Sri Lanka FDI surged to $787 million in the first nine months of 2025, driven by new and expansion projects under the Board of Investment (BOI), with Singapore securing five new initiatives, according to official data.
Sri Lanka FDI soars with Singapore leading new project approvals in 2025
Sri Lanka’s foreign investment landscape has shown notable growth in 2025, with foreign direct investment (FDI) inflows totaling $787 million during the first nine months of the year. The data, compiled by the Board of Investment (BOI), includes foreign loans by BOI-registered companies and highlights the resilience of Sri Lanka’s investment climate amid global uncertainties.
Of the total FDI, $121.8 million originated from newly approved projects, while $665.2 million was generated by existing companies already registered under the BOI. The inflows encompass foreign equity, reinvested earnings, intra-company loans, and commercial loans from foreign entities, although the BOI did not provide a detailed breakdown for each category.
During this period, the BOI approved 55 new foreign investment projects valued at $692.2 million. Additionally, 49 expansion projects for existing BOI-registered companies were sanctioned, collectively amounting to $429.8 million. These approvals are expected to generate approximately 20,000 new employment opportunities when operations commence, marking a significant boost to Sri Lanka’s job market.
Singapore emerged as the leading investor in new projects, securing five approvals. India followed closely with four new initiatives, while China recorded three. This trend reflects the continuing strategic interest of Asian economies in Sri Lanka’s growing market and highlights the country’s potential as a regional investment hub.
FDI remains a crucial component of Sri Lanka’s economic strategy, especially in sectors targeted for export growth, infrastructure development, and technology-driven innovation. The inflows not only bring capital but also facilitate knowledge transfer, technological expertise, and stronger international partnerships, providing a foundation for sustainable economic development.
Despite the positive inflow figures, the BOI faces scrutiny from policymakers and economists, as critics highlight the need for higher foreign investments to accelerate economic recovery. Since President Anura Kumara Dissanayake assumed office in September 2024, some commentators have questioned the pace of FDI growth. However, the BOI’s recent approvals indicate progress and the potential for further foreign investment engagement.
“Sri Lanka’s investment climate continues to attract foreign investors due to policy stability and opportunities across diverse sectors,” said a BOI official. “The projects approved this year reflect strong confidence in the country’s growth potential and the readiness of investors to participate in the economy.”
The distribution of FDI across sectors shows a blend of manufacturing, services, and high-value export-oriented projects. Singapore’s five new investments, for instance, span technology, logistics, and advanced manufacturing. India’s and China’s investments primarily target industrial expansion, infrastructure, and renewable energy solutions, which are aligned with Sri Lanka’s development objectives.
As Sri Lanka works to improve ease of doing business and streamline regulatory frameworks, foreign investors are expected to play a critical role in economic recovery and job creation. The BOI continues to refine incentives, improve transparency, and simplify approval procedures to maintain investor confidence and encourage long-term engagement.
Economists suggest that sustaining this momentum requires proactive policy measures, including fiscal stability, currency management, and targeted sector incentives. If managed strategically, FDI could contribute significantly to gross domestic product (GDP) growth, industrial diversification, and enhanced global competitiveness.
Overall, the $787 million FDI inflow in the first nine months of 2025 underscores Sri Lanka’s potential to attract international capital, generate employment, and stimulate sustainable growth. With continued engagement from Singapore, India, China, and other global partners, the country is poised to strengthen its position as a favorable investment destination in South Asia.