Yes, foreigners can buy land or property in Sri Lanka. However, the process is not straight forward, and you need to know about the rules and regulations that apply.
I will go through this in details in this article.
How to buy land in Sri Lanka:
You will find this video helpful to explain how you as a foreigner can buy land in Sri Lanka:
How foreigners can buy property in Sri Lanka?
- The easiest is to buy apartment, which can directly go under your name.
- To buy a land (with or without a house on it) the process is a bit different. I will explain it in details.
The process to buy land in Sri Lanka:
So, let´s say you found a beautiful beach property listed for sale.
You start to day dream about buying it and moving to Sri Lanka. What do you have to do?
As you are not a Sri Lankan citizen, you can not buy the land directly under your name.
You have to start a a private limited company in Sri Lanka. For this company you as a foreigner can only own up to 49% of the shares. A local partner need to (on paper) own minimum 51% of the shares.
I theory, this local partner can be anyone.
But please be careful.
Never ever trust this to somebody you don´t have 100% trust in! ANd definitely not to some random person you meet in Sri Lanka.. There are several examples of foreigners being ripped off by their local partner!
I would definitely recommend doing this through a professional agency. Alternatively, with a relative or someone you can trust completely.
Secure your investment!
The next step of the recommended process is to start a holding company in Sri Lanka. In this company you /the foreigner – can own 100%.
The Holding company can then lease the other company for up to 99 years.
By doing this you actually get full control of your land. You can sell the land, with or without the company. And most important the local partner, can not interfere with this
I do understand that this process seems a bit strange for most people. But at the moment this is the only way you can buy a land right now.
The taxes and costs that apply when buying land in Sri Lanka:
Stamp Duty: 3% stamp duty on the first LKR 100.000. Then 4% thereafter.
The lawyer that prepares the documents for sale usually charge around 2 – 3 %
For an investment of land in Sri Lanka, you will also have to pay Capital Gains Tax. You might also pay tax to your country of residence if you move out from Sri Lanka. These rules are a bit complicated, so please discuss this with you lawyer.
To find the perfect property to buy:
It is definitely best to come to Sri Lanka as a tourist first.
You will find updated information about HOW TO TRAVEL TO SRI LANKA IN 2021, in this post – LINK:
Then you need to look at the different areas of the country to see where you would prefer to live.
Many people are dreaming of a beach property. Please be aware that these lands are really expensive. You will get a much better deal by looking inland.
Some people also prefer the capital, Colombo – or the mountain areas in the high land of Sri Lanka.
Find 5 reasons to consider Hikkaduwa as your dream destination in this blog post – LINK.
Do you want more information about properties in Sri Lanka?
Are you interested in buying property among the beautiful southern coast of Sri Lanka?
Then I would definitely recommend RE/MAX southern properties – LINK. They are a reputable, trustworthy agency that can help you with the whole process of setting up companies and buying the land. They have a team of professional realtors, lawyers and accountants.
Please contact Alex, to hear more about properties for sale NOW, the prices and more details on the process.