FDI inflows from new projects increase by 13% in Sri Lanka
The Morning: Sri Lanka’s Foreign Direct Investments (FDIs) on new projects, aside from project expansions and capital infusions, increased by 13% last year (2025) according to data collected by the Board of Investment of Sri Lanka (BOI).
In total, 188 companies infused FDI during last year, of which 24 were new investment projects that contracted with the BOI during the year. These new projects contributed $ 134 million, accounting for 13% of total FDI inflows for the year: an increase from the 2-10% norm of FDI inflows from projects within the year, while the remaining $ 923 million originated from project expansions and capital infusion into existing operations.
FDI inflows for the year in total reached $ 1,057 million, representing a 72% overall increase compared to 2024. Updated data gathered from BOI approved companies denotes that $ 1,057 million FDI inflow comprises $ 167 million in equity capital, $ 213 million in re-investments, $ 567 million in intra-company borrowings and $ 110 million in foreign commercial borrowings.
The manufacturing sector contributed 46% of FDI inflow followed by 26% by the Port Development sector and 11% by the Tourism sector. Singapore, India, France, Netherlands and Luxembourg have been recorded as the top five FDI sourced countries.
In addition, during last year, BOI approval was granted for 146 investment projects with a total investment value of $ 1,906 million, which includes 70 new projects and 76 expansion projects. Of the total approved investments, $ 896 million is expected to flow in as foreign capital, providing strong momentum toward achieving the FDI target of $ 1.5 billion set for the year 2026.
OSL take:
The increasing FDI inflows to the country indicate the growth and business potential in Sri Lanka as well as the growing confidence among foreign businesses/investors in the country’s economic strength and resilience. Sri Lanka’s economic resilience to external and internal challenges through the years and the quick turn around from the unprecedented economic crisis faced by the country in 2022, have all helped boost Sri Lanka’s image as an emerging business destination in the South Asian region. Now with the country’s economy on an expansion path with expanding business/investment opportunities, foreign businesses/investors are presented with lucrative opportunities. With Sri Lanka on a path to becoming a hub in the South Asian region, businesses/investments in Sri Lanka would guarantee quick returns on investments (ROIs). Given these developments, foreign businesses/investors could look at expanding operations through local collaborations while also setting up bases in Sri Lanka to engage with other countries in the region using the strong trade ties and preferential treatment enjoyed by Sri Lanka with these countries.
| Article Code : | VBS/AT/20260205/Z_2 |