The Central Bank of Sri Lanka on 2nd April 2020, and following that, time to time, took measures to restrict outward remittances with the view of preserving foreign currency in Sri Lanka.

 

By way of Extra Ordinary Gazette No. 2338/40 dated 28th June 2023, the Central Bank of Sri Lanka has taken measures to liberalise the below mentioned restrictions which were in place with effect from 28th June 2023 to facilitate international transactions.

 

A summary of such liberalization is as follows:

 

  • Earlier, the controls included limitations with regard to first time repatriation of funds through a Capital Transaction Rupee Account by emigrants up to USD 30,000. Subsequently, there were further limitations introduced to restrict any follow up claims up to USD 10,000. Following the liberalization, the first claim of migration allowance is increased up to a maximum of USD 50,000 and any subsequent migration allowance remittance is increased up to a maximum of USD 20,000.
  • The liberalisation has also allowed to outward remit funds (a) to set up overseas offices of companies incorporated in Sri Lanka up to a maximum limit of USD 100,000 and (b) on capital transactions through a Business Foreign Currency Account held by a resident in Sri Lanka for the purpose of expanding core businesses overseas up to a maximum of USD 100,000.
  • It also has increased the cap applicable for outward remittance of funds from USD 15,000 to a maximum of USD 30,000 to meet working capital for any overseas subsidiaries or branch offices of companies incorporated in Sri Lanka.
  • Following the relaxation of the capital control rules, companies listed in the Colombo Stock Exchange (CSE) and companies not listed in CSE are allowed to make a maximum outward remittance of USD 200,000 or USD 100,000, respectively, for the purpose of investing in ordinary shares of companies incorporated outside Sri Lanka to expand their core businesses.
  • The suspension in place in relation to outward remittance to overseas parent company by its subsidiary company in Sri Lanka for the purpose of investing in employee share option schemes or plans have been removed.

 

The foreign currency stated above is either in USD or in an equivalent in other designated foreign currency.

 

Further information in this regard can be found on https://www.dfe.lk/web/index.php?option=com_rdevelopment&task=allgazettes&Itemid=483&lang=en

 

Samanthi Lakmali Dias

Foreign Legal Advisor – Sri Lanka