The Central Bank of Sri Lanka (CBSL) has issued a strong public warning against advertisements promoting overseas property investments, warning that many of these campaigns mislead Sri Lankan residents into engaging in unauthorized foreign exchange transactions.
Issuing a statement on Friday, the CBSL said it had observed a growing number of advertisements, both in print and on social media, encouraging Sri Lankan resident individuals to invest in immovable properties abroad. Some of these promotions even offer guidance on securing foreign financing for such ventures.
However, the CBSL has clarified that such investments are tightly regulated under the provisions of the Foreign Exchange Act, No. 12 of 2017 (FEA), and most of these advertised opportunities are in direct violation of the law.
According to the CBSL, resident individuals are only allowed to invest in overseas properties using funds from their Personal Foreign Currency Accounts (PFCAs), with a strict annual limit of USD 20,000 or its equivalent in other designated foreign currencies.
CBSL emphasized that payments for overseas property investments cannot be made from Business Foreign Currency Accounts (BFCAs) held by either individuals or entities.
Furthermore, resident individuals are not permitted to obtain foreign loans or raise financing from non-residents for any purpose, including real estate purchases abroad.
“In the above circumstances, CBSL strongly advises the public not to be misled by such advertisements promoting overseas property investments and offering guidance on obtaining foreign financing,” the statement read.
The Central Bank also warned that legal action will be taken under the FEA against any individuals or entities involved in, or facilitating, unauthorized foreign exchange transactions.
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