Sri Lankan government clears drafting of new Investment Protection Bill
Daily FT: The Cabinet of Ministers has approved instructing the Legal Draftsman to draft a new Investment Protection Bill, aimed at preventing arbitrary nationalisation of private enterprises and ensuring long-term policy stability for investors.
A proposal first introduced in the 2025 Budget to safeguard private property and strengthen investor confidence is now moving forward, with the Cabinet granting approval to begin drafting the new Investment Security Bill.
The proposed legislation seeks to prevent capricious nationalisation of private properties, including enterprises and assets, while also establishing an Investment Protection Board to provide a structured mechanism for resolving investment-related disputes.
“The new law is intended to enhance policy predictability and create a stable, transparent environment for both domestic and foreign investors,” Cabinet Spokesman Minister Dr. Nalinda Jayatissa said at the post-Cabinet media briefing recently.
He said a committee of officials had previously been appointed to develop a concept paper outlining the framework and objectives of the proposed law. “Based on this concept paper, the Cabinet has now directed the Legal Draftsman to proceed with preparing the draft Bill,” he added.
Dr. Jayatissa said the Government views the new act as a critical step towards strengthening investor protection, improving Sri Lanka’s ease of doing business, and attracting sustainable foreign direct investment in the years ahead. The proposal to this effect was submitted by President Anura Kumara Dissanayake in his capacity as the Finance, Planning and Economic Development Minister.
OSL take:
Sri Lankan authorities are focused on attracting more foreign businesses/investors to the country while promoting the country as an emerging business/investment destination in the region. While Sri Lanka’s strategic positioning in the Indian Ocean, the strong trade ties and the business conducive environment have attracted the attention of foreign businesses/investors to the country, Sri Lanka still has much untapped potential awaiting foreign businesses/investments. Sri Lanka has also been working on improving the ease of doing business environment in the country while presenting many incentives for foreign businesses/investors and it is in such a backdrop that the country is mooting an Investment Protection Bill. All these indicate Sri Lanka’s serious commitment to further increasing the country’s foreign direct investments (FDIs) to the country. Given that Sri Lanka is on a steady path to becoming a hub in the South Asian region with an economy that is on an expansion path resulting in the opening of many business/investment opportunities, foreign businesses/investors could confidently explore the expanding business/investment opportunities covering all key economic sectors in the country. Foreign businesses could also look at setting up bases in Sri Lanka to engage with other countries in the region using the preferential treatment enjoyed by Sri Lanka with them.
| Article Code : | VBS/AT/20251118/Z_2 |