Industry Minister Hails $650M FDI in Q1 2025 🇱🇰

⭕ Industry Minister Sunil Handunneththi told Parliament Sri Lanka received $650M in FDI in Q1 2025 — exceeding 2023’s full-year total of $483M and nearing 2024’s $724M.

⭕ The 64 FDI-backed projects in just one quarter also compare sharply with only 93 in all of 2024 — suggesting a major acceleration in investor interest.

⭕ But key detail: many of these may be only agreements signed at this point, not actual funds invested.

⭕ It’s no secret that investors and investment researchers are highly satisfied with the current government’s stable and consistent policy approach, its commitment to the IMF program, and its clean, non-corrupt approach to FDI — stepping away from the more left-leaning rhetoric of the election campaign.

The flip side:

⭕ In 2023 report, The IMF has been extermly critical of the BOI's non-transparent methods, especially in granting tax exemptions with little oversight.

⭕ This led to a structural benchmark requiring the Treasury to publish tax concession data starting early 2024.

⭕ Treasury data shows BOI companies were granted LKR 70B+ in tax breaks just between Jun–Sep 2024 — a massive fiscal cost.

⭕ But this may understate the real benefit firms receive — some are allowed to sell up to 50% of production locally, violating typical BOI export-oriented norms.

⭕ Reports indicate some BOI-registered firms now operate businesses unrelated to their original approval — raising compliance concerns.

⭕ In some cases, original investors have exited, but tax benefits continue through name rentals — licenses leased out while others exploit the exemptions.

⭕ With such irregularities, it’s unclear whether FDI under the BOI is helping 🇱🇰's economy or draining public revenue. A deeper systemic audit must be performed to evaluate the agreements and whether these firms are actually following them. The current BOI enforcement structure is not nearly sufficient enough.

#SriLanka 🇱🇰