investment guide of sri lanka
TRANSCRIPT
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Prepared by
Research and Policy Advocacy Department
(In consultation with Sector Teams, Eng. Approvals Dept., Env. Dept. & Legal Dept.)
May, 2013
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Sri Lanka is regarded as a prime location in the Asian region for
foreign investors to setup their business entities. The strategic
location, prudent & pragmatic investment policies, economic &
political stability, low cost of doing business, talented and
productive human resource pool and fast developing
infrastructure facilities have made the country an enticing place
for investment.
Encouraged by the country's pro business environment, over
2,500 foreign companies representing more than 50 countries
have invested mainly in the manufacturing and service sectors in
Sri Lanka.
In order to ensure the smooth functioning of the business
activities, the Board of Investment of Sri Lanka (BOI) is entrusted
with the task of promoting, attracting and facilitating foreign &
domestic investment into the desired sectors of the economy.
Thus, the Research & Policy Advocacy Department of BOI has
compiled this Guide to Invest in Sri Lanka and a series of
Sectoral Brochures in consultation with the Sector Teams,
Engineering Approvals Department, Environment Department &
Legal Department, to ensure that the prospective investors are
provided with relevant and up-to-date information regarding the
investment approval process prevailing in Sri Lanka and to make
the entire investment process easy, fast and convenient as
possible.
Dr. Lakshman Jayaweera
Chairman/Director General
Board of Investment of Sri Lanka
February, 2013
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20.3
8.5
USD 59.4 Bn
USD 2,923
6.4%
7.6%
USD 9,774 Mn
USD 19,183 Mn
USD 1,338 Mn
75.1 years
72.4 years
79.6 years
92.2% (average)
93.5%
91.1%
0.715
(92 out of 186 countries)
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Vibrant Business Environment
Market-oriented economy
Well-developed financial and banking sector,
including 13 foreign banks
Wide use of English, especially in business,
legal and accounting practice based on the
British system
Large local business community with a long
history in international business links
Large foreign business community in all
business sectors with extensive trade links -
country's total trade was valued at USD
39,000 million in 2012
Colombo Stock Exchange : A growing capital
market
Economic Strength
Natural Resources : scenic beauty, wild life, beaches, fishery, gems, fertile soil, forestry
GDP Growth : 6.4% (2012)
Gross National Savings: 24% of GDP (2012)
Private Investment : 23.7% of GDP(2012)
Total External Assets (Months of Imports): 5.4
Booming Tourism Sector
Over 1 million tourist arrivals in 2012
A target of 2.5 mn tourist arrivals and 50,000 additional hotel rooms by 2016
Accelerated programmes to beautifing cities & lakes, ensuring a greener environment
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Large Scale
Manufacture, Production or Processing
of non-traditional goods for export,
(including deemed exports)
Manufacturing for domestic and/or
export market
Small / Medium Scale
Agriculture, Animal Husbandry or Fishing
(including processing)
Manufacture of any article (including processing)
other than any liquor or tobacco products for
domestic and/or export market
Medium Scale
Large Scale
Agriculture or Forestry
- Cultivation of food crops or industrial crops
- Horticulture
- Forestry
- Animal Husbandry:
Dairy, Poultry, Swine, Goat etc.
- Boats
- Pharmaceuticals
- Tyres and Tubes
- Motor Spare Parts
- Furniture
- Ceramics
- Glass ware or other mineral
based products
- Rubber based products
- Cosmetic products
- Edible products manufactured
out of locally cultivated
agricultural products
- Construction materials
- Electrical/electronic goods
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Small / Medium Scale
- Creative work including work of an artist
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1,2
Development Permit
(Building Approvals)
Work Permit &
Residence Visa
(Ministry of Defense and Dept.
of Immigration & Emigration)
1
If applicable only 2
Refer Infrastructure Brochure for details 3
Residence visa can be obtained at any stage of the process
SIA : Securities Investment Account
FCBU : Foreign Currency Banking Unit
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Work Permits / Residence Visa
As a policy, the BOI recommends granting visas to the foreign investors who have invested in
projects operating under Section 17 of BOI Law and projects operating under normal laws of the
country (Section 16 of BOI Law). On request of these companies, visas are recommended to
expatriates to be employed by these companies based on the following criteria.
a) Non availability of required technical skills or expertise in Sri Lanka
b) Investment made
c) Past performance
d) Nature of the project
To obtain residence visa, it is necessary to arrive in Sri Lanka on an Entry Visa issued by a Sri Lankan
Mission abroad with the concurrence of the Addl. Secretary/(Civil Security) Ministry of Defence
and Urban Development and the Controller General of Immigration and Emigration. The reason to
apply for Sri Lankan Residence Visa has to be mentioned when obtaining the entry visa and
following necessary supporting documents has to be submitted.
1) Company request
2) Visa applications
3) Certified copy of BOI certificate
(Certified copy of the letter of approval for section 16 projects)
4) Certified copy of the BOI agreement
5) Certified copy of the Articles of Association
6) Certified copy of Form I
7) Certified copy of Form 2A
8) A copy of the bio data page of the Passport
Residence visa is valid for one year or period recommended by the respective authority. It can be
renewed annually by submitting an application for the extension to the BOI.
(USD 110)
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1. Corporate Tax Incentives for New Enterprises
1.1 Tax incentives with no minimum investment threshold
1.2 Small Scale Enterprises
1.3 Medium Scale Enterprises
1.4 Large Scale Enterprises
1.5 Strategic Import Replacement Enterprises
2. Project Expansions for Existing Enterprises
2.1 Small, Medium & Large Scale Enterprises
2.2 Strategic Import Replacement Enterprises
3. Strategic Development Projects
4. Import Duty Exemptions
5. Customs Duty , VAT and PAL Exemptions on imports of capital goods
(for Large Scale Enterprises and Strategic Import Replacement Enterprises)
6. Tax on Dividend Exemptions
7. Exemption on Exchange Control
Note : "Under the Inland Revenue Law, these incentives are offered to an "undertaking" as defined in the Inland
Revenue Act. However, for the purpose of BOI, the word "undertaking" is replaced by the word "enterprise" since
the BOI Law requires an investor to incorporate an enterprise before entering into an agreement with the BOI.
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Manufacturing
(Other than any liquor or tobacco
products) for domestic and/or
export market
2
Sector
1. Corporate Tax Incentives for New Enterprises
1.2 Small Scale Enterprises
1.3 Medium Scale Enterprises
1
Amount of Investment means the cost of any land, plant, machinery, equipment and other fixed assets.2
Subject to 35% domestic value addition, If over 50% of production is sold in the domestic market.
N/A : Not Applicable
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44
3
Sale of locally manufactured goods to local market by export oriented companies is allowed up to 40% of the total
annual production subject to payment of 12% corporate income tax (or 10% if domestic value addition is over 65%).
In addition, any other product (other than Garments, towels, bags made out of fabric, linen and curtains) are liable
to pay 12% Value Added Tax and 2% Nation Building Tax.
3
4
I
1.4 Large Scale Enterprises
1.5 Strategic Import Replacement Enterprises
2. Project Expansions for Existing Enterprises
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3. Strategic Development Projects
A Project declared as a Strategic Development Project under the Strategic Development Projects Act,
which is in the national interest and which is likely to bring economic and social benefit to the country
and likely to change the landscape of the country, will be eligible for full or partial exemptions on
following taxes on case by case basis.
(I) Inland Revenue Act No.10 of 2006
(ii) Value Added Tax Act No.14 of 2002
(iii) Finance Act No.5 of 2005
(iv) Excise (Special Provision) No.13 of 1989
(v) Economic Service Charge Act No.13 of 2006
(vi) Customs Ordinance Chapter 235
(vii) Nation Building Tax Act No.9 of 2009
(viii) Ports and Airports Development Levy Act No.18 of 2011
(ix) Cess on importation of raw materials, during the project implementation period, in cases
where the required raw materials are not available in Sri Lanka for the required
quantity.
A special process has to be followed to declare a project as a strategic Development project by the
Parliament
4. Import Duty Exemptions
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Exempted company is entitled to open and operate Foreign Currency Banking Unit (FCBU) in any
commercial bank in Sri Lanka. This facility is applicable for the income generated from the approved
business activity only.
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Exempted/ 0%/ 12%
0.25%
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For large scale or Strategic
Import Replacement
projects PAL will be
differed for plant,
machinery or equipment
during the project
implementation period
For large scale projects
engaged in construction
activities, PAL is exempted
for importation of project
related articles (not being
plant machinery or
equipment) subject to a
negative list during the
project implementation
period
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2,275
775
1,030
Application Processing Fee
Sec. 17
Sec. 16
200
250
Agreement Processing Fee
Original Agreement
- Strategic Development Projects
- Other Projects
Supplementary Agreements
- For Expansions
- For Others
3,000
1,550
520
25
activities set out in the extraordinary Gazette No. 1533/ 16 dated 25-01-2008
All charges are liable to VAT 12%.
*These fees are subject to change from time to time
Annual License Fee
Sec. 16 300
Annual Fee (Per annum)
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Colombo Municipal Council
Town Hall, Colombo 07, Sri Lanka
Tel : +94 11 2684291, 2684290
Fax : +94 11 2684290
E-mail : [email protected]
Website: http: www.cmc.lk
Department of Archeology
Sir Marcus Fernando Mawatha,
Colombo 07, Sri Lanka
Tel : +94 11 2692840, 2692841
Fax : +94 11 2696250
E-mail : [email protected]
Website: www.archaeology.gov.lk
Website: www.doc.gov.lk
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Line Agency Contacts Contd...
www.ird.gov.lk
, 2584984
Department of Railway
P.o. Box 355, Colombo, Sri Lanka
Tel : +94 11 2421281
Fax : +94 11 2446490
E-mail : [email protected]
Website: www.railway.gov.lk
Department of the Registrar of Companies
400 D R Wijewardena Mawatha
Colombo 10, Sri Lanka
Tel : +94 11 2689208
Fax : +94 11 2689211
E-mail: [email protected]
Website: www.drc.gov.lk
Geological Survey & Mines Bureau (GSMB)
569, Epitamulla Road, Pitakotte, Pitakotte, Sri Lanka.
Tel :+94 11 2886289 / 2886290
Fax : +94 11 2886273
E-mail : [email protected]
Website: www.gsmb.gov.lk
Ministry of Agriculture (MOA)
Govijana Mandiraya
80/5, Rajamalwatta Road,
Battaramulla, Sri Lanka
Tel : +94 11 2869553, 2872093, 2872097
Fax : +94 11 2868910
Email : [email protected]
Web Site: www.agrimin.gov.lk
Ministry of Environment (MOE)
82,SampathPaya, Rajamalwatte Road,
Battaramulla, Sri Lanka.
Tel : +94 11 288211, +94 11 2882113
Fax : +94 11 2865452
Emai : [email protected]
Web Site: www.environmentmin.gov.lk
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Line Agency Contacts Contd...
Ministry of Higher Education (MOHE)
18, Ward Place, Colombo 7, Sri Lanka.
Tel :+94 11 2694486, 2697133, 2697721, 2691378
Fax : +94 11 2697239
Email : [email protected]
Web Site : www.mohe.gov.lk
Ministry of Indigenous Medicine
5th Floor, Ayurveda Teaching Hospital Complex,
Dr, N.M. Perera Mawatha, Colombo 8, Sri Lanka
Tel : +94 11 2 676376
Fax : +94 11 2 676377
Email:- [email protected]
Website : www.indigenousmedimini.gov.lk
Sri Lanka
National Gem & Jewellery Authority
No.25, Galle Face Terrace,Colombo 03, Sri Lanka
Tel : 094 11 2390645 -8 (Gen), 2390653 (Dir)
Fax : 094 11 2390649
E-mail :[email protected]
Website : www.srilankagemautho.com
Ministry of Livestock & Rural Community
Development
No. 45, St. Michael's Road, Colombo 03.
Tel : +94 11 2541369, +94 11 2338278
Fax : +94 11 2328117
Email : [email protected]
Website: www.livestock.gov.lk
Ministry of Power & Energy
72, Ananda Coomaraswamy Mw.,
Colombo 07, Sri Lanka
Tel : +94 11 2574922
Fax : +94 11 2574743
Email : [email protected]
Website : www.powermin.gov.lk
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Line Agency Contacts Contd...
Tel: +94 11 2677445
Fax: +94 11 2682534
E-mail: [email protected]
Sri Lanka Standards Institution
17, Victoria Place, Elvitigala Mw., Sri Lanka
Tel : +94 11 2677445
Fax : +94 11 2682534
Email : [email protected]
Website: www.slsi.lk
+94 11 2875916-8
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10 Sectoral Brochures
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INVESTMENT GUIDE-Cover.pdfPage 1Page 2
INVESTMENT GUIDE-Inner.pdfPage 1Page 2Page 3Page 4Page 5Page 6Page 7Page 8Page 9Page 10Page 11Page 12Page 13Page 14Page 15Page 16Page 17Page 18Page 19Page 20Page 21Page 22Page 23Page 24