Sri Lanka must become easier to invest in
Prof. Ranjith Bandara, PhD (Qld.,) Emeritus Professor, University of Colombo Investment promotion has been Colombo’s default strategy for two decades. The real barrier to foreign capital was never Sri Lanka’s pitch — it is Sri Lanka’s paperwork and administrative complexity. For more than two decades, investment promotion has been one of Sri Lanka’s key development […]
Sri Lanka must improve its investment climate, according to experts. The island nation has long touted its strategic location, educated workforce and natural resources as major draws for foreign capital. However, the reality is that navigating Sri Lanka's bureaucracy and red tape can be a significant hurdle for potential investors.
Over the past two decades, investment promotion has been a key strategy for Sri Lanka, but the country's administrative complexity and paperwork have been the real barriers to attracting more foreign investment. While there has been some improvement in recent years, with inward FDI rising from US$759 million in 2024 to US$1.04 billion in 2025, the overall figure still represents only a small fraction of Sri Lanka's US$100 billion GDP.
Competing with other nations in the region, such as India, Vietnam and Thailand, Sri Lanka needs to focus not just on attracting more investment, but on attracting quality investment that brings technology, managerial expertise and long-term export capacity. The cumulative friction of small inefficiencies and delays across multiple fronts can make the overall cost of doing business in Sri Lanka higher than in other countries.
Bureaucracy and a lack of clear procedures and predictable timelines are major issues that can discourage investors from choosing Sri Lanka over its competitors. A single-window system, with digital connections between all relevant agencies, could significantly improve investor confidence and attract more quality investment to Sri Lanka.
Written by urgent.news from The Island Sri Lanka's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
