This study analyses trends and patterns of Foreign Direct Investment (FDI) into the country over the past few decades focusing the manufacturing industry.  Foreign Direct Investment is considered as a major factor contributing to economic growth and development of the country. However, despite efforts to attract FDI, there has been many challenges due to liberalisation reforms. The Three-decade long civil war and post-conflict environment have hampered major investment potential. For FDI to be rewarding, some challenging factors should be resolved. According to the findings of this study, (1) Locally owned BOI enterprises lack the necessary foreign/joint ownership (2) High turnover of firms (3) Ease of starting business for investors being poor are some of the key factors that reflect Sri Lanka,s poor performance on the FDI front.