Business Corruption

According to the US Department of State 2011, foreign investors are permitted to buy land from private sellers, but the government has introduced a 100% transfer tax for foreigners. Companies should be aware that concerns have been raised as to the proper definition of property rights, and although the property registration pertaining to land ownership is said to be quite reliable, the forging of documents and fraud have also been registered.

Political Corruption

According to the Transparency International Sri Lanka Sri Lanka Governance Report 2008, the former President Chandrika Kumaratunga had appropriated a wetland area near Parliament for public purposes, but then decided instead to give the land to a private developer to create a golf course and luxury housing. The Supreme Court ruled that this constituted abuse of power and betrayal of public trust, and the President was fined approximately USD 30,000. This was the first time a former President had been indicted and convicted in Sri Lanka.

According to the Transparency International Global Corruption Report 2008, when the Mahaweli Dam was constructed, corruption was one of the reasons why the government neglected to provide resettled households with compensation, which was otherwise agreed upon with the donors of the project.

Frequency

The World Bank & IFC: Doing Business 2012:
- It takes 8 procedures and 83 days to register property at an average cost of 5.1% of the property value.

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business executives give the protection of property rights in Sri Lanka, including financial assets, a score of 4.5 on a 7-point scale (1 being 'very weak' and 7 'very strong').