can lease land for a period of up to 99 years. This long-term lease gives you full rights to use, build on, and enjoy the property for the entire term. It is a very common and safe way for expats to secure a home or business location.
• Form a Company: You can set up a Sri Lankan private limited (Pvt) Ltd company to purchase the land. As a foreigner, you can own up to 49% of the company’s shares, while a Sri Lankan partner must hold the remaining 51%. This structure gives you legal control over the property owned by the company. Learning how to register a small business in Sri Lanka is the first step for this option.

Regardless of the method, you must transfer funds for the purchase through an Inward Investment Account (IIA) at a local bank. This ensures the transaction is transparent and allows you to send the proceeds back overseas if you sell the property in the future. Using a good remittance guide can help you find the cheapest way to send your money.

## Visa Pathways and FDI Rules for Property Investors Buying property in Sri Lanka as a foreigner is possible, but it is important to follow the government's rules on Foreign Direct Investment (FDI). These rules are designed to protect the local market while welcoming overseas capital. Understanding them is your first step to owning a home in paradise. The most important rule is that all your money must come into Sri Lanka through an Inward Investment Account (IIA). This is a special bank account you can open at most major banks in Sri Lanka. It allows you to transfer foreign currency legally for your purchase. Using the right service is key to getting good exchange rates; you can compare options in our remittance guide for Sri Lankans. What Can You Buy? * Apartments/Condominiums: Foreigners can buy condominium units outright, as long as the payment is made in foreign currency through your IIA. * Land and Houses: You cannot buy land directly. However, the most common solution is to secure a long-term lease, which can last up to 99 years. This gives you full rights over the property for the duration of the lease, making it a very secure option. Getting a Visa Through Investment A significant property investment can also open a door to living in Sri Lanka long-term. The country offers a Residence Visa Program for foreign investors. By investing a minimum required amount in a property or other eligible venture, you and your family can qualify for a residence visa. This allows you to stay in the country and enjoy your new home without the hassle of short-term tourist visas. The government encourages this type of investment, as it contributes to the economy and has led to a recent doubling of FDI inflows. Always check with the Department of Immigration and Emigration for the latest investment thresholds and requirements.

Financing Your Purchase: Mortgage Hacks for Non-Residents

Securing a local mortgage in Sri Lanka as a non-resident can be tricky. Banks often see foreign income as harder to verify and therefore a higher risk. However, with the right strategy, you can greatly improve your chances of getting your loan approved.

Here are some practical mortgage hacks for buyers living abroad:

• Use Your Dual Citizenship: If you are a Sri Lankan citizen or hold dual citizenship, you are in a strong position. Local banks view you as a much lower risk. Use your Non-Resident Foreign Currency (NRFC) or Resident Foreign Currency (RFC) account to show your savings and prove your financial stability.
• Partner with a Local Resident: Teaming up with a Sri Lankan citizen, such as a spouse or trusted family member, can unlock local financing options. The loan can be taken in their name or held jointly. Always create a clear legal agreement to protect your investment.
• Build a Strong Remittance History: Regularly sending money to a Sri Lankan bank account demonstrates your financial connection to the country. This creates a trusted record for local banks to review. Using proper channels is important; learn about the best ways to receive money from abroad with low fees.
• Offer a Larger Down Payment: Banks are more likely to approve your application if you can pay a large portion upfront. A down payment of 40% or more significantly reduces the bank's risk, making you a much more attractive borrower. This can also help you build a good credit history in Sri Lanka for the future.

Finally, some large apartment developers offer their own financing plans or have special partnerships with banks. Exploring these options can provide a straightforward path to funding your purchase.

The Purchase Process & Post-Purchase Management

Once you've found your ideal property and secured your financing, it's time to navigate the purchase and plan for its long-term management. This process requires careful steps, especially when you are living abroad.

Key Steps in the Purchase Process

Having a trustworthy lawyer in Sri Lanka is the most important step. They will act on your behalf using a Power of Attorney (POA). The process generally follows these stages:

• Due Diligence: Your lawyer will check the property's title deed at the Land Registry to ensure the seller is the true owner and that there are no legal issues.
• Sales Agreement: After confirming the details, a Sales and Purchase Agreement (SPA) is drafted. You will sign this, and an advance payment (usually 10%) is made to the seller.
• Fund Transfer: You must transfer the full payment into your Inward Investment Account (IIA) in Sri Lanka. Using modern remittance services can be cheaper and faster than traditional bank transfers.
• Finalising the Deed: A Notary Public will finalise the new deed. Once you pay the balance, the deed is signed and officially registered under your name.

Managing Your Property from Abroad

Owning a property is just the beginning. Effective management ensures your investment remains safe and profitable. Consider hiring a property management company to handle day-to-day tasks. Their services often include:

• Maintenance and Security: Arranging for repairs, cleaning, and ensuring the property is secure.
• Tenant Management: Finding and screening tenants, collecting rent, and handling any issues that arise if you plan to lease your property.
• Bill Payments: Paying utility bills and local council taxes (rates) on time is crucial. Thankfully, it is easy to pay bills online in Sri Lanka, which simplifies the process.

Proper post-purchase management protects your asset and provides peace of mind while you are overseas.