While US companies are interested in Sri Lanka’s ICT, energy, aviation, and defense sectors, the United States has warned that regulatory uncertainty, excessive or unnecessary laws, and gaps in transparency are discouraging investment in the country.
The US State Department’s 2025 Investment Climate Statement on Sri Lanka, released this week, highlights that the country’s economy holds promise but faces systemic barriers.
The report notes that abrupt policy changes, opaque procurement practices, and approval delays frustrate investors and undermine confidence in the stability of the investment environment.
Although Sri Lanka has announced plans to attract foreign capital through reforms under its IMF program, the US report points to the slow pace of progress. High-profile energy projects have stalled over tariff issues, while complex licensing procedures and inconsistent enforcement in aviation and defense sectors have contributed to investment delays.
The assessment concludes that without greater transparency, streamlined processes, and consistent rules, Sri Lanka is at a critical juncture in its economic recovery. Strengthening US business ties and investment flows remains uncertain.
