Govt. slaps ban on sale of private land to foreigners

Friday, 22 February 2013 01:38 - - {{hitsCtrl.values.hits}}

By Uditha Jayasinghe

Expanding on a Budget proposal to prohibit State land from being sold to foreigners, Cabinet yesterday extended the policy to include private land as well, in a move that is likely to impact business sentiments.

However, extensive leasing up to 99 years is still possible. Prohibition of outright transfer of property to foreigners had been decided upon after taking into consideration the increasing demand for foreign investments in Sri Lanka, Cabinet Spokesman and Media Minister Keheliya Rambukwella told media.

He also insisted that these were not entirely new regulations and would not adversely impact the foreign investments seeping into the country.

“We have consistently had a policy of not selling State land outright to foreigners. These new regulations are mostly for private land as we have realised that most land, especially in the southern sea belt, has been purchased by foreigners, which does not bring any income to the country,” he said.

Cabinet approval was granted to make regulations under State Land Ordinance and to introduce amendments to the Notaries Ordinance and Registration of Document Ordinance, he said.

Under the new regulations all foreigners will not be allowed to own land outright in Sri Lanka but can “lease out such lands on long-term lease basis without affecting the economic development activities of the country”. It is also illegal for notaries to sign off on land deals involving outside sale to foreign owners.

Diplomatic land-related issues such as those involving embassies will be exempt from the new regulations.

He acknowledged that availability of land had been pushed up as a priority since the Government began extensive development programs since the end of the war in 2009. “Sri Lanka is a small country so we must look at how we can best utilise our land resources.”

Since the end of the conflict, Sri Lanka’s tourism industry has been booming, with over a million arrivals in 2012. This has prompted Government interest in large-scale hotel investments in scenic locations that have limited land available.

Presenting the 2013 Budget, President Rajapaksa told Parliament: “If any foreign investor forms an equity partnership of at least 30 per cent with local investors, I propose to offer concessions on land leasing. The sale of State land to foreigners will be prohibited.”