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Investment Opportunities
The Government of
Sri Lanka's industrialization strategy calls for the expansion,
diversification and upgrading of its industrial base, as well
as promotion of foreign investment in virtually all sectors
of the economy. Under this framework, the Board of Investment
of Sri Lanka (BOI) is responsible for promoting investment
in Sri Lanka. It granted a total of 276 investment approvals
up to October 2000. the 171 agreements signed during that
period represented a 4.9 per cent increase compared to the
first 10 months of 1999. the estimated foreign investment
committed by the contracted projects stood at Rs. 14,938 million
($ 192 million), whereas the local investment commitment amounted
to Rs. 25,298 million. these projects have an estimated employment
generating capacity of 35,800 persons.
An Ideal place
for Investors
The business environment
and positive investor friendly policies of the government
offer attractive conditions for investors.
Infrastructure
Private and public
investment programmes have been constantly focused on improving
the country's basic infrastructure facilities, which today
rank as the best available in South Asia.
Business Climate
Comparisons have
shown that Sri Lanka offers one of the most liberal business
environments in Asia. total foreign ownership is welcome in
most areas of the economy. While there are a few areas where
foreign investment is restricted or limited, these are being
minimized. there are no restrictions on the repatriation of
earnings and capital.
The Sri Lankan government
is business-friendly and actively pursuing a policy of economic
liberalization with emphasis on private sector investment.
the private sector plays a vital role in traditional areas
of public investment such as telecommunication, energy and
transport. So far, many government enterprises are in the
process of being privatised.
The Location Advantage
Sri Lanka is the
logical location for manufacturing and service organizations
that wish to establish a presence in what is fast becoming
an economic powerhouse in the region. the island is ideally
located as the gateway to the vast Indian sub-continent, home
to a quarter of the world's population.In addition, trade
barriers are falling throughout the region. the seven countries,
which comprise the South Asian Association for Regional Cooperation
(SAARC), have resolved to progress towards a South-Asia Free
trade Arrangement (SAFtA) over the next 5 years. In addition,
Sri Lanka has agreed a free trade agreement with India covering
1000 tariff codes and is negotiating a similar agreement with
Pakistan.
Investment Protection
and Guarantees
Sri Lanka has developed
an enviable record of "political credibility" in
the international arena. All major political parties are committed
to free enterprise and individual freedom.Bilateral investment
agreements, supported by a constitutional guarantee, provide
strong protection to foreign investment in Sri Lanka. Under
Article 157 of the country's constitution, investment protection
agreements enjoy the force of law and no legislative, executive
nor administrative action can be taken to contravene it.Bilateral
investment protection agreements are valid for 10 years. they
are extended automatically unless terminated by either party.
If the agreements are terminated, investments already made
are protected for another 10 years. A clause in the Sri Lankan
constitution ensures the sanctity of agreements.
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