Living in Sri Lanka: the ultimate expat guide

Sri Lanka offers multiple visa categories for different purposes, from short tourist stays to long-term residence. The application process is straightforward, with many options available online. Recent 2025 reforms have introduced new permanent residence options and extended tourist visas for eligible nationalities.

Tourist and business entry

Most visitors need an Electronic Travel Authorization (ETA) before arrival. Apply online through the official website or obtain it on arrival at the airport. The initial validity is 30 days, extendable up to 6 months. Fees vary by nationality, with some countries exempt from charges. A 2025 announcement mentioned fee waivers for 40 countries, though parliamentary approval is still pending.

The Business Visa allows 30-day stays with single, double, or multiple entry options. Applications go through embassies or consulates, though online extensions aren't currently available once you're in the country.

Long-term residence options

The Residence Visa suits those planning extended stays. Valid for one year with annual renewal, it costs USD 200 per person annually. Categories include personnel on government-approved projects, Board of Investment (BOI) employees, NGO staff with Defense Ministry endorsement, and participants in the Resident Guest Scheme.

This scheme grants residence through either depositing USD 250,000 in a special account, or for professionals, proving monthly income of USD 2,000 for the main applicant plus USD 1,000 per dependent.

New permanent residence pathway

Sri Lanka announced a new permanent residence visa in February 2025 for people of Sri Lankan origin and their dependents. Costing between USD 400 and USD 1,000 depending on the applicant profile, it provides comprehensive rights including entry, residence, work authorization, inheritance rights, and access to education and healthcare. Implementation dates are yet to be confirmed.

A 5-year tourist visa is also in development for 2025, allowing stays of up to 6 months per visit for 35 eligible countries, restricted to tourism activities only.

Residence visa application process

Obtaining a Residence Visa involves several steps. Before arrival, an authorized representative in Sri Lanka must submit your approval request to the Department of Immigration & Emigration. Once approved, the embassy or consulate issues an Entry Visa valid for 30 days. After arrival, you have 30 days to visit the Department of Immigration & Emigration for official endorsement of your Residence Visa.

Required documents include a passport valid for at least 6 months, employer letter from Sri Lanka, BOI certificate if applicable, police clearance from your country of origin, health protection plan, and work permit from the Ministry of Defense where required. Annual renewals are processed directly through the Department of Immigration & Emigration.

Sri Lanka's job market shows positive momentum with unemployment declining to 3.8% in Q2 2025. The workforce of approximately 8.2 million is distributed across services (47%), industry (26.5%), and agriculture (26.5%). International professionals find opportunities primarily in technology, tourism, and financial services sectors.

Salary landscape and working conditions

Average monthly net salary stands at LKR 65,865 (approximately USD 220), with median salary at LKR 50,000 (approximately USD 167). These figures reflect the local market; positions targeting international professionals typically offer substantially higher compensation, particularly in IT and business services.

The table below shows minimum wage evolution in Sri Lanka:

Source: Ministry of Labour Sri Lanka

Growing sectors for professionals

The information technology sector is experiencing remarkable expansion. IT/ICT revenues jumped from USD 1.089 billion in 2019 to a projected USD 3 billion in 2024. Main hubs are Colombo and Port City Colombo, with high demand for developers, software engineers, and data scientists.

Tourism and hospitality posted impressive growth of 66.1% in the first eight months of 2024. Sector salaries start between LKR 15,000 and 20,000 plus tips, creating opportunities for experienced hospitality management professionals.

The textile and garment industry accounts for 44% of merchandise exports, with over 900 factories serving international brands like Victoria's Secret, Tommy Hilfiger, and Liz Claiborne. Construction is rebounding strongly in 2024 with major infrastructure projects underway.

Financial services and BPO are expanding rapidly, particularly call centers and outsourced services. The renewable energy sector offers prospects with wind, solar, and hydroelectric projects, hydropower currently generating 75% of the country's electricity.

Starting a business in Sri Lanka

Foreign investors can own 100% equity in most sectors. Restrictions apply mainly to passenger aviation, coastal fishing, jewelry production for export, and certain agricultural crops. Foreign ownership is capped at 40% for production of quota-restricted export goods including tea, rubber, coconut, cocoa, rice, sugar, and spices.

The main agency for investment projects is the Board of Investment. The constitution guarantees investment protection and free profit repatriation. Port City Colombo offers particularly attractive incentives with tax exemptions up to 25 years, zero capital controls, and modern infrastructure.

Sri Lanka has signed 28 bilateral investment protection agreements and 44 tax treaties to prevent double taxation. The business environment has improved notably since the 2022 crisis, though some investors still mention high transaction costs and occasionally opaque procedures.

Sri Lanka operates a progressive income tax system with a standard VAT rate. Major reforms implemented in 2025 reduced the tax burden on middle incomes and provided incentives for strategic sectors. The Inland Revenue Department handles tax collection and administration.

Personal income tax structure

The progressive tax system features updated brackets from April 2025. A personal allowance of LKR 1,800,000 (approximately USD 6,000) applies to all residents and non-resident Sri Lankan citizens, exempting lower incomes from taxation.

The 2025 tax brackets are structured as follows:

Source: Inland Revenue Department

Special rates apply to certain income types: maximum 15% for specific gains and repatriated foreign-source income, 45% for betting, gaming, alcohol, and tobacco activities. Export services including IT, BPO, and shipping benefit from a preferential 15% rate from April 2025.

VAT and consumption taxes

The standard VAT rate is 18%. From October 2025, this rate applies to digital services provided by non-residents as well. Certain basic products like local liquid milk and yogurt are exempt from April 2025. Electronic filing became mandatory in July 2025.

Social security contributions

Employers and employees contribute to two mandatory pension funds. The Employees Provident Fund (EPF) requires 8% of gross salary from employees and 12% from employers, totaling 20%. Managed by the Central Bank of Sri Lanka, funds become accessible at age 50 for women and 55 for men.

The Employees Trust Fund (ETF) is funded solely by employers at 3% of gross salary, accessible upon employment termination. Total employer contributions reach 15% of gross salary, while employees contribute 8%. All contributions are tax-deductible.

International tax treaties

Sri Lanka has signed 44 double taxation avoidance agreements with countries worldwide, including the United States and United Kingdom, preventing residents from being taxed twice on the same income. Residents are taxed on worldwide income, while non-residents pay tax only on Sri Lankan-source income. US citizens should note their worldwide income reporting obligations under FATCA regulations apply regardless of Sri Lankan tax residency.

Sri Lanka maintains a dual healthcare system combining free public services with quality private facilities. This structure gives expats flexibility between accessible free care and premium private services at costs well below Western standards.

Free public healthcare system

Public healthcare in Sri Lanka is entirely free for everyone, residents and expats alike. The country operates 555 government hospitals distributed nationwide. Major university hospitals are located in Colombo, Kandy (Peradeniya), Galle (Karapitiya), Anuradhapura, and Jaffna.

Emergency number 110 operates in Colombo, Galle, Kandy, and Jaffna. Despite free care, the public system has some limitations: potentially long wait times, limited medical staff in some rural areas, and medications typically at patient's expense.

Private healthcare facilities

The private sector offers modern infrastructure with English-speaking staff and reduced waiting times. In Colombo, major hospitals include Nawaloka Hospital, Asiri Hospital group (6 facilities), Lanka Hospitals, Durdans Hospital, Oasis Hospital, and Hemas Hospital. The Asiri group also operates facilities in Kandy, Galle, and Matara.

Private care costs remain very affordable compared to Western countries, contributing to growing medical tourism. Sri Lanka attracts international patients for surgical procedures and specialized treatments.

Health insurance for expats

While public healthcare is free, private health insurance is strongly recommended for expats and sometimes required for residence visas. Main local insurers include Ceylinco Health Insurance, Union Assurance, Sri Lanka Insurance Corporation, AIA, Janashakthi, Softlogic Life, and Allianz Sri Lanka.

International insurers like Cigna Global also offer coverage tailored to expats. Private insurance costs remain generally affordable depending on coverage chosen. Government employees benefit from private sector access through the Scheme Agrahara.

Traditional medicine

Ayurveda continues to be practiced in Sri Lanka with recognized teaching institutes affiliated with the universities of Colombo, Kelaniya, and Jaffna. This traditional medicine complements modern healthcare and attracts many visitors interested in natural treatments.

Sri Lanka provides several schooling options for expat families, from the free public system to international schools following globally recognized curricula. With a literacy rate of 92%, the highest in South Asia, education is a national priority.

Local education system

The free public system teaches in Sinhala or Tamil. This option primarily suits families planning long-term settlement and seeking full linguistic integration for their children into Sri Lankan society.

International schools in Colombo

The capital hosts most quality international establishments. The Overseas School of Colombo (OSC), located in Pelawatte, follows the complete International Baccalaureate program (PYP, MYP, DP) from early years through grade 12. Annual fees for 2023-2024 range from USD 12,960 for early years to USD 27,840 for high school. Add non-refundable enrollment fees of USD 2,000 to USD 15,000 depending on grade level, plus an Operational Levy of USD 1,250 per semester.

Colombo International School (CIS) offers the British curriculum with Edexcel IGCSE and A-Levels examinations, similar to UK secondary education standards. The school accepts children aged 2.5 to 18 and operates two campuses: in Colombo 7 (28 Gregory's Road) and Kandy (175 Paranagantota Road, Mawilmada). Fees aren't publicly listed and require direct school contact.

Elizabeth Moir School charges admission fees of LKR 50,000 and a Development Fund ranging from LKR 250,000 to LKR 350,000 depending on grade level. The Gateway College and Lyceum International Schools network operates 10 campuses with over 23,300 students, with estimated annual fees between LKR 1,200,000 and LKR 2,000,000 and enrollment of LKR 150,000 to LKR 300,000.

Education budget planning

International school fees vary considerably: from USD 5,000 to USD 28,000 annually depending on institution and grade level. Enrollment and development fees can reach USD 2,000 to USD 15,000. These amounts represent a significant investment for expat families but often remain lower than rates in other Asian capitals.

Options outside the capital

Outside Colombo, international options are more limited. Kandy hosts a Colombo International School campus, providing an alternative for families settling in the central highlands. For other cities, families typically choose the local system or distance learning.

Sri Lanka's property market offers diverse housing options suited to different budgets and lifestyles. From modern Colombo apartments to colonial villas in Galle and mountain homes in Kandy, each region has distinct characteristics.

Available housing types

Apartments and condominiums dominate urban areas like Colombo, Dehiwala, and Negombo. These residences typically include security services and sometimes amenities like pools or gyms. Independent houses and villas are found in cities and suburbs, offering more space and often a garden. Galle Fort, a UNESCO World Heritage site, contains beautiful colonial homes sought after by expats appreciating historical charm.

Popular expat neighborhoods in Colombo

Colombo 7, also called Cinnamon Gardens, is the capital's most upscale district. It houses numerous embassies, international schools, and premium residences. Colombo 3 (Bambalapitiya) offers a central location close to shops and services. Colombo 5 (Havelock Town) appeals for its residential character and tranquility. The Nawala and Battaramulla areas feature high-end residential complexes with proximity to shopping centers.

Living in other cities

Galle Fort attracts a significant expat community thanks to its preserved colonial architecture, boutique cafés, and art galleries. The atmosphere is relaxed and cultural. Kandy, the country's cultural center, benefits from cooler highland climate and offers a picturesque setting around its lake. Negombo, a coastal town 35 km from the international airport, suits newcomers wanting easy transport access while enjoying beaches. Arugam Bay on the east coast attracts surfers with its laid-back lifestyle and international community.

Rental rates and market prices

In Colombo, average monthly rents stand at LKR 77,727 (approximately USD 260) for a one-bedroom apartment downtown, and LKR 39,545 (approximately USD 132) in the outskirts. For three bedrooms, expect LKR 161,955 (approximately USD 540) downtown and LKR 69,286 (approximately USD 231) in the outskirts.

In Galle, a one-bedroom downtown apartment costs around USD 71 monthly, while in Kandy, the same unit reaches USD 138. Villas in these cities generally range between USD 200 and USD 600 monthly.

Property purchase considerations

Foreigners face significant restrictions on property purchases. Freehold land acquisition is prohibited, with leasehold limited to 99 years maximum. Purchasing apartments and condominiums remains possible with certain restrictions. Legal workarounds exist that should be explored with a specialized local property advisor. Purchase prices per square meter stand at LKR 50,477 (approximately USD 168) downtown and LKR 29,086 (approximately USD 97) in the outskirts.

An international move to Sri Lanka requires careful preparation across administrative, logistical, family, and financial fronts. Starting these steps several months ahead ensures a smooth transition to your new country.

Essential moving checklist

1. Secure the appropriate visa before departure or plan for arrival application depending on your situation. For long stays, begin Residence Visa procedures several weeks in advance.
2. Arrange comprehensive international health insurance covering both emergency care and routine treatments, recommended even though public healthcare is free.
3. Book temporary accommodation for the first weeks via Airbnb or a guesthouse, allowing you to explore neighborhoods before signing a long-term lease.
4. Enroll children in an international school as early as possible, as some institutions maintain waiting lists for popular grade levels.
5. Obtain your work permit through your Sri Lankan employer if you're moving for a professional contract.
6. Check vaccination requirements, particularly yellow fever vaccine mandatory if arriving from a risk zone.
7. Open a local bank account upon arrival to facilitate rent payments and daily transactions.
8. Get an international driving permit before departure if you plan to drive in Sri Lanka.
9. Prepare pet import documentation by checking health regulations and required documents several months ahead.
10. Hire a professional international moving company to transport your belongings safely, obtaining multiple comparative quotes.

Settling in gradually

Take a progressive approach: arrive with essentials and take time to discover your environment before shipping all your belongings. This method lets you adapt your actual needs to the local context and avoid unnecessary transport costs. Join local expat groups quickly for advice on good addresses, administrative procedures, and help building a social network rapidly.

Daily life practicalities

Familiarize yourself with essential services upon arrival: identify the nearest hospital, international supermarkets for familiar products, and download useful local apps like PickMe for transport. Plan for a few weeks' adjustment period to acclimatize to the tropical climate, local rhythms, and Sri Lankan cultural specifics.

Sri Lanka offers exceptional cultural, sporting, and tourist activities. Between ancient Buddhist temples, pristine beaches, verdant mountains, and national parks, the island provides a balanced lifestyle combining relaxation and adventure.

Cultural heritage and festivals

Religious sites represent jewels of Sri Lankan heritage. The Temple of the Sacred Tooth Relic in Kandy and Dambulla Cave Temple rank among Buddhism's most sacred places. The country has several UNESCO World Heritage sites: Galle Fort, Sigiriya rock fortress, and the ancient ruins of Anuradhapura.

The festival calendar is particularly rich with Esala Perahera in Kandy during July-August, a spectacular procession of elephants and dancers, Vesak celebrating Buddha's enlightenment, Thai Pongal for the Hindu community, and Muslim and Christian celebrations. The National Museum in Colombo and colonial architecture in historic districts complete the cultural offerings.

Sports and outdoor activities

Arugam Bay enjoys international recognition for surfing, attracting enthusiasts worldwide. The south and east coasts offer excellent conditions for diving and snorkeling. Hiking enthusiasts appreciate climbing Adam's Peak, central mountain trails, and Horton Plains.

Yoga is widely practiced in tourist areas with numerous centers and retreats. Water sports like sailing, kayaking, and kitesurfing are developing along the coasts. Cricket, the national sport, captivates the population and attending a match provides a unique cultural experience. Several golf courses welcome players.

Nature and exploration

National parks offer memorable safaris. Yala National Park is renowned for leopards, Udawalawe for elephant herds, and Wilpattu for pristine nature. Tea plantations around Nuwara Eliya, nicknamed Little England, and Ella offer tours and tastings in breathtaking landscapes.

The beaches of Mirissa, Unawatuna, Bentota, and Tangalle provide relaxation beside the Indian Ocean. The train journey from Kandy to Ella is considered one of the world's most beautiful rail trips. Whale watching in Mirissa from November to April attracts many visitors.

Sri Lanka stands out for its particularly advantageous cost of living, with monthly expenses 50.3% lower than the United States and rents 85.6% cheaper. This significant difference allows expats to maintain a comfortable standard of living on a moderate budget, whether single or with a family.

Single person budget

August 2025 data shows a single person spends on average LKR 160,051 (approximately USD 533) monthly excluding rent to cover daily needs. This table details main monthly expenses:

Source: Numbeo (August 2025)

Family of four budget

For a family of four, monthly budget excluding rent reaches LKR 577,607 (approximately USD 1,925). Main differences concern larger housing and children's school fees:

Source: Numbeo (August 2025)

Food and services pricing

Restaurant meals remain very affordable: LKR 1,000 (approximately USD 3.33) for an inexpensive meal, LKR 7,000 (approximately USD 23) for a two-person mid-range restaurant meal. A cappuccino costs LKR 801 (approximately USD 2.67).

Market groceries show attractive prices: milk costs LKR 1,961 per gallon, bread LKR 153 per 500g, rice LKR 112 per 500g, a dozen eggs LKR 641, chicken LKR 650 per 500g, and bottled water LKR 164 per 1.5 liters.

Transportation and other expenses

Public transport is remarkably inexpensive with a bus ticket at LKR 55 (approximately USD 0.18). Taxis start at LKR 135 (approximately USD 0.45) with a rate of LKR 161 (approximately USD 0.54) per 1.6 km. Gasoline costs LKR 1,385 per gallon (approximately USD 4.62).

For clothing, Levi's jeans cost around LKR 7,958 (approximately USD 27) and Nike shoes LKR 20,083 (approximately USD 67). These prices allow maintaining a reasonable budget even for international brand products.