New Forex regulations were recently issued by the Central Bank of Sri Lanka [CBSL]. Policy measures have been in effect since the 22nd of March 2021.
Accordingly the CBSL announced that revisions had been made under the Foreign Exchange Act, No. 12 of 2017 (FEA), for greater efficiency and improvement with regards to foreign exchange transactions.
- Removing the compulsory requirement of opening Inward Investment Accounts (IIAs) by the foreign investors/lenders when granting loans to those living in Sri Lanka: including to Government and State-owned enterprises.
- Permission given for companies registered in Sri Lanka to borrow from their parent companies, located outside Sri Lanka.
- Permission for non-resident investors to invest in shares or debt securities of companies not incorporated in Sri Lanka and listed in Colombo Stock Exchange.
- An account titled ‘Emigrant’s Remittable Income Account’ (supplementary account),to repatriate current income of emigrants.
- Introduction of the ‘External Commercial Borrowing Account’, to enable foreign exchange borrowings for overseas individuals living in Sri Lanka.
- Introducing three new eligible resident investor categories as to, listed entities or non-listed entities, (established under any other written laws in Sri Lanka) and sole proprietorships.
- Permitting the deposit of unutilised foreign currency, acquired as travel allowance into new or existing Personal Foreign Currency Accounts.
- Allowing emigrants to invest in Sri Lanka, using the funds held in Non-Resident Rupee Accounts and Capital Transaction Rupee Accounts.
- Permission for Sri Lankans employed outside Sri Lanka (other than emigrants) to open and maintain rupee accounts for crediting funds generated in rupees and for local disbursements.