Written By: Jacquelyn Annete García Vadnais
Even though Sri Lanka was not on the radar for real estate investors previously, it has become more popular due to the country’s incredible beauty and government incentive to attract foreign direct investment. With new legislation that is targeting the ease for foreign citizens to acquire property, it is no wonder that Sri Lanka is absolutely a locale to keep one’s eye on. This is particularly true for Colombo, the country’s growing capital city that is attracting more multinational business daily. In order to adequately consider Colombo, Sri Lanka as a viable real estate investment opportunity, consider the information below.
A Brief History of Sri Lanka
The first traces of humans in Sri Lanka can be traced from the year 543 BC. Many religious legends originate in Sri Lanka to include Adam’s Peak, which is believed to be where Adam first set foot on earth when he was banished from heaven and that Lord Buddha put his footprint on Sri Pada when he made his final visit to the island. What is very special about Sri Lanka’s history is that it has experienced many different colonial influences, which have greatly impacted Sri Lanka’s culture, architecture, and overall lifestyle. Sri Lanka was colonized by the Portuguese in the 1500’s, which led to trading spices such as cinnamon to Europe. Sri Lanka was also colonized by the Dutch in the 1600’s. In the early 1800’s the British won the territory from the Dutch in the wake of the French Revolution changing the spheres of power in Europe. As a result of the British, Sri Lanka began to have success organizing and trading products such as: coffee and coconuts.
Modern day Sri Lanka is a culturally diverse society. Known as the oldest democracy in Asia, it has a majority Buddhist community, followed by Hinduism, Islam, and Christianity as the main religious traditions, as well as various ethnic communities. This varied grouping of traditions and historical events has birthed a wholly unique, vibrant, and pleasing culture of architecture, food, and arts that is a benefit to tourists as well long term visitors, and residents. It is worth noting however, that there historically has been communal unrest, which in some cases persists even until the present day.
Factors to Consider When Investing in Colombo, Sri Lanka
High Level of English
One major appeal of investing in Sri Lanka is the very high level of English. Since Sri Lanka was a former British colony, English is still taught in many schools and is widely spoken around the country. This makes traditional day-to-day interactions along with business dealings simplified compared with other emerging markets in the world.
Potential Rental Yields
The potential for rental yields and also gains acquired upon selling one’s property for a higher price are absolutely possible in Sri Lanka, particularly Colombo. What makes this possible is that the luxury real estate market is said that up to 5,000 luxury rental properties will be added to Sri Lanka’s high-end property market by 2020. The reason for this is attributed to the high net worth of Sri Lankan citizens and the wealthy Sri Lankan expats who are looking to invest in their home country. Lastly, the rental yields are promising due to the increased job creation in Colombo that will bring in more multinational firms looking to capitalize on Sri Lanka’s fundamental link to Dubai and Singapore, which will result in a demand for luxury condo or apartment owners in terms of rental yields.
Upcoming Predictions for Economic Growth
Now that Sri Lanka has been classified as a Middle Income Country by the IMF, there is a great spike in economic growth that allows for large development projects to commence. One such development is the Colombo International Financial City (CIFC) that is a metropolis that will create a new financial zone that is set to bridge the gap between Dubai and Singapore. This project alone will have $13 billion of investments and create at least 83,000 jobs over the next 30 years. In terms of real estate investment, these professionals will need either places to rent in Colombo or places to buy at a premium.
Affordable Standard of Living
While Sri Lanka is progressing substantially, it still has a very low cost of living for foreign real estate investors to enjoy. In addition, for those investors that do decide to invest in Colombo, it is possible to get around the island affordably to take advantage of some of the spectacular resorts for a fraction of the price than other parts of the world. In essence, prospective investors will get a higher quality of life for their money in Sri Lanka.
Recent Favorable Policies Regarding Foreign Direct Investment
The Sri Lankan government has made major reforms this year that are targeted at making the market for attractive to foreign direct investment. One of these reforms was to allow foreign citizens to purchase freehold property in condominium developments without limiting them to buying on the fourth floor or above.
Potential for Residence Visa for Foreign Investors
The Sri Lankan government has also made it possible for Sri Lankan expats and their children who are not citizens to purchase rental property legally. Additionally, it is now possible for business owners to reside legally within Sri Lanka while conducting their business activities within the country. Lastly, for those that are over 55 years old have the option to have a special two-year renewable visa with showing a deposit of $15,000 USD and remit $1,500 USD per month for their cost of living.
Concluding Remarks and Outlook for the Coming Years
Even though Sri Lanka was not on the radar for real estate investors previously, it has become more popular due to the country’s incredible beauty and government incentive to attract foreign direct investment. With new legislation that is targeting the ease for foreign citizens to acquire property, it is no wonder that Sri Lanka is absolutely a locale to keep one’s eye on. This is particularly true for Colombo, the country’s growing capital city that is attracting more multinational business daily. In order to adequately consider Colombo, Sri Lanka as a viable real estate investment opportunity, consider the information below.
A Brief History of Sri Lanka
The first traces of humans in Sri Lanka can be traced from the year 543 BC. Many religious legends originate in Sri Lanka to include Adam’s Peak, which is believed to be where Adam first set foot on earth when he was banished from heaven and that Lord Buddha put his footprint on Sri Pada when he made his final visit to the island. What is very special about Sri Lanka’s history is that it has experienced many different colonial influences, which have greatly impacted Sri Lanka’s culture, architecture, and overall lifestyle. Sri Lanka was colonized by the Portuguese in the 1500’s, which led to trading spices such as cinnamon to Europe. Sri Lanka was also colonized by the Dutch in the 1600’s. In the early 1800’s the British won the territory from the Dutch in the wake of the French Revolution changing the spheres of power in Europe. As a result of the British, Sri Lanka began to have success organizing and trading products such as: coffee and coconuts.
Modern day Sri Lanka is a culturally diverse society. Known as the oldest democracy in Asia, it has a majority Buddhist community, followed by Hinduism, Islam, and Christianity as the main religious traditions, as well as various ethnic communities. This varied grouping of traditions and historical events has birthed a wholly unique, vibrant, and pleasing culture of architecture, food, and arts that is a benefit to tourists as well long term visitors, and residents. It is worth noting however, that there historically has been communal unrest, which in some cases persists even until the present day.
Factors to Consider When Investing in Colombo, Sri Lanka
High Level of English
One major appeal of investing in Sri Lanka is the very high level of English. Since Sri Lanka was a former British colony, English is still taught in many schools and is widely spoken around the country. This makes traditional day-to-day interactions along with business dealings simplified compared with other emerging markets in the world.
Potential Rental Yields
The potential for rental yields and also gains acquired upon selling one’s property for a higher price are absolutely possible in Sri Lanka, particularly Colombo. What makes this possible is that the luxury real estate market is said that up to 5,000 luxury rental properties will be added to Sri Lanka’s high-end property market by 2020. The reason for this is attributed to the high net worth of Sri Lankan citizens and the wealthy Sri Lankan expats who are looking to invest in their home country. Lastly, the rental yields are promising due to the increased job creation in Colombo that will bring in more multinational firms looking to capitalize on Sri Lanka’s fundamental link to Dubai and Singapore, which will result in a demand for luxury condo or apartment owners in terms of rental yields.
Upcoming Predictions for Economic Growth
Now that Sri Lanka has been classified as a Middle Income Country by the IMF, there is a great spike in economic growth that allows for large development projects to commence. One such development is the Colombo International Financial City (CIFC) that is a metropolis that will create a new financial zone that is set to bridge the gap between Dubai and Singapore. This project alone will have $13 billion of investments and create at least 83,000 jobs over the next 30 years. In terms of real estate investment, these professionals will need either places to rent in Colombo or places to buy at a premium.
Affordable Standard of Living
While Sri Lanka is progressing substantially, it still has a very low cost of living for foreign real estate investors to enjoy. In addition, for those investors that do decide to invest in Colombo, it is possible to get around the island affordably to take advantage of some of the spectacular resorts for a fraction of the price than other parts of the world. In essence, prospective investors will get a higher quality of life for their money in Sri Lanka.
Recent Favorable Policies Regarding Foreign Direct Investment
The Sri Lankan government has made major reforms this year that are targeted at making the market for attractive to foreign direct investment. One of these reforms was to allow foreign citizens to purchase freehold property in condominium developments without limiting them to buying on the fourth floor or above.
Potential for Residence Visa for Foreign Investors
The Sri Lankan government has also made it possible for Sri Lankan expats and their children who are not citizens to purchase rental property legally. Additionally, it is now possible for business owners to reside legally within Sri Lanka while conducting their business activities within the country. Lastly, for those that are over 55 years old have the option to have a special two-year renewable visa with showing a deposit of $15,000 USD and remit $1,500 USD per month for their cost of living.
Concluding Remarks and Outlook for the Coming Years
Sri Lanka is in a defining moment in its economic development. Now that the government is taking active steps to bolster the economy through foreign direct investment, there are many opportunities to take advantage for both foreigners and citizens alike to invest, but to do so with security. It will be incredible to see Sri Lanka’s progress in the coming years, particularly Colombo, which will likely see an enormous spike in foreign direct investment and job creation from both domestic and prestigious multinational firms. Those who do decide to invest in Colombo, Sri Lanka will have the advantage of being in a cosmopolitan city that also has access to some of the most picturesque beaches and spectacular resorts in the world.
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Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting.
Jacquelyn has a JD/MBA from Suffolk University, and LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
Jacquelyn has a JD/MBA from Suffolk University, and LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
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