2. Restriction on transfer of land

to a foreigner; or

to a company incorporated in Sri Lanka under the

to a foreign company, unless exempted as provided in section 3.

For the purpose of maintaining the legal validity of a transfer of land to a company incorporated in Sri Lanka under the Companies Act, with less than fifty per cent of foreign shareholding, the foreign shareholding of such company shall remain less than fifty per cent, for a minimum period of consecutive twenty (20) years from the date of such transfer.

Where the foreign shareholding of a company referred to in paragraph (a) reaches or exceeds fifty per cent, contrary to the provisions of paragraph (a), in consequent to—

the change of ownership of shares directly or indirectly; or

the death of a shareholder of such company and the shares of the deceased shareholder devolving, in accordance with the applicable laws of succession of Sri Lanka, on his next of kin who is a foreigner, the transfer of land referred to therein shall be void and shall have no effect in law, with effect from the date of increase of the foreign shareholding:

listed in the Colombo Stock Exchange (with a minimum number of two hundred shareholders in the case of a Diri Savi Board and one thousand shareholders in the case of a Main Board), takes steps to reduce its foreign shareholding to less than fifty per cent, within a period of twelve months from the date of increase of its foreign shareholding; or

other than a company referred to in sub-paragraph (i), takes steps to reduce its foreign shareholding to less than fifty per cent, within a period of six months from the date of increase of its foreign shareholding, in compliance with the provisions of that paragraph, the transfer of land referred to in paragraph (a), shall be deemed to be legally valid, with effect from the date of restoring the foreign shareholding of such company to less than fifty per cent.

For the purposes of this section the expressions “Diri