Sri Lanka crosses $1 Billion FDI mark in 2025, signals strong investment recovery

Sri Lanka surpassed $1 billion in foreign direct investment (FDI) in 2025, reaching $1.057 billion, marking a major turnaround in investor confidence and economic recovery, the Board of Investment (BOI) announced last week.

The BOI said this figure represents a 72% increase compared to 2024 and reflects renewed global confidence supported by improving macroeconomic stability, clearer policies, and a stronger investment facilitation system.

Manufacturing attracted the largest share of FDI at 46%, followed by port development at 26%, tourism and leisure at 11%, telecommunications at 6%, and property development at 5%. Singapore emerged as the top investor with 30% of total inflows, followed by India at 20%, France at 12%, the Netherlands at 11%, and Luxembourg at 5%.

A total of 189 companies invested in Sri Lanka during 2025. Of these, 26 were new projects that signed agreements with the BOI and brought in $134 million, accounting for 13% of total inflows. This was higher than the usual range of 2% to 10% from new projects. The remaining $923 million came from expansions and reinvestments by existing investors.

The BOI said new investments are a key sign of confidence, as greenfield and first-time projects involve higher risks and longer-term commitments. The entry of new investors in 2025 showed that Sri Lanka has regained credibility as an investment destination. At the same time, reinvestments and expansions reflected strong confidence among existing investors.

Updated data from BOI-approved companies showed that the $1.057 billion inflow consisted of $167 million in equity capital, $213 million in reinvestments, $567 million in intra-company borrowings, and $110 million in foreign commercial borrowings.

During the year, the BOI also approved 146 investment projects worth $1.906 billion, including 70 new projects and 76 expansion projects. Of this total, $896 million is expected to come in as foreign capital, supporting progress toward the $1.5 billion FDI target set for 2026.

The BOI attributed the strong performance to improvements made over the past year, including closer monitoring of projects, faster approvals, and better coordination with ministries and regulators. These steps strengthened confidence across the wider investment environment.

Building on this momentum, the BOI launched its Accelerator Program, supported by a two-year action plan to strengthen institutional capacity, improve investor services, and position the agency as a globally competitive investment body.

With support from the Asian Development Bank, the BOI also developed new policy frameworks for investment promotion, project evaluation, and land allocation. To strengthen human resources, the BOI recruited management trainees, secured approval to fill 88 key vacant positions, and continued staff training. A performance-based bonus scheme has also been approved and is expected to begin in 2026, subject to Cabinet approval.

The BOI further introduced a “Structured Investment Opportunities” initiative, under which 20 projects will be launched in the first phase, supported by a targeted international promotion campaign to attract high-quality and sustainable investors.

Looking ahead, several major projects are in the pipeline for 2026, including the Sinopec oil refinery, as well as investments in cannabis (Thriloka Vijaya Pathra) based manufacturing, spices and areca nut processing, data centres, virtual Special Economic Zones, and capital mobility initiatives for startups and emerging sectors.

With ongoing institutional reforms and a review of the Economic Transformation Act to strengthen the BOI’s mandate, Sri Lanka is well positioned to achieve its $1.5 billion FDI target in 2026, the BOI said.