By As many seek ways to survive in a difficult economic environment, foreign ventures are booming across the country, with many operating unregulated. While the emergence of an informal sector around such businesses is inevitable, concerns arise.
The Sunday Times reported an unregulated tourist industry functioning in Ahangama, Midigama, Arugam Bay, and Kalpitiya. These foreign-owned businesses, particularly in tourism hotspots, are avoiding taxes and some owners violate their visa conditions.
While they raise property prices and offer employment, these ventures raise ethical concerns and harm compliant businesses. “Foreign bank accounts, foreign credit card machines, foreign currency cash payments—and now even PayPal transfers—the informal foreign-owned business sector is thriving in some of Sri Lanka’s busiest tourism hotspots. But where do their revenues go?” questioned the Sunday Times.
Lanka Newsline followed the trail and spoke to some foreign business operators engaged in unregulated activities. All had one thing in common: They claimed to boost local economies and felt welcome as assets to their communities.
Roxton Frank from Belgium, now operating a small guesthouse in partnership with a local, said, “I’ve been to the southern coast many times and thought it would be worth setting up a small business to stay longer than planned.” He admitted avoiding the hassle of business visas and registration by partnering with a Sri Lankan friend and extending his tourist visa.
Lanka Newsline also spoke to an unnamed surfing instructor who gives online lessons to foreigners. He urged the government to focus on helping small local businesses survive before cracking down on unregulated operations. “I just earn a few rupees to survive. No big businessman would risk an unlicensed business and investment,” he said.
A former local council member of the Aluthgama Pradeshiya Sabha warned, “While some indulge in the drug business and overstay visas, coordinating drug trafficking across the sea presents the real danger.”
Stakeholders urge authorities to create easier pathways for legal operation and stricter enforcement, ensuring both economic benefit and fairness rather than haphazardly clamping down. Innovative solutions like temporary work permits or easily obtainable business permits are proposed.
Undoubtedly, unregulated businesses create unfair competition, potential tax evasion harming the Sri Lankan economy, and visa violations raising legal and security concerns. These issues require handling without undermining positive impacts like job creation, capital inflows, increased tourism offerings, and quality improvements within the tourism sector.
“It’s a delicate issue affecting many livelihoods and needs careful handling before things escalate,” said the local council member. “Don’t throw the baby out with the bathwater,” he advised, having lived on the southern coast for decades.
