Sri Lanka foreign investments are expected to reach US$1.1 billion in 2025, marking a strong rebound driven by renewed investor confidence, policy reforms, and improved economic stability. The Board of Investment (BOI) reports robust growth across multiple high-value sectors, signaling a resurgence in the country’s investment momentum.
Sri Lanka foreign investments soar as stability and reforms drive record inflows
Sri Lanka is gearing up for a significant inflow of foreign direct investments (FDI) in 2025, with projections reaching US$1.1 billion, including borrowings from new and ongoing projects. According to the Board of Investment (BOI), realized investments have surged by 138% as of September compared to the previous year — a testament to growing investor confidence and favorable market reforms.
Strong Performance Driven by Confidence and Governance
The BOI highlighted that equity inflows totaled US$133 million, while reinvested profits reached US$132 million. Intra-company loans contributed US$231 million, and long-term foreign commercial loans amounted to US$331 million.
BOI Chairman Arjuna Herath emphasized that the robust participation of existing enterprises underscores the trust investors have in the country’s improving economic and political climate. “This performance reflects the progress achieved through transparency, governance reforms, and policy consistency that continue to encourage both new and existing investors,” Herath noted.
He further stated that the combination of structural reforms and ease-of-doing-business measures implemented by the Government and the BOI has been pivotal in sustaining the positive trajectory. The BOI’s proactive engagement with investors and simplification of approval processes have helped position Sri Lanka as a competitive investment hub in South Asia.
Growing Portfolio of Approved Projects
Between January and September 2025, the BOI approved 104 investment projects worth approximately US$1.06 billion, encompassing both local and foreign capital. This includes 48 new projects, 49 expansions, and 7 additional ventures approved under the BOI Law’s sections 16 and 17.
Foreign capital accounted for US$540 million of the total, while local investment contributed around US$520 million, demonstrating balanced participation across domestic and international stakeholders.
Key investment sectors include rubber product manufacturing, solar power generation, mixed-use real estate, medicinal crop-based exports, cement grinding and packing, mining and processing, and dairy manufacturing. These industries are poised to deliver both employment and export growth in the coming fiscal year.
Expansion in Strategic Industries
Several existing enterprises expanded their Sri Lankan operations, reinforcing long-term commitment to the local economy. Notable sectors include telecommunications, training and education, residential development, and industrial manufacturing.
The BOI highlighted that such expansions indicate sustained investor confidence, especially from multinational companies seeking to leverage Sri Lanka’s strategic location, skilled workforce, and improving infrastructure.
Major Investments Powering the Growth
Among the realized investments, Colombo West International Terminal (CWIT) Pvt Ltd led the pack with an investment of US$229 million — a crucial component in modernizing Sri Lanka’s maritime and logistics capabilities.
CEAT OHT Lanka Pvt Ltd, a newly established company, invested US$111 million in tyre manufacturing, positioning Sri Lanka as a growing player in the automotive supply chain.
Meanwhile, Michelin Lanka Pvt Ltd injected an additional US$72 million into its Sri Lankan operations, further consolidating the nation’s position in the global rubber and tire industry.
Bluehaven Services Pvt Ltd, a subsidiary of Melco Resorts and Entertainment Limited (Hong Kong), made a high-profile investment of US$85 million to develop and operate gaming facilities at the City of Dreams Sri Lanka — an integrated luxury resort that underscores the country’s growing appeal in tourism and entertainment.
In addition, a major property development project contributed US$47 million, while over 150 other BOI-registered firms collectively invested US$282 million across diverse sectors.
Outlook for 2026 and Beyond
The momentum in Sri Lanka’s foreign investment growth is expected to continue, supported by strong governance, policy consistency, and efforts to streamline investment approvals. Analysts predict that the government’s focus on sustainable industries — particularly renewable energy, manufacturing, and technology — could drive future FDI beyond current forecasts.
As Sri Lanka enhances its infrastructure and trade linkages, the country stands poised to transform itself into a regional investment gateway, connecting investors to emerging opportunities across Asia and the Indian Ocean region.