CoPF eases outward investment rules, tightens SOE borrowing under new reforms

IN a bid to promote cross-border expansion of Sri Lankan enterprises, the Committee on Public Finance (CoPF) has approved updated guidelines on outward investments, raising investment thresholds and simplifying processes for local companies to venture overseas.

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At the time, the Committee imposed tighter controls on State-owned enterprises (SOEs) borrowing under the Public Debt Management Act, indicating a push for stronger fiscal discipline.

The new regulations, formalised under Section 22 of the Foreign Exchange Act, No. 12 of 2017 and published via Gazette Extraordinary No. 2441/14 of 18 June 2025, were approved at the Committee's meeting on 29 July chaired by MP Dr. Harsha de Silva.

Under the revised framework, listed companies are now permitted to invest up to $750,000 abroad, up from the $500,000 threshold earlier, whilst unlisted companies may invest up to $200,000, up from the previous $150,000 cap. Companies wishing to invest beyond these limits can now borrow up to $2 million from foreign sources, subject to Central Bank of Sri Lanka (CBSL) oversight, while investments exceeding $2 million will require special regulatory approval.