Colombo, August 4, 2025 — As the Sri Lankan government moves to expand its free visa-on-arrival scheme to include 40 additional countries, concerns are mounting over whether weak enforcement of immigration laws could turn the policy into a loophole for unlawful foreign-run businesses to flourish.
The initiative, promoted as a tourism and investment incentive, comes at a time when enforcement of the Immigrants and Emigrants Act remains inconsistent. Immigration authorities and local entrepreneurs warn that, without better regulation, the relaxed visa framework may worsen an already growing problem — foreign nationals entering the country under tourist visas and quietly engaging in business operations without proper authorisation.
“There’s no objection to welcoming visitors. But without effective monitoring, some come as tourists and stay as unlicensed business operators,” said a senior official attached to the Immigration and Emigration Department. “We have seen this happen, particularly in coastal towns and tourist zones.”
From informal cafes and surf schools to guesthouses and retail shops, some of these businesses — often operating under the radar — have drawn criticism from local business owners who feel disadvantaged.
“They don’t pay taxes, they don’t register, and yet they’re allowed to operate freely,” said Suren Fernando, who runs a small family-owned hostel in Mirissa. “We follow the rules and struggle. They break the rules and thrive.”
Enforcement is further hampered by understaffed field teams, outdated tracking systems, and poor coordination between agencies. Officials admit they lack the capacity to monitor the real-time movement and visa compliance of thousands of foreign visitors entering the country each month.
Tourism authorities defend the free visa policy, arguing that it is necessary to restore Sri Lanka’s competitiveness in the regional travel market. “But we recognise the need for balance,” said an official from the Ministry of Tourism. “We are working with the Immigration Department to tighten post-arrival surveillance and ensure that visitors respect the limits of their visas.”
The matter is now drawing wider scrutiny as local chambers of commerce and industry associations raise their voices. Some are calling for urgent reforms, including digitised visa monitoring, stricter post-entry checks, and clearer legal consequences for foreign nationals violating visa terms.
As Sri Lanka seeks to rebuild its economy through openness, the challenge will lie in doing so without compromising the rule of law or local livelihoods.
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