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.

NEXT PAGE