I cannot say if this is a scam or not. It is apparently very complicated though.
Per the United States Department of State document 2019 Investment Climate Statements: Sri Lanka, subheading "Limits on Foreign Control and Right to Private Ownership and Establishment":
Foreign ownership is allowed in most sectors, although the land
ownership law prohibits foreigners from owning land, with some
exceptions. Foreign investors are permitted to invest in company
shares, debt securities, government securities, and unit trusts. Most
investors cite acquiring land as the biggest challenge for any new
business in Sri Lanka. Private land ownership is limited to fifty
acres per person.
Generally, Sri Lanka prohibits the sale of public and private land to
foreign nationals and to enterprises with foreign equity exceeding 50
percent. However, on July 30, 2018, Sri Lanka amended the Land
(Restriction of Alienation) Act of 2014 allowing foreign companies
listed on the Colombo Stock Exchange (CSE) to acquire and hold free
hold land. The amendment also removed a prohibition on foreign
nationals owning condominium property below the fourth floor.
This means that your American investor cannot buy your land outright unless he represents a company traded on the CSE. This could mean that:
- You are entering a deal that requires a partnership or investment instead of an outright sale. This suggests you need a local lawyer or expert in managing such deals.
- You are being used as a front for the investor to bypass restrictive Sri Lanka law on land sales. He lives in America, you live in Sri Lanka. This may or may not be legal. It may or may not be a scam. It is certainly a seemingly complicated area of law.
You should consider - Which one of you will the local authorities seek out if this deal goes bad or is not entirely legal? Even if it is legal, how much paperwork and liability would you have to do as partial owner and property manager?
I also see in this document that:
The government owns approximately 80 percent of the land in Sri Lanka
This means that you own part of a scarce or tightly controlled resource in Sri Lanka. I think a good answer would more fully cite Sri Lanka law on the matter. Citing US State Department documentation presents this from your purported American investors side. Corroborating that from the Sri Lanka side would be smart.
I would argue that you should consider two things about the deal. If the answer to both is yes, only then do you need to worry if this is a scam:
1. Do you want to sell your property for partial equity or a discount?
2. Do you want to actually be a property manager?
My thinking is that if you just want to cash out your land and move on then you should just sell it for cash and move on. If you wanted to be a property manager, why don't you just manage your own property as 100% owner and get all the profits? Why use an investor?