While Sri Lankan law restricts direct freehold land purchase by foreign nationals, a well- established and secure legal structure exists for investment. This method, used widely by foreign investors, allows you to have full control and security over your chosen property.
Here is a simple guide to the process:
Verify the Property (Due Diligence): First, your Sri Lankan lawyer will conduct a thorough check on the land’s title (the ‘deed’). This search confirms the current owner has the clear and legal right to sell the property, ensuring it is free from any hidden problems.
Confirm the Boundaries (The Survey): A licensed surveyor is hired to measure the land’s exact size and confirm its official boundaries. This step ensures that the physical land matches the legal documents perfectly.
Open Your Investment Bank Account: To bring your funds into Sri Lanka legally, you must open a specific/designated bank account called an Inward Investment Account (IIA). All funds for the property purchase must be processed through this account.
Establish Your Legal Structure: To hold the property, you will create a new Sri Lankan company. Because this company will be majority-owned by a Sri Lankan (on paper), it is legally allowed to buy freehold land. You will also create a 100% foreign-owned “Holding Company” to act as your investment vehicle.
Appoint a Local Partner: Your Sri Lankan ‘Property Company’ will be set up with a trusted local partner (a Sri Lankan citizen or entity) holding 51% of the shares. Your ‘Holding Company’ will hold the remaining 49%.
Take Full Control with Shares: This is the key to your control. The company is set up so that your 49% of the shares are ‘Voting Shares’, giving you 100% of the decision- making power. The 51% of shares held by your local partner are made ‘Non-Voting’.
Secure Your Investment: To secure your entire investment, you will provide a ‘loan’ from your IIA account to the property company that you hold 49% voting shares. The total shares of the property company are then held by you as security (collateral) for the loan, giving you full and secure control over the entire 100% shareholding of the property company.
Complete the Land Purchase: The ‘Property Company’, which you now fully control, uses the funds from your IIA account to legally purchase the land.
This entire process is straightforward, secure, and gives you complete control over your asset.
However, it is a specialist legal structure. To ensure it is built and managed correctly, you must use a professional ‘company secretarial firm’ in Sri Lanka. They will handle the company setup, all legal filings, and annual management, leaving you free to enjoy your investment.
For this reason, this process must not be attempted without specialist legal counsel.
Your first and most important step is to engage a reputable company secretarial firm in Sri Lanka.
By law (the Companies Act, No. 7 of 2007), every company in Sri Lanka must have a qualified Company Secretary. These firms are your primary legal experts for this process. They are responsible for:
Legally incorporating the companies.
Structuring the share capital (voting vs. non-voting).
Drafting the loan agreement, trustee agreements and shareholder agreements.
Ensuring your structure is fully compliant with all government regulations.
Managing all mandatory annual filings to keep your company in good legal standing.
For further clarification, we strongly advise you to meet with a professional company secretarial firm to discuss your specific needs.
Should you require assistance in finding a qualified and vetted firm that specializes in foreign real estate investment, Lankainvestment.com is available to help connect you with the right professionals.
Yes—but the rules depend on the type of property.
Foreign buyers can purchase certain property types directly, while land ownership is subject to specific legal regulations.
Depending on your investment goals, you may purchase:
Our team works alongside experienced legal professionals to recommend the most suitable structure for each client.
Foreign buyers generally have three options.
Option 1 — Apartment Ownership
Eligible condominium units can often be purchased directly, subject to current regulations. This option is ideal for buyers seeking a low-maintenance investment or holiday residence.
Option 2 — Long-Term Lease
Foreign buyers may acquire certain properties through long-term lease arrangements. This provides security while avoiding the complexity of establishing a company.
Option 3 — Corporate Ownership Structure
Many international investors purchasing land or development opportunities choose a professionally structured Sri Lankan company. This approach provides long-term flexibility while complying with local regulations.
Your lawyer can advise which structure best suits your investment objectives.
For buyers investing in land, we follow a structured approach designed to provide transparency, legal compliance, and investment security.
Step 1 — Legal Due Diligence
An independent lawyer verifies:
Only properties with satisfactory legal reviews proceed to the next stage.
Step 2 — Survey Verification
A licensed surveyor confirms:
This ensures the legal documentation accurately reflects the property.
Step 3 — Open an Inward Investment Account (IIA)
Investment funds are transferred through a designated Sri Lankan Inward Investment Account (IIA) in accordance with applicable banking regulations.
This provides a transparent and traceable investment pathway.
Step 4 — Establish the Investment Structure
Where appropriate, a Sri Lankan property company is established to hold the property.
A separate holding company may also be created as part of the overall investment structure based on legal advice and the investor’s objectives.
Step 5 — Establish Governance
The ownership and governance structure is carefully prepared to ensure compliance while protecting the investor’s interests.
Every structure is prepared with independent legal advice.
Step 6 — Complete the Property Purchase
Once all legal, banking, and compliance requirements have been completed, the property company proceeds with the acquisition and ownership is registered in accordance with Sri Lankan law.
The purpose of the structure is to provide:
Every investment should be established with advice from qualified legal and financial professionals.
Yes.
Many of our international clients complete their purchases entirely from overseas.
We assist with:
Where necessary, legal representatives can assist with documentation on your behalf.
Requirements vary depending on your investment structure, but may include:
Your lawyer will advise you on the exact documentation required.
In addition to the purchase price, overseas buyers should budget for:
Understanding these costs before investing helps you plan with confidence.
Yes, provided you complete proper legal due diligence and work with experienced legal and property professionals.
Many investors purchase villas, apartments, and hospitality properties with the intention of generating rental income.
Your investment strategy should always be based on local regulations and professional advice.
Yes.
Subject to applicable laws and your ownership structure, properties can generally be sold in the future.
Not necessarily.
Many purchases can be managed remotely with the assistance of your lawyer and the Lanka Investment team.
The timeframe depends on the property, legal reviews, banking procedures, and documentation, but a well-prepared transaction can often be completed within several weeks.
Buying property overseas should never feel uncertain.
Lanka Investment works alongside experienced lawyers, surveyors, banking professionals, and local specialists to provide international buyers with clear guidance throughout the entire investment journey.
From your first enquiry to the completion of your purchase, our goal is to make investing in Sri Lanka simple, transparent, and secure.
Yes, the structure itself is 100% legal. It uses the official laws in the Companies Act of Sri Lanka. This method is a well-established and standard way for foreign investors to securely control a land-owning company.
A ‘Company Secretarial Firm’ is a group of qualified legal experts. By law, every company in Sri Lanka must have one. They are essential for you. They will build this entire legal structure, draft the ‘iron-clad’ loan agreements to protect your investment, and manage all your annual government paperwork.
The IIA is a special bank account required by the government. It is used to bring your investment funds into Sri Lanka legally. Using this account also secures your right to take your profits (and original capital) back out of Sri Lanka in the future.
This is the most important part of the structure. Your 49% of shares are ‘Voting’ shares, and the 51% held by the local partner are ‘Non-Voting’ shares. This split gives you 100% of the decision-making power. Separately, the loan agreement (which you provide) gives you full security by holding the other 51% of shares as collateral.
The ‘local partner’ is a Sri Lankan citizen or entity whose role is to hold the 51% ‘Non-Voting’ shares to make the company legally Sri Lankan. They have no control or decision-making power. Your Company Secretarial Firm will usually provide this professional, trusted service.
It is a specialist legal process, but it is not complicated for you. Your professional Company Secretarial Firm will handle all the difficult parts. For you, the process is simple:
• You provide the funds.
• You sign the documents they prepare.
• You get full, secure control of your property.
It is a different option. A lease is temporary. This structure gives your company freehold ownership, which is permanent. It gives you a solid, lasting asset and is a more common choice for serious, long-term investors.
*Disclaimer: This guide is for informational purposes only. All legal and financial matters must be handled by a qualified Company Secretarial Firm and a lawyer in Sri Lanka. Lankainvestment.com is available to help connect you with vetted professionals.
