Corporate governance standards will decide Sri Lanka's FDI future - Faiszer Musthapha

Corporate governance standards, not just economic policy, will determine whether Sri Lanka can secure long-term foreign direct investment, opposition MP and President's Counsel Faiszer Musthapha said.

He made the remarks during an interview with private television channel, noting that the efficiency of local companies' boards of directors is now as important to investors as the country's broader economic framework.

Musthapha said international investors no longer base their decisions purely on balance sheets or tax concessions.

He explained that investors also examine whether companies are properly governed, whether boards exercise full oversight, and whether the rights of minority shareholders are adequately protected.

He stressed that good corporate governance can no longer be treated as optional, and that Sri Lankan companies must demonstrate the highest standards of accountability, transparency and board responsibility if the country is to compete with the world's leading investment destinations.

He observed that serious investors are drawn to institutional trust and legal certainty, rather than short-term opportunities alone.

Drawing on his experience as a former minister who held the portfolio of Investment Promotion, Musthapha said international investors closely assess the efficiency of internal governance systems, the level of protection given to shareholders, and the ethical integrity of corporate decision making processes.

Meanwhile, a Sri Lankan-origin businessman engaged in international commerce, echoed Musthapha's views, stating that national policy must actively facilitate investment rather than hinder it.

He noted that even commercially viable projects often become trapped for years in legal disputes or arbitration proceedings, a pattern he said severely undermines investor confidence.

Economic analysts have separately pointed out that tax concessions alone are not enough, and that confidence in the legal system, regulatory certainty and institutional transparency are equally decisive factors when investors choose where to place their capital.