Payments through OIAs for overseas investment suspended for 3 months

Payments through OIAs for overseas investment suspended for 3 months

April 6, 2020   08:23 pm

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The government has taken steps to suspend Sri Lankan residents from making payments through Outdraw Investment Accounts (OIA) for overseas investments for a period of three months.

Prime Minister Mahinda Rajapaksa, in his capacity as the Minister of Finance, Economic and Policy Development, has made this Order under the Foreign Exchange Act, No. 12 of 2017.

The Order suspends any outward remittances other than the remittances on current transactions through Business Foreign Currency Accounts or Personal Foreign Currency Accounts held by persons resident in Sri Lanka and the repatriation of funds under the migration allowance through Capital Transactions Rupee Accounts by the emigrants who have already claimed migration allowance under the general permission stated in the Schedule IV of the Foreign Exchange (Capital Transactions in Foreign Exchange carried on by Authorized Dealers) Regulations No. 1 of 2017 published in the Extraordinary Gazette Notification No. 2045/56 dated November 17, 2017.

The Order also limits the eligible migration allowance for emigrants who are claiming the migration allowance for the first time up to a maximum of $ 30,000.

The Monetary Board will have the authority to grant permission in terms of the Section 7(10) of the Foreign Exchange Act for the investments on case by case basis which exceeds the limits specified in the general permission granted in the Schedule I of the Foreign Exchange (Capital Transactions in Foreign Exchange carried on by Authorised Dealers) Regulations provided that the proposed investment is to be financed out of a foreign currency loan obtained by the investor from a person resident outside Sri Lanka under the provisions of the Foreign Exchange Act, or the proposed investment is to be made to fulfil the regulatory requirement in that country.

The Order excludes investments to be financed out of a foreign currency loan obtained by the investor from a person resident outside Sri Lanka under the provisions of the Foreign Exchange Act, or investments to be made to fulfil the regulatory requirement in that country provided that, the Head of Department of Foreign Exchange is satisfied with the fulfilment of such requirement.

This order is valid for a period of three months from April 2, 2020.

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