Foreign Investment: Conditions

(c) Extracted from sections 4 and 5 of the extraordinary gazette notification No. 1232/14 dated 2002.04.19 published under the exchange control act (chapter 423 of the CLE)

Section 4 - Conditions

  1. A person resident outside Sri Lanka who is a party to a transaction permitted hereunder shall make a declaration to the effect that such person is resident outside Sri Lanka on the share transfer form or share application form as applicable
  2. The payment for shares in any issue or transaction permitted hereunder shall be made only out of or into a Share Investment External Rupee Account opened in a commercial bank of Sri Lanka in accordance with directions given by the Controller of Exchange in that behalf to commercial banks.
  3. A commercial bank, a licensed share broker or any other person entrusted with the payment of capital monies such as sale proceeds of shares, dividends and commissions in respect of any transaction permitted hereunder shall make such payment only into or out of a Share Investment External Rupee Account referred to in subparagraph (b) above
  4. The Secretary/Registrar to a company in which the issue or transfer of shares to persons resident outside Sri Lanka are limited under paragraph 3 shall not register the name of any person resident outside Sri Lanka or a citizen of a foreign state or their nominee as a share holder in such company if by such registration the limits specified in paragraph 3 shall be exceeded.

Section 5 - Fund Transfers

  1. under Section 11 of the Exchange Control Act for the transfer by approved country funds, approved regional funds, corporate bodies incorporated outside Sri Lanka and individuals resident outside Sri Lanka (inclusive of Sri Lankans resident outside Sri Lanka) of shares acquired in terms of paragraph I subject to the conditions stipulated in paragraphs 4(a), 4(b) and 4(c)
  2. under Section 7 of the Exchange Control Act for making any payment to or for the credit of a person resident outside Sri Lanka in respect of a transaction permitted hereunder in accordance with the provisions of paragraph 4(c)