Buying land through a Sri Lankan company as a foreigner

How does the company route work?

A Sri Lankan private company is incorporated with the Registrar of Companies. The company, not you, buys the land on a freehold deed. Because the 2014 Act bars transfers of land title to a company with 50% or more foreign shareholding, the foreign investor holds a minority, for example 49%, and Sri Lankan citizens hold the majority. The company's articles and a shareholders' agreement set out how decisions are made, within what the Companies Act allows.

The 2014 Act counts indirect shareholding too, so layering a foreign holding company above the Sri Lankan company does not help. And the limit lasts 20 years: if the foreign share reaches 50% in that time, the land transfer becomes void unless the shareholding is brought back below 50% within six months.

What are the risks?

• Control. The majority shareholder controls the company. Share classes or side agreements designed to hand control to the minority foreign investor risk being challenged as a way around the Act; get a written opinion from your lawyer.
• Disclosure. Since 30 March 2026, beneficial owners with 10% or more must be disclosed, so the structure is visible to the Registrar.
• Exit. Selling means selling the land (30% capital gains tax at company level) or selling shares, which must keep foreign shareholding under the limit for the rest of the 20 years.
• Running costs. Annual returns, an auditor, a company secretary and tax filings, every year.
• Nominees. A Sri Lankan who holds shares for you on paper only does not make you a lawful owner; we do not list land offered on that basis. See can a foreigner buy land in Sri Lanka.

How do I set up the company?

1. Name approval from the Registrar of Companies.
2. Incorporation with the statutory forms: Form 1 signed by the initial directors, shareholders and secretary, Form 18 (consent of each director) and Form 19 (consent of the secretary), plus the articles.
3. Bank account and IIA. A foreign shareholder brings funds for the shares through an Inward Investment Account so that dividends and sale proceeds can later be remitted abroad. See how to send money to buy property in Sri Lanka.
4. Beneficial ownership filing for every person with 10% or more.
5. Purchase by the company, with the usual title search, survey and stamp duty; see the 8 steps to buy land safely.

Is a company better than a 99-year lease?

For most individual buyers, no. A 99-year lease gives you a registered interest in your own name, with no partner, no annual company costs and no 20-year shareholding test. A company suits investors who genuinely want a Sri Lankan partner, for example in a hotel or a development, and who will run it as a real business.

General information, not legal advice. Laws and rates change; confirm every point with your own Sri Lankan lawyer before you pay a deposit.