Sri Lanka foreign investments reached US$827 million during the first nine months of 2025, reflecting a powerful 138% year-on-year surge driven by large-scale projects in ports, manufacturing, and gaming. The growth highlights renewed investor trust amid strong economic reforms.
Sri Lanka foreign investments rise sharply as reforms and stability boost investor confidence
Foreign capital continued to flow into Sri Lanka at a rapid pace throughout the first nine months of 2025, with total inflows reaching US$827 million, according to the Board of Investment (BOI). The figure represents a remarkable 138% increase compared to the same period in 2024, signaling a strong rebound in investor confidence and a clear endorsement of the country’s improving economic and political climate.
The BOI said the inflows included equity, reinvested earnings, intra-company loans, and long-term foreign commercial borrowings, reflecting both new investor enthusiasm and continued reinvestment by established enterprises. Of the total inflows, US$124 million came from new project agreements signed in 2025, while the remainder was derived from expansions and reinvestments by existing investors. Local capital also played a vital role, contributing US$326 million across 163 BOI projects during the same period.
BOI Chairman Arjuna Herath attributed the strong performance to increased investor trust in Sri Lanka’s governance and stability. “The growth of foreign capital inflows demonstrates the renewed confidence that investors have in Sri Lanka’s business environment. The strong participation of existing enterprises reflects the trust built through economic and political stability, transparency, and good governance,” Herath said.
He added that the surge underscores the success of reforms and ease-of-doing-business initiatives introduced by the government and the BOI, which have made Sri Lanka an increasingly competitive destination for both regional and global investors.
Major Projects Lead the Growth Momentum
Large-scale investments dominated the inflows, led by several high-profile projects that have reshaped Sri Lanka’s industrial and infrastructure landscape. Colombo West International Terminal (Pvt.) Ltd topped the list with a US$229 million investment in advanced port infrastructure under a strategic development agreement. The project is set to expand the Port of Colombo’s capacity by 3.2 million TEUs, strengthening its position as one of South Asia’s key maritime hubs.
In the manufacturing sector, CEAT OHT Lanka (Pvt.) Ltd, a subsidiary of India’s CEAT Ltd, invested US$111 million to establish a state-of-the-art facility to produce off-the-highway tyres for export. Michelin Lanka (Pvt.) Ltd also reinvested US$72 million to expand its operations, while Bluehaven Services (Pvt.) Ltd, part of Melco Resorts and Entertainment Ltd, injected US$85 million into gaming facilities at the City of Dreams Sri Lanka integrated resort project.
A major BOI-approved property development project added US$47 million, while 150 other BOI-registered companies collectively contributed US$283 million, demonstrating broad-based investor participation across manufacturing, infrastructure, and services sectors.
“These projects not only bring capital but also create employment, transfer advanced technologies, and integrate Sri Lanka more deeply into global value chains,” Herath noted, emphasizing the long-term economic impact of sustained FDI growth.
Expanding the Investment Base
Between January and September 2025, the BOI approved 104 new and expansion projects valued at US$1.06 billion. The investment portfolio was nearly balanced between foreign (US$540 million) and local (US$520 million) capital.
These projects span multiple growth-oriented industries, including rubber product manufacturing, solar energy, cement processing, dairy production, medicinal crop-based exports, petroleum refining, information and communication technology (ICT), and advanced manufacturing.
The strong performance reflects the government’s continued focus on diversifying Sri Lanka’s investment base, promoting export-oriented industries, and strengthening infrastructure to attract sustainable and high-value projects.
Outlook for 2025 and Beyond
With several new investment proposals already in the pipeline, the BOI expects total foreign inflows for 2025 — including long-term foreign commercial loans — to exceed US$1 billion. This projection marks a key milestone in Sri Lanka’s post-crisis economic recovery and its repositioning as a resilient and reform-driven investment destination in Asia.
The Board of Investment reiterated its commitment to improving the business climate through faster approvals, enhanced investor protection, and targeted incentives for strategic sectors. Officials said these measures aim to make Sri Lanka a competitive, transparent, and sustainable hub for international investment, connecting global markets with emerging regional opportunities.
As economic stability continues to take hold and reforms progress, Sri Lanka’s foreign investments are expected to play a pivotal role in driving long-term growth, creating skilled employment, and positioning the nation as a critical player in global supply networks.