Parliament has focused on the practical issues faced by Sri Lankans living abroad when transferring legally acquired assets and money in Sri Lanka. In particular, factors such as frequent changes in regulations, lack of clarity in administrative procedures and, in some cases, blocking of money transfers have been pointed out as causing confusion among Sri Lankans living abroad.
Regarding this matter, Trincomalee District Member of Parliament Katiravelu Shanmugam Kukadasan has addressed the Parliament on 6th October 2026. He has focused on the obstacles faced by Sri Lankans living abroad when trying to transfer legally acquired assets or related funds in their home country.
Many Sri Lankans living abroad own houses, land, bank deposits and other assets in Sri Lanka. Some have made investments in Sri Lanka through income earned from working abroad. And some may have bought property for family. There is no dispute that the transactions related to such assets should be done in accordance with the law. But the main question is whether the procedure should be simple and clear.
A recurring theme in the message is that the ambiguity and frequent changes in regulations can undermine public confidence. Even if a person has earned money legally, if the process of transferring it to property in Sri Lanka is too complicated, he may be reluctant to use official banking channels.
At the same time, preserving the country’s foreign exchange reserves is also an important economic objective for the government. It is therefore not entirely unusual for regulations to be created to restrict the flow of money to or from foreign countries. But the rules should be published in a way that is understandable to the public and there should be a uniform approach among the institutions implementing them.
Foreign investments and 180 day rule
It has also been mentioned in the Parliament regarding the first regulation of 2026. Accordingly, the notification states that there is a restriction on the repatriation of share income and capital income from investments made by Sri Lankan residents abroad to Sri Lanka within a specified period, i.e. within 180 days.
The move is said to be aimed at strengthening the country’s foreign exchange position. Its basic objective is to support the country’s financial system by repatriating the income of Sri Lankans investing abroad into the domestic banking system.
Related to this, the second regulation of 2026 deals with foreign remittances of Sri Lankans living abroad. The Ordinance aims to create a fair, transparent and rules-based system, the parliamentary speech said.
The key here is to strike the right balance between economic constraints and the legal rights of individuals. It is necessary to protect the country’s foreign exchange reserves. Meanwhile, Sri Lankans living abroad should also have the right to manage their earned money and assets according to law.
Another point that was reiterated was the need to protect the country’s foreign exchange reserves from sudden liquidity shocks. Although regulations are needed for that, they should be clearly understood by the public and the banks.
Need to avoid informal remittances
The most important part of this issue is the warning about informal remittances. Parliament has indicated that if there are more administrative barriers to transferring legally earned assets, some may seek ways to remit money outside the official banking system.
This can affect not only individuals but also the country’s economy. When money is transferred through an official bank, the source and destination are clearly recorded. But tracking the movement of money becomes difficult if informal networks are used.
Thus, when solving the problems faced by Sri Lankans living abroad, two aspects need to be considered together. The first is to protect the country’s foreign exchange reserves and financial system. The second is to provide a clear and reliable transfer procedure for legitimate property holders.
Judging by the repeated comments in the news, four aspects of clear rules, sound governance, transparency and confidence in the banking system are at the heart of the issue. The problem persists if there are regulations but people cannot understand them or if the practice varies from case to case.
With a large number of Sri Lankans living abroad, their remittances are also a major factor in the country’s economy. Therefore, financial and property transfer procedures for them should be simple and transparent within the limits of law.
In conclusion, the country’s economic security and the legal rights of Sri Lankans living abroad should not be seen as mutually exclusive. Both can be protected simultaneously if the right regulations, clear guidelines and standard management practices are in place. Increasing confidence in the official banking system and creating an environment that does not allow for informal remittances will be an important next step in this regard.