SRI LANKA announced higher returns and residence visas, with immediate effect, for foreigners who invest funds of at least US$300,000, in a move to ease pressure on the island nation’s rupee currency.
The rupee fell around four percent last year against the US dollar, squeezed by higher imports and foreign investors’ scramble out of government securities. That followed the previous year’s depreciation of nearly 10 percent.
“Older people like to spend time in Sri Lanka,” Finance Minister Ravi Karunanayake told reporters in the capital, Colombo. “If they can invest US$300,000 in Sri Lanka we can offer them resident visas for two to three years.
“If this can be increased to US$1.5 million, then we can extend the duration. Our main idea is to build non-debt-creating reserves.”
The investments would boost the country’s foreign reserves and help cut reliance on foreign debt, Karunanayake added.
Foreigners can invest in stocks, government securities or bank deposits, he said, benefiting from interest rates of around two percent to three percent on funds invested in Sri Lanka, compared to rates of around 0.5 percent in other countries.
Sri Lanka is still recovering from a debt and balance-of-payments crisis last year, but it has adopted economic reforms in line with conditions set by the International Monetary Fund for extending a US$1.5-billion three-year loan.
It is also preparing to scrap tough foreign exchange controls. – Reuters