Our Products & Services: Investments

We also provide a facility for you to credit NRFC (Non-Resident Foreign Currency), RFC (Resident Foreign currency) accounts.

We also facilitate the opening of Non-Resident Rupee Accounts (NRRA), SIERA and RANSI accounts for investors.

Foreign Direct Investments in Sri Lanka

Share Investment

All share investment by non-residents other than investors in BOI companies must be made through a Share Investment External Rupee Account (SIERA). Sale proceeds of shares and liquidation proceeds of these investments are permitted to be remitted freely after meeting domestic liabilities such as taxes. Non-residents are permitted to invest in up to 100 per cent of a unit trust licensed under the Securities and Exchange Commission Act provided that the trust deed creating the unit trust and the agreement between the trustees and the management company of such unit trust contains a restriction that not more than 20 per cent of the deposited property shall be invested in government securities. A special scheme of investment is permitted to Sri Lankan citizens resident outside Sri Lanka through RANSI accounts.

Non-resident investment is permitted in respect of rupee companies up to 100 per cent of the issued capital, subject to specific exclusions and restrictions. These exclusions and restrictions are set out in the Gazette No: 1232/14 of 19/04/2002 as revised by Gazette No1248/19 of 08.08.2002.

Rupee Account Facilities for Non-residents

Commercial banks are permitted to open and maintain the following rupee accounts for non-residents:

i. Non-resident Rupee Accounts (NRRA)

ii. Share Investment External Rupee Accounts (SIERA)

iii. Rupee Accounts for Non-resident Sri Lankan Investment (RANSI)

Non-Resident Rupee Accounts (NRRA)

a) Non-resident rupee accounts may be opened for foreign nationals resident outside Sri Lanka, companies and firms registered outside Sri Lanka, Sri Lankan nationals resident outside Sri Lanka (other than emigrants), foreign banks, which do not carry on banking activities in Sri Lanka.

Permitted credits and debits to Non-resident Rupee Accounts (NRRA) held by foreign nationals resident outside Sri Lanka and companies and firms registered outside Sri Lanka are the following:

Credits proceeds of inward remittances received in favour of the account holder and permitted local credits other than funds derived from capital transactions.

Debits outward remittances in respect of current account transactions and local disbursements.

Permitted credits and debits to NRRA held by Sri Lankan Nationals resident outside Sri Lanka are the following:

Credits proceeds of inward remittances in favour of the account holder and local credits.

Debits outward remittances in respect of current account transactions.

d) NRRAs in respect of foreign banks may be operated without any restriction. Back to Top

Share Investment External Rupee Accounts (SIERA)

Permitted credits and debits to SIERA are given below:

Authorised dealers must examine documentary evidence to determine the source of credits/debits.

A. Permitted Credits:

(a) Inward remittances

(b) Transfers from NRFC/Off-shore accounts

(c) Sale proceeds of shares and dividends earned on shares

(d) Commissions relating to transaction of shares

(e) Fees and any corporate benefits received by a non-resident lender in respect of shares lent to a borrower under the Stock Borrowing and

Lending Scheme (SBL)

(f) Cash collateral paid out of a SIERA of a non-resident borrower and refunded to the same non-resident borrower under the SBL scheme

(g) Cash to be credited to the lender in the event of any failure to transfer shares by the borrower under the SBL scheme 

B. Permitted Debits to SIERA:

(a) Expenses for the purchase of shares

(b) Remittances of dividends of shares

(c) Remittances of sale proceeds of shares

(d) Local expenses of the account holder

(e) Payment to stockbrokers or commercial banks as commissions

(f) Fees and funds required to pay corporate benefits to the security lender on shares borrowed by a non-resident borrower under the SBL scheme.

(g) Any cash collateral to be provided by a non-resident borrower

C. Other issues with regard to investment in Sri Lanka through a SIERA

Authorised dealers may enter into contracts with foreign investors for the purchase of foreign exchange forward, for settlement of payments in respect of shares purchased on their behalf up to a period calculated in accordance with the rules laid down by the Colombo Stock Exchange (CSE) for buyers’ settlements. The duration of such contract is limited to a period from the date of transaction to the date of settlement i.e., trade plus five market days. Foreign currency remitted by the foreign investors as subscription for primary shares may be held in an offshore banking unit and credited upon allotment of shares, to the SIERA of the investor. In the event of any failure in this process, the remittance will be refunded to the investor. Authorised Dealers are permitted to approve applications for export of share certificates issued by companies in the CSE in respect of shares purchased by a SIERA account holder out of the funds held in the account. Back to top

Rupee Account for Non-resident Sri Lankan Investment (RANSI)

Non-resident Sri Lankans, that is Sri Lankan citizens who have proceeded abroad to take up employment or to set up a business or engage in a profession and continue to live abroad, and citizens of Sri Lanka who have made their permanent place of abode outside Sri Lanka, are exempted from all exchange control restrictions applicable to non-resident investment provided that they remit foreign exchange earnings for investment through a Rupee Account for Non-resident Sri Lankan Investment (RANSI). Funds channeled through this account may be invested in shares, government securities, debentures, units in Unit Trusts and in real assets such as land and building. (The exclusions and restrictions applicable to non-resident investment in terms of the Gazette Notification 1232/14 of 19.04.2002 do not apply for investments under the RANSI Scheme). Payments for investment under the scheme have to be made by bank drafts purchased out of funds in a RANSI account. All income from investments such as interest, dividends, profits and rental income could be credited to the RANSI account. Funds realised on the sale and liquidation of investment could also be credited to the RANSI account. There are no exchange control restrictions on remittance abroad of funds lying to the credit of a RANSI account. Back to Top