Exchange Control regulations govern transactions involving non-residents in Sri Lanka, particularly in property transfers and remittances.
Key Requirements:
1. Controller of Exchange Consent
•Required for transferring property to or from a non-resident.
•Consent is needed for:
•Proceeding with the sale of property to a non-resident.
•Remitting proceeds of the sale by the non-resident out of Sri Lanka.
2. General Permission for Sri Lankan Residents
•Sri Lankan residents can make payments to non-residents of Sri Lankan origin for real estate purchases without requiring additional approval.
•However, non-residents must still obtain consent to remit sale proceeds abroad.
3. Remittance Limitations for Non-Residents
•If a non-resident sells property, remittance of proceeds is limited to the amount brought into Sri Lanka as inward remittances during the original purchase.
•Full proceeds are not remittable without specific permissions.
4. Remittance for Sri Lankan Emigrants
•Initial remittance limit: USD 150,000 (LKR 20 million).
•Annual subsequent remittance: USD 20,000 (LKR 2.7 million), with consent from the Controller of Exchange.
Practical Implications:
•Non-residents and emigrants must carefully document inward remittances related to property purchases to ensure smooth repatriation later.
•Buyers and sellers should consult financial and legal advisors to comply with the Exchange Control Act and avoid delays in transactions.
These rules highlight the importance of maintaining compliance with Sri Lanka’s Exchange Control laws for all property and financial transactions involving non-residents.
