By: Staff Writer
June 22, Colombo (LNW): The Central Bank of Sri Lanka (CBSL) has issued a stern warning to the public regarding a recent surge in advertisements, both in print and social media, promoting overseas property investments targeting resident Sri Lankan individuals.
These promotions not only market foreign real estate opportunities but also claim to provide assistance in securing foreign financing for such ventures—raising serious concerns over their legality.
In a public notice issued this week, the CBSL highlighted that these promotions may mislead Sri Lankans into violating the country’s foreign exchange regulations, which are governed by the Foreign Exchange Act, No. 12 of 2017 (FEA). Under current regulations,
Sri Lankan resident individuals are strictly prohibited from making payments to acquire or invest in immovable property abroad unless such payments are made from a Personal Foreign Currency Account (PFCA) and are limited to USD 20,000 per individual per annum or the equivalent in any other designated foreign currency.
Furthermore, the Central Bank emphasized that Business Foreign Currency Accounts (BFCAs) held by resident entities or individuals cannot be used for such overseas property transactions under any circumstance. Importantly, the CBSL also warned that resident individuals are not allowed to obtain foreign loans or raise financing from non-residents, including banks or other financial institutions, for any purpose—particularly for investing in real estate abroad.
“The public is strongly advised not to be misled by these advertisements, which not only promote unauthorized overseas investments but also encourage financial practices that are in direct violation of national law,” a CBSL official stated. “Any individual or entity found to be engaged in, or facilitating, such unauthorized transactions will be subject to legal action under the provisions of the Foreign Exchange Act.”
This alert comes at a time when many Sri Lankans are seeking more secure or lucrative investment options overseas amid domestic economic uncertainty. Real estate markets in countries such as the UAE, UK, Australia, and even Southeast Asia have been aggressively marketed to Sri Lankans through seminars, influencer promotions, and paid social media advertisements. Some of these campaigns promise “zero down-payment” financing, “easy loan options,” and “citizenship via property investment” schemes, further luring unsuspecting individuals into potentially unlawful financial dealings.
CBSL reiterated its commitment to safeguarding the country’s foreign exchange reserves and legal financial channels. The Bank also urged the public to verify the legality of any overseas investment opportunity with relevant authorities before committing funds or entering into financial arrangements.
The CBSL’s latest warning serves as a crucial reminder of the legal and financial risks associated with engaging in unauthorized cross-border investments.
