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INVESTMENT OPPORTUNITIES IN SRI LANKA
Sri Lanka
Total Land Area: 65,610 s.q. km Population: 20.48 Million Commercial capital & largest city: Colombo Currency: Sri Lankan Rupee (LKR) GDP Growth Rate: 7.3% (2013) Per Capita GDP Income: US$ 3,280 (2013) Literacy rate: 95.6%
Facilitation Body for Foreign Investments
The Board of Investment of Sri Lanka
The central facilitation point for investors for assistance and advice throughout the investment process 36 yrs of experience, an engine of growth creating a considerable impact on the country's economic
development Committed towards continuously improving the country's investment climate BOI companies today employ over 470,000 workers 65% % of Sri Lankan exports and 86% of the country's industrial exports Agreement with the BOI remains valid for the life of the enterprise . Provisions unalterable by successive govts. Facilitates investors on a sector-focused approach, covering all vital areas of the economy. Country specific information, can be obtained from Country Desk Officer pertaining to the origin of your
investment.
Note :- An investment application form can be obtained from the relevant sector.- Duly completed application forms need to be handed over to the relevant sector heads. - The sectors will act as relationship managers for all investors in their sector, from project evaluation to
implementation to post - investment aftercare.- Hours of Operation are Monday to Friday : 8.30am to 4.30pm (GMT +5.30)
Why Sri Lanka?
• Peaceful domestic environment, favorable government policies & improved investor confidence commendable performance in 2013
• The improved performances in all key sectors high economic growth• Services sector: largest contributor to national economy 56.8%• The strong economic performances lifted country's per capita income
graduated to middle income status from the list of Poverty reduction & Growth Trust (PRGT) eligible countries
• Government plans to transform Sri Lanka into a strategically important economic centre by developing five strategic hubs:
• Knowledge hub• Commercial hub• Naval & maritime hub• Aviation hub• Energy hub
• Development of hubs based on Sri Lanka's strategic location & resources
A) Strong Resilient Economy
Pioneer of economic liberalization among South Asia (3+ decades ago) Government has embraced Strategies and policies conducive for international investment embraced Transparent investment laws that aim to foster foreign direct investments:
Why Sri Lanka?B) Supportive Government Policies
Index of World Economic Freedom Rankings -2014
Country World Ranking Country World Ranking
Singapore 2 Indonesia 100
Korea, South 31 India 119
Malaysia 37 Pakistan 126
Thailand 72 Bangladesh 131
Philippines 89 China 137
Sri Lanka 90 Vietnam 147
Burma 162 Nepal 149
Iran 173
o Total foreign ownershipo No restrictions on repatriation of earnings, fees, capital, and on forex transactions relating to current account payments.o Safety of foreign investment - guaranteed by the constitution.o Existence of a transparent legal and regulatory framework, covering all prerequisite business law enactments.o Bilateral investment protection agreements (28 countries) & double taxation avoidance agreements (38 countries)o Founder member of the Multilateral Investment Guarantee Agency (MIGA)o According to the Index of Economic Freedom (2014), Sri Lanka has been ranked 90 of 186 countries
Efforts intensified to attract investments to target sectors in which Sri Lanka has strong foundation for growth + to areas where it is nationally important to develop.
Incentives to induce high value investment to priority sectors. BOI promotes diversification of Sri Lanka's industry and services with special focus on advanced technology and value addition.
Amendments to the tax system overall tax regime for all sectors will be less complex and at a lower rate across the economy.
Target Sectors Actively Promoted by Sri Lanka through Board of Investment (BOI)1. Target Sectors Actively Promoted by Sri Lanka through Board of Investment (BOI)
2. Export Oriented Manufacturing
3. Export Oriented Services
4. Tourism, Tourism Related Projects
5. Infrastructure Projects
6. Higher Education/Skill Development
7. Value Added Strategic Projects
8. Agriculture (Agro Processing, Fish Based Industry, Dairy)
9. Establishment of Industrial Estates, Special Economic Zones, Knowledge Cities.
Why Sri Lanka?B) Supportive Government Policies (contd..)
2011: most literate population in South Asia - 94.2% (Male: 91.1% and Female: 93.5%) Investment in public education a competent, intelligent, trainable workforce that's comfortable
with high tech production and services 50% of the students who have completed higher education are trained in technical and business
disciplines Business language: English Well educated and energetic, skilled and semi-skilled human resources are readily available at
competitive wage rates.
Why Sri Lanka?C) Educated and Adaptable Workforce
Literacy Rates of Selected Asian Countries in 2011
Country Literacy Rate % World Ranking
Thailand 94.1 84Indonesia 92 94Malaysia 92.5 92Sri Lanka 94.2 83Vietnam 92.8 91India 74.1 139Bangladesh 55.9 164Pakistan 62.2 159 Source : UNDP Report, 2011
Labour force: 49.8 % of the population - men 67.8% & women 33.4% Reputed for its precision, quality and productivity Skilled and semi-skilled workers at competitive wage rates Renowned for high caliber professional skills esp. in Financial
Accounting and Marketing sectors World class reputation in the production of high end garments and
lingerie markets
Why Sri Lanka?C) Educated and Adaptable Workforce (contd…)
Wage Rates - 2013Country Min. Wage
(USD/Month)[probationer to skilled
worker]
Factory Worker Monthly Base Salary (USD/Month)
BangladeshSri LankaPakistanVietnamIndiaIndonesiaThailand
39 - 109 *73 - 82 *
82145
28 - 155 *226
9.85 / Day
74108173113276239345
Source: Investment related costs in Asia and Oceania, 23rd Survey, JETRO, 2013
Situated at the crossroads of major shipping routes connecting South Asia, Far East and the Pacific with Europe and the Americas.
Located next to the fast growing Indian sub-continent with close proximity to Southeast Asia and the Middle East.
Strong air connectivity with over 100 weekly flights to India alone. Connected to the SEA-ME-WE III and IV (South East Asia – Middle
East – Western Europe) fibre optic communication backbone with over 11 communication satellites orbiting above the south of the country.
Why Sri Lanka?D) Location and Connectivity
The most liberalized economy in South Asia 1978: Open market free economic policies adapted Successive governments further liberalized the economy, leading to
deregulation, greater privatization and opening the economy to international competition
Transparent investment laws aim to foster foreign direct investments 100% foreign ownership of companies permitted ie. local partners for
foreign investments - not required 100% repatriation of annual earnings/ profits permitted ie. re-
investment of proportion in the business – not stipulated Never defaulted international debt obligations Commercial laws are based on British laws + highly independent
judicial system Safety of foreign investments guaranteed by the Constitution ie.
foreign owned assets cannot be expropriated
Why Sri Lanka?E) Vibrant Business Environment
Strong Intellectual Property law in line with WIPO and WTO regulations
Guaranteed national treatment ie. no discrimination between a local and a foreign investor
Insurance cover against political risk from Multilateral Investment Guarantee Agency (MIGA) (Sri Lanka is a signatory)
Sense of security & financial advantage (due to the attractive tax holidays) guaranteed by : Bilateral Investment Protection Agreement with 28 countries Double Tax Avoidance Agreements with 38 countries including Saudi Arabia
on limited basis Dynamic and resilient private sector - possible joint venture partnership
for foreign investors. Concessions granted under an agreement with the Board of Investment –
for qualifying investment projects - remain valid over the lifetime of the enterprise
Why Sri Lanka?E) Vibrant Business Environment (contd…)
One of the safest countries in the world to invest Mechanisms in place to protect investors: Article 157 of the constitution guarantees the safety of
investment protection treaties and agreements approved by parliament by a two thirds majority
Signed Bilateral Investment Protection Agreements (IPA) with 28 countries
Independent system of courts which can redress any concerns of investors
Bilateral Double Tax Avoidance Agreements with 38 countries.
Why Sri Lanka?F) Investment Protection and Double Taxation
Australia
Belgium-Luxembourg
China
Czech Republic
Denmark
Egypt
Finland
France
Germany
India
Indonesia
Iran
Italy
Japan
Republic of Korea
Kuwait
Malaysia
Netherlands
Norway
Pakistan
Romania
Singapore
Sweden
Switzerland
Thailand
United Kingdom
USA
Vietnam
Bilateral Investment Treaties signed with:
Australia
Bangladesh
Belgium
Canada
China
Denmark
Finland
France
Germany
Hong Kong (Limited)
India
Indonesia
Iran
Italy
Japan
Korea (Republic of)
Kuwait
Malaysia
Mauritius
Nepal
Netherlands
Norway
Oman (Limited)
Pakistan
Philippines
Poland
Qatar
Romania
Russia
Saudi Arabia (Limited)
Singapore
Sweden
Switzerland
Thailand
UAE
United Kingdom
USA
Vietnam
Double Taxation Avoidance Agreements signed with:
• Granting of Tax Holidays from 4 -12 years depending on the value of the Investment
• Min. Investment LKR 25 ml/ $ 0.25 ml• Corporate tax for Export Oriented Activities (90% export)/ Tourism/
Construction, Industry/ Petroleum Exploration• Duty Free Imports : Capital Goods and Raw materials for Export Oriented
Activities, Capital Goods only (for all other categories)• Exemption from Exchange Control: For Companies that export goods (Minimum
90% of total output) and for companies receiving earnings in Foreign Currency for export services
Why Sri Lanka?G) Incentives for Investments
Colombo city: A cosmopolitan living environment Abundant nightlife, world-class shopping, theatre, cafes, art & star
class hotels Comfortable housing: Luxury condominium apartments ideal for
expatriates Internationally recognized institutions of healthcare & excellent
medical facilities Educational institutions of international standards World-class recreational sites Equable climate throughout the year Unparalleled natural beauty
Why Sri Lanka?H) Quality of Life
Only country in the world that has Free Trade Agreements with both India and Pakistan Market access on a duty free basis to a total market size of 1.5 Billion people - middle
class of 500 Mn people (size of entire European Union) Indo-Sri Lanka FTA (2000) : 100% duty free access to India for 4,232 products. Trade
growth by 5+ times. Pakistan-Sri Lanka FTA (2005) : 100% duty free access to Pakistan for 4,686 products.
Trade growth by 3 times. [Note: 1) To qualify under the above FTAs products need to be wholly produced or have
a domestic value addition of 35% value addition FOB level, 2) The HScode transformation needs to be at the 4 digit level for the ISLFTA and 6 digit level PSLFTA. Details provided the BOI website ]
By locating in Sri Lanka, a company can gain preferential trade access to two large regional blocs under the South Asian Free Trade Area(SAFTA) and Asia Pacific Trade Agreement (APTA)
Non -Reciprocal market access to EU and the USA, Japan, Canada, Russia etc, under GSP FTA with China under negotiations
Why Sri Lanka?I) Access to Key Markets
Preferential market access for products of Sri Lanka origin
The Sri Lankan government has launched an ambitious program of physical infrastructure development to completely upgrade the sea, air, road, power and telecom backbone of the country. Main features of this program:1) Sea Port and Airport Development: Colombo South Port Expansion• The Sri Lankan government has declared its intention to develop the country as a leading regional aviation, navigation and trading hub in South Asia• Development of maritime & aviation transportation is infrastructure development agenda. •Focus: To expand the capacity and improve the efficiency of existing ports through modernization and construction of new ports and airports in strategic locations.
Why Sri Lanka?J) Rapidly Developing Infrastructure
World Port ranking: No. 1 in South Asia Total container throughput 4 Mn. TEUs Transshipment cargo 70% 33 major shipping lines 14 feeder services Capacity to be increased - 12 million TEUs 12 new berths Will be the deepest port in the region New port being constructed in South Eastern Sri Lanka
Colombo South port development (under construction)
2) Hambantota Port Development
Phase I of the project, the Mahinda Rajapaksa Magampura Port, was inaugurated in November 2010.
The port is expected initially to function as a service and industrial port and later be developed to handle transshipment cargo.
Phase II of the port is underway at an estimated cost of US$ 800 Mn. The port is ideally located to serve the main East-West shipping lane connecting Europe and the Middle-east with South East Asia.
The bunkering facilities at the Port of Hambantota, set up at a cost of US$ 76.5 million, and the tank farm has commenced commercial operations.
Out of the 14 tanks it has, eight tanks will be used to store marine fuel, three will store aviation fuel and three remaining tanks will be used to store liquid petroleum.
The aviation fuel stored in the Hambantota Port is to be used for the Mattala Airport, the second international airport currently being built in Hambantota.
Why Sri Lanka?J) Rapidly Developing Infrastructure (contd…)
3) Expansion of Bandaranaike International Airport
A project is under way to expand the island's first international airport at Katunayake, 35 km north of Colombo.
The project includes the expansion of the transit area, construction of new baggage-reclaim area, multi storied car park and widening of the existing runway.
A feasibility study is being carried out for a second runway.
a) Colombo - Katunayake Expressway - CKE (25km) The Colombo – Katunayake Expressway connects the Colombo City and the International Airport at Katunayake. It
consists of four Interchanges at New Kelani Bridge, Peliyagoda, Ja-Ela and Katunayake. The Contract value of the project is US$ 292 Mn. Construction was completed and opened for the public on 27th of October 2013 by his Excellency the president Hon. Mahinda Rajapakse.
The CKE will reduce the travel time between Peliyagoda and Katunayake to 20 minutes from the earlier time of 1.5 hours using Peliyagoda-Puttalam road (A003).
The quick travel between the Bandaranaike International Airport and the capital of the country with enhanced safety will surely help to boost the country's economy in addition to providing pleasant travel to the road users.
Why Sri Lanka?J) Rapidly Developing Infrastructure (contd…)
4) Development of High Mobility Road Network Road development in the country, which was left behind last few decades due to the war, has been
given prominence by the government. The national Road Master Plan has already been prepared, which focuses on the construction of
highways, widening of highways, reduction of traffic congestion, road maintenance & rehabilitation and bridge rehabilitation & reconstruction.
It has become an urgent necessity for further investment in road network, thus the development of road network has become a major determinant factor in attracting new investments to the country.
b) Southern Highway (126km) The longest expressway being built in Sri Lanka. The construction of a four-lane highway from Colombo to Matara will be a
catalyst for the economic and social development of the Southern region and promotion of and inter-regional transport network. The highway was opened for public on 27th November 2011.
The section of Southern Expressway from Pinnaduwa (Galle) to Godagama (Matara) has been opened to public on 15th March 2014.
This section also consists of 4-lane capacity similar to the earlier section from Kottawa to Pinnaduwa. The maximum operating speed for this section is also 100 kmph.
Now the Southern Expressway from Kottawa to Godagama (Matara) is in operation. It is expected to extend the Southern Expressway from Matara to Hambantota with the intention of linking Mattala Airport and Hambantota Harbour to the Commercial Capital, Colombo in future.
c) Outer Circular Highway - OCH (29.2km) The outer Circular Highway (OCH) is located in the Colombo Metropolitan Region and passes through two administrative districts, namely Colombo
and Gampaha. This highway runs around 20 km away from the City centre of Colombo, connecting radial routes and has a total length of 29.2 km. The northern end of the highway is located at Kerawalapitiya on Colombo-Katunayake Expressway and the southern end is located at Kottawa on
Colombo-Ratnapura-Wellawaya-Batticaloa (A004) road where Southern Expressway meets OCH. Outer Circular highway from Kottwawa to Kerawalapitiya will link seven trunk roads and the Colombo – Katunayake and the Southern Expressways. The expressway is implemented in three phases as given below; Phase 1: Section from Kottawa to Kaduwela (11km) - Commenced in December 2009. (Phase 1 completed and opened for public in March
2014) Phase 2: Section from Kaduwela to Kadawatha (8.9km) - Commenced in 2012. Phase 3: Section from Kadawatha to Kerawalapitiya (9.2km)
Why Sri Lanka?J) Rapidly Developing Infrastructure (contd…)
d) Colombo - Kandy Highway (99km)
The proposed North – East Expressway (Colombo – Kandy Expressway) begins at Kadawatha of the present Colombo – Kandy (A1) Road (at the access point of the Outer Circular Highway) and links with Katugastota– Kurunegala – Puttalam (A10) road at Hedeniya and Kandy– Jaffna road (A9) at Katugastota.
The length of this road is 99 km. Construction of the North - East Expressway is mainly divided into two construction phases viz.
Phase I (Kadawatha–Ambepussa) – 48.2 km and Phase II (Ambepussa– Katugastota) - 50.7 km.
The expressway is expected to be built as a privately financed toll road and will be later expanded to Jaffna and Trincomalee.
The cost for the first phase of the road project is estimated to be one billion US dollars.
Why Sri Lanka?J) Rapidly Developing Infrastructure (contd…)
SEA-ME-WE IV fiber cable network
• Most advanced Telecommunication Industry in South Asia• Sri Lanka is being developed as regional hub for telecommunications• Fastest growth sector driven by public private partnership• Development of faster and more efficient technologies• Fiber Optic Cables with
– SEA-ME-WE III – SEA-ME-WE IV (Connectivity Bandwidth - 1.32 terabits per second)
Telecommunications Technologies GSM (Global System for Mobile communication)
3.75G and 4G services HSPA (High Speed Packet Access technology )
Video conferencing, video streaming, mobile TV, music streaming and high speed internet
CDMA
Why Sri Lanka?K) Developed Infrastructural Facilities: Telecommunications
Main Power Sources
• Hydro - 45%
• Thermal - 55%
•Total capacity – 1780 mw
Pipeline Projects• Trincomalee Coal Fired Plant (500 MW) • LNG Power & LNG Terminal (600 MW)
New Constructions• Norochcholai Coal Fired Plant (300 MW - 2011, Additional 600 MW – 2013)• Upper Kothmale Hydro Power Plant (150 MW - 2012)
Why Sri Lanka?K) Developed Infrastructural Facilities: Power
Tea, Rubber, Coconut Spices Gems Mineral sands and rare earths such as Mica,
Phosphate, Salt, Silica Sand, Feldspar, Graphite , Calcium Carbonates
Fishing grounds Oil and Gas deposits Nature Tourism
Why Sri Lanka?L) Natural Resources
Sri Lanka’s Total Export Values
Year
Sri Lanka’s Exports to Thailand
Sri Lanka’s Imports from Thailand
Total Trade
2006 38 205 243
2007 47 231 278
2008 77 298 375
2009 63 271 334
2010 84 316 400
2011 76 491 567
2012 66 460 526
2013 57 428 485
2014 54 462 516
Value in Millions of US Dollars Source of data: Dept. of Commerce, Sri Lanka
Production & ExportsA) Garments
• Industry with 3 decades of experience• 300 export oriented manufacturing plants• A flagship green manufacturing destination World 1st LEED Certified plant
Asia’s 1st carbon neutral facility
INTERNATIONAL BRANDS SRI LANKAN BRANDS
160 million kg of natural rubber produced annually
130,000 hectares under cultivation
Products: sheet rubber, sole crepe, latex crepe, technically specified rubber & centrifuged latex.
Accounts for 20% of solid tyre market
Industrial & surgical gloves with gamma irradiation facilities
Production & ExportsB) Rubber
• History of over 130 years , accounts for 20% market share today
• 330 million kg production accounting for 9% share grows in 200,000 hectares
• Adheres to ISO 3720 quality standard & ensures cleanest Tea with minimum Residue Limit.
• World’s first ozone friendly Certification Mark - grown 100% ozone-friendly
Production & ExportsC) Ceylon Tea
TEA BRANDS
• Pure Ceylon cinnamon – with unique flavor and
aroma
• 85% of world market share
• Produce a range of spices , pepper cloves,
nutmeg, mace & cardamom
• Supply high quality essential oils for cosmetics &
pharmaceuticals
Production & ExportsD) Spices
•Single largest supplier of bristle coir fiber
•Environmental friendly production
Products: • Desiccated coconut - Bakery & Confectionary • Coconut milk powder, cream & oil• Coco fibre pith, coco pots & poles for Horticulture • Coir brushes and brooms • Coir mats & carpets for flooring & for winter season• Geo textiles to prevent soil erosion.
Production & ExportsE) Coconut Products
• A rich variety of industrial minerals such as Graphite, Ilmenite, Rutile, Zircon, Quartz, Feldspar, Clay, Kaolin, Apatite, Silica sand, Garnet sand, Mica, Calcite and Dolomite.
• The Pulmoddai beach sand deposit is the most important non ferrous mineral reserve in Sri Lanka.
• Sri Lankan graphite popular for its high purity
Production & ExportsF) Mineral Products
EProducts: Tableware Wall & floor tiles Ornaments
Strengths Highly skilled workforce State-of-the-art technology In-house R & D facilities Abundant supply of raw materials Ensure design confidentiality International quality standards
Production & ExportsG) Porcelain & Ceramics
BRANDS
Yachts, Leisure , Pleasure boats Passenger, Sports, Rescue, Coast guard and
Petrol boats Fishing boats Boat building accessories
Fishing gear Propellers Life jackets Safety equipments
Production & ExportsH) Boat Building
Banking, financial, insurance, mobile
applications and HRM
Offshore Accounting & Legal services
Medical diagnostics & engineering services
Architectural/Construction services, Quantity
Surveying
Other export services
Ayurvedic herbal healthcare
Printing services
Globally Competitive industry
Clean and Green technology
Top CIMA student population
2nd highest pool of UK qualified
Accountants
Over 300 ICT/BPO/KPO Companies
Sub sectors Why Sri Lanka?
ServicesICT / BPO Services
MNCs Operating in Sri Lanka Global Brands Served
Leading Global Investments in Sri Lanka
Project Locations (for industrial manufacturing and processing businesses): a) BOI administered Export Processing Zoneb) Industrial Park (with required infrastructure facilities) on long-term lease basis.
Other Locationsa) Purchase a privately owned land on outright purchase or lease basis.b) Government owned lands* available for long term lease under different
government agencies.
*Acquisition of government lands involve a comparatively longer process and valuation is based on current market price.
Setting up in Sri Lanka
Department Contact Designation Contact Officer Location
Investment Promotion
Executive Director(Investment Promotion)
Mrs. Renuka WeerakoneTel: +94 112427003 [email protected] Level 26
Director (Investment Promotion)
Mrs. Nilupul De Silva Tel: +94 112427042 [email protected] Level 26
Director(Business Intelligence Unit)
Mr. Vidharshan Fernando Tel: +94 112427050 [email protected] Level 26
Project Appraisal
Director(Services and Utilities)
Mr. Nelson KumaratungaTel: +94112427093 [email protected] Level 24
Director (Manufacturing)
Mr. Udaya WijayakulathilakaTel: +94 112427093 [email protected] Level 24
Senior Deputy Director(Tourism, Knowledge Services
& Agriculture)
Mr. Gamini JayathilakaTel: +94 112427090 [email protected] Level 24
Senior Deputy Director (Apparel)
Mr. H SenevirathnaTel: +94 112427094 [email protected] Level 24
Senior Deputy Director(Infrastructure)
Mr. Ranjan SiberaTel: +94 112427086 [email protected] Level 24
Project Implementation
(Project Implementation) Mr. Duminda Ariyasinghe Tel: +94 112427032 [email protected] Level 26
Executive Director (Project Implementation)
Mr. Duminda Ariyasinghe Tel: +94 112427032 [email protected]
Level 26
Senior Deputy Director (Project Implementation)
Mr. Ajith WijeweeraTel: +94 112427399 [email protected]
Level 26
Monitoring Executive Director(Project Monitoring)
Mr. Shivan De Silva Tel: +94 112427203 [email protected]
Level 26
Director (Project Monitoring)
Mrs. Chandrani Samarakoon Tel: +94 112427345 [email protected]
Level 26
Thank you
