20042004

Business Opportunities Business Opportunities In Sri LankaIn Sri Lanka

Presentation byPresentation byAmbassador Devinda R. SubasingheAmbassador Devinda R. SubasingheSri Lanka’s Ambassador to the USSri Lanka’s Ambassador to the US

Basic FactsBasic Facts

• Area – 65,606 sq kmArea – 65,606 sq km

• Population – 19.04 millionPopulation – 19.04 million

• Labor Force Labor Force – 6.7 million – 6.7 million

• Literacy Rate – 92%Literacy Rate – 92%

• Languages – Sinhala, Tamil, Languages – Sinhala, Tamil, English English

• Religions – Buddhism -70% Religions – Buddhism -70% Hinduism 15% Hinduism 15%

Christianity 8%Christianity 8% Islam 7%Islam 7%

• Government type - RepublicGovernment type - Republic

• Capital - ColomboCapital - Colombo

•Independence - 4 February 1948 Independence - 4 February 1948 (from U.K.) (from U.K.)

Sri Lanka: OverviewSri Lanka: Overview

• Sri Lanka is an island located in the Indian Ocean, at the base Sri Lanka is an island located in the Indian Ocean, at the base of the Indian Sub-Continent, 880 km north of the Equator.of the Indian Sub-Continent, 880 km north of the Equator.

• Sri Lanka is a multi-ethnic, multi-religious country with a Sri Lanka is a multi-ethnic, multi-religious country with a diverse and rich culture dating back to 2,500 years.diverse and rich culture dating back to 2,500 years.

• A land of endless enchantment for visitors from all over the A land of endless enchantment for visitors from all over the world.world.

• It’s fragrant spices, precious gems, legendary natural beauty, It’s fragrant spices, precious gems, legendary natural beauty, sublime culture and hospitable people made it South Asia’s sublime culture and hospitable people made it South Asia’s paradise island.paradise island.

Sri Lanka: OverviewSri Lanka: Overview

• Sri Lanka’s strategic location on the sea lanes between the Sri Lanka’s strategic location on the sea lanes between the East and the West is an advantage to the island’s positioning East and the West is an advantage to the island’s positioning as the “ hub” of South Asia.as the “ hub” of South Asia.

• Sri Lanka’s most dynamic sectors in the economy are textiles Sri Lanka’s most dynamic sectors in the economy are textiles and apparel, food processing, tourism, food and beverages, and apparel, food processing, tourism, food and beverages, telecommunications and, insurance and banking. telecommunications and, insurance and banking.

US-Sri Lanka RelationsA Historical Glimpse

• A history of 200 years of people-people contacts.

• 19th century trade involved the import of New England ice to Sri Lanka and the export of Sri Lankan graphite to America.

• Joseph Dixon, popularizer of the modern “lead pencil” visited Sri Lanka in 1838 to arrange for export of graphite.

• As early as 1813, Rev. Samuel Newell, a New England clergyman, engaged in Missionary activity in Ceylon (Sri Lanka.

• Mrs. Harriet Winslow (great-great grandmother of the late John Foster Dulles) founded a girl’s boarding school in 1824, considered the first in Asia.

• In 1917, Dr. Ananda Coomaraswamy, one of world’s leading Oriental

scholars, was named the Curator of the Boston Museum of Fine Arts.

• Formal diplomatic relations were established in 1948.

Sri Lanka-US Business RelationsSri Lanka-US Business Relations• Government of Sri Lanka currently pursuing a Free Trade Agreement Government of Sri Lanka currently pursuing a Free Trade Agreement

with the US Government to open markets bilaterally.with the US Government to open markets bilaterally.

• Trade and Investment Framework Agreement (TIFA) signed with the Trade and Investment Framework Agreement (TIFA) signed with the US in July 2002 and establishment of Trade and Investment Joint US in July 2002 and establishment of Trade and Investment Joint Council to promote trade and investment.Council to promote trade and investment.

• Sri Lanka has signed an Investment Promotion/Protection Sri Lanka has signed an Investment Promotion/Protection Agreement, an Avoidance of Double Taxation Agreement, an Open Agreement, an Avoidance of Double Taxation Agreement, an Open Skies Agreement and a Protection of Intellectual Property Rights Skies Agreement and a Protection of Intellectual Property Rights Agreement with the US to promote and guarantee protection of US Agreement with the US to promote and guarantee protection of US FDI in Sri Lanka.FDI in Sri Lanka.

• The Sri Lanka Congressional Caucus of the 108The Sri Lanka Congressional Caucus of the 108thth Congress has been Congress has been reactivated to enhance US- Sri Lanka bilateral relations.reactivated to enhance US- Sri Lanka bilateral relations.

• A Sri Lanka Working Group at the United States Chamber of A Sri Lanka Working Group at the United States Chamber of Commerce was established in September 2003 to foster increased Commerce was established in September 2003 to foster increased business relationships with Sri Lanka and to create a greater business relationships with Sri Lanka and to create a greater awareness of the business opportunities that exist for US companies. awareness of the business opportunities that exist for US companies.

Sri Lanka’s Trade with the USSri Lanka’s Trade with the US

• Total trade between Sri Lanka and the US was Total trade between Sri Lanka and the US was US$ 2 billion in 2002.US$ 2 billion in 2002.

• Total trade between Sri Lanka and the US Total trade between Sri Lanka and the US - US$1.80 billion in the first 11 months of 2003. - US$1.80 billion in the first 11 months of 2003.

• Sri Lanka exports to the US was US$1.7 billion (first Sri Lanka exports to the US was US$1.7 billion (first 11 months of 2003).11 months of 2003).

• US exports to Sri Lanka was US$1.4 million (first 11 US exports to Sri Lanka was US$1.4 million (first 11 months of 2003).months of 2003).

Sri Lanka’s Exports to the USSri Lanka’s Exports to the US

• Ceylon tea, considered the best in the world, caters to speciality tea Ceylon tea, considered the best in the world, caters to speciality tea segment of the US market. Sri Lanka is the second largest supplier segment of the US market. Sri Lanka is the second largest supplier of packeted tea and the third largest supplier of tea bags to the US. of packeted tea and the third largest supplier of tea bags to the US. Sri Lanka also exports green tea.Sri Lanka also exports green tea.

Apparel and Textiles

Travel Goods

Rubber & Rubberproducts

Gems and Jewelry

Headgear

Tea

Footwear

Sri Lanka’s Imports from the USSri Lanka’s Imports from the US• Cereals (wheat)Cereals (wheat)

• Electrical machineryElectrical machinery

• Fabrics and yarnsFabrics and yarns

• TobaccoTobacco

• Paper and paper boardPaper and paper board

• Rubber productsRubber products

• ChemicalsChemicals

• AutomobilesAutomobiles

• PlasticsPlastics

Major US Companies Operating in Major US Companies Operating in Sri LankaSri Lanka

• The Limited Inc.The Limited Inc.

• Caterpillar Power Caterpillar Power

• Ventures CorporationVentures Corporation

• Sara Lee branded ApparelSara Lee branded Apparel• KellwoodKellwood

• Wal-mart Stores Inc.Wal-mart Stores Inc.

• Bell HelicopterBell Helicopter

• AnsellAnsell

• American International Group Inc.American International Group Inc.

• Citi Group inc.Citi Group inc.

• Chevron Texaco/CaltexChevron Texaco/Caltex

• Galleon GroupGalleon Group

• General ElectricGeneral Electric

• 3M Company3M Company

• AES CorporationAES Corporation

• Computer Associates International Inc.Computer Associates International Inc.

• Gloria VanderbiltGloria Vanderbilt

• The Coca Cola CompanyThe Coca Cola Company

• Liz Claiborne Inc.Liz Claiborne Inc.

• Nathan AssociatesNathan Associates

• May Department Stores InternationalMay Department Stores International

• JP Morgan ChaseJP Morgan Chase

• Singer CorporationSinger Corporation

• Mast Industries Inc.Mast Industries Inc.

• Fed Ex CorporationFed Ex Corporation

• Millennium Information TechnologiesMillennium Information Technologies

• IBM CorporationIBM Corporation

• VIRTUSAVIRTUSA

• Lanka Bell (Pvt.) Ltd.Lanka Bell (Pvt.) Ltd.

• CeletronCeletron

• Playknits GroupPlayknits Group

• J. Walter ThompsonJ. Walter Thompson

• Union CarbideUnion Carbide

• Warner LambertWarner Lambert

Leading Brand Names Manufactured in Sri Lanka

The Limited Inc. and Sri Lanka

• The Limited, the Columbus, Ohio based company has been purchasing intimate apparel (Victoria’s Secret) from Sri Lanka for the last 15 years.

• Sri Lanka manufactured lingerie, from the state-of the-art factories employing highly skilled and literate workers, considered “the best product on the shelves” at Victoria’s Secret Stores.

• Victoria’s Secret sources over US$350 million worth of merchandise from Sri Lanka.

• Sri Lanka recognized as one of Victoria’s Secret’s leading manufacturing bases in the world.

Trade Opportunities for Trade Opportunities for Companies in OhioCompanies in Ohio

Potential Ohio ExportsPotential Ohio Exports

• Agricultural Products – Soybeans, corn, Wheat, feed grainsAgricultural Products – Soybeans, corn, Wheat, feed grains• Medical Rubber ProductsMedical Rubber Products• Industrial Machinery & ComputersIndustrial Machinery & Computers• Paper and Paper BoardPaper and Paper Board

Potential Imports from Sri LankaPotential Imports from Sri Lanka

• ApparelApparel• TeaTea• Gems and JewelryGems and Jewelry• Rubber and Rubber GoodsRubber and Rubber Goods• Information Communication Technology (ICT)Information Communication Technology (ICT)• PlasticsPlastics

Opportunities under India-Sri Lanka Free Trade Agreement

• Sri Lanka as a value addition platform to the Indian sub-Sri Lanka as a value addition platform to the Indian sub-continent.continent.

• A market of over 1.0 billion people.A market of over 1.0 billion people.

• Market Access – Over 80%of goods can enter on duty free Market Access – Over 80%of goods can enter on duty free basisbasis

• Sri Lanka-India land bridge project proposed. Pre-feasibility Sri Lanka-India land bridge project proposed. Pre-feasibility study is to be undertaken to determine viability.study is to be undertaken to determine viability.

• Potential sectors for US investmentPotential sectors for US investmentRubber, Paper & Paper board, garments & textiles, iron & steel, Rubber, Paper & Paper board, garments & textiles, iron & steel, Machinery & mechanical appliances, electronics/electrical and Machinery & mechanical appliances, electronics/electrical and automobiles & spare parts.automobiles & spare parts.

Indo-Lanka Land Bridge Location

The Land Bridge to India

Sri Lanka in US Study Abroad Programs

DRAFT SLIDE for comments please. The ISLE (Intercollegiate Sri Lanka Education) Program initiated in

1982, is based in Kandy, Sri Lanka. Participating colleges include, Bates, Bowdoin, Carleton, Colby,

Grinnell, Holy Cross, Swarthmore and Whitman. Majors include, Religion, Political Science, Development Studies,

Sociology and Anthropology, Women’s Studies, Psychology and Linguistics.

Internships available with Government and Private Institutions and, NGOs.

The American Institute for Sri Lankan Studies (AISLS), established in 1995 - fosters excellence in American research and teaching on Sri Lanka- Promotes exchange of scholars and scholarly information between the US and Sri Lanka

AISLS Fellowships support 2-4 months research in Sri Lanka by US citizens holding PhDs or equivalent.

Investment Opportunities for Ohio Investment Opportunities for Ohio Companies in Sri LankaCompanies in Sri Lanka

• Infrastructure Development- Power & Energy; Ports & Airports; Water Infrastructure Development- Power & Energy; Ports & Airports; Water Supply & Sanitation; HighwaysSupply & Sanitation; Highways

• BiosciencesBiosciences

• Information Communication TechnologyInformation Communication Technology

• Rubber productsRubber products

• Automobile partsAutomobile parts

• Vertical integration of textiles/accessoriesVertical integration of textiles/accessories

• Food processing industriesFood processing industries

Business ClimateBusiness Climate

The Sri Lankan economy is one of the most business friendly The Sri Lankan economy is one of the most business friendly and liberalised in South Asia.and liberalised in South Asia.

• Total Foreign OwnershipTotal Foreign Ownership

• No restriction on Foreign Exchange Transactions(related to No restriction on Foreign Exchange Transactions(related to current account payments).current account payments).

• Safety of Foreign Investments Guaranteed by the constitution.Safety of Foreign Investments Guaranteed by the constitution.

• Agreements signed with many countriesAgreements signed with many countries

• Bilateral Investment ProtectionBilateral Investment Protection

• Double Tax ReliefDouble Tax Relief• Equal Treatment: Foreign & Local InvestorsEqual Treatment: Foreign & Local Investors

• Legal & Regulatory frameworkLegal & Regulatory framework• SophisticatedSophisticated

• TransparentTransparent

Investment Incentives in Investment Incentives in Sri LankaSri Lanka

• Tax holidays from 5 to 20 years.Tax holidays from 5 to 20 years.

• Concessionary tax at 15% after expiry of tax holiday.Concessionary tax at 15% after expiry of tax holiday.

• Import Duty Exemption for Capital Goods.Import Duty Exemption for Capital Goods.

• Import Duty Exemption on Raw Materials if utilized for exportImport Duty Exemption on Raw Materials if utilized for export

• Exemption from Exchange Controls.Exemption from Exchange Controls.

• No restriction on repatriation of dividends, profits etc.No restriction on repatriation of dividends, profits etc.

• Free transferability of sharesFree transferability of shares

• The right to 100% foreign ownership in almost all sectors of the economy The right to 100% foreign ownership in almost all sectors of the economy

• Concessionary Taxation on expatriates incomeConcessionary Taxation on expatriates income

• Rubber productsRubber products

A GREAT PLACE TO VISIT

A GREAT PLACE TO WORK

A GREAT PLACE TO LIVE

Thank You!

Embassy of Sri Lanka

2148, Wyoming Avenue NW

Washington DC 20008

Telephone : 202-483-4026

Fax : 202-232-7181

E mail : slembassy@slembassyusa.org

Website : http://www.slembassyusa.org