An Overview of Sri Lanka's Trade Policy
Sri Lanka has been practicing an open economic policy since 1977. The economy has been growing steadily during the past few years with a rate of over 8% in 2014. GDP growth remains one of the healthiest in the region at 7.3% with per capita income at USD 3,191 in 2013. The country also has a high literacy rate of 95.6% and an unemployment rate of 4.4%.
The main exports are textiles and apparel, tea and spices, rubber products, precious stones, coconut products and fish. Sri Lanka is world famous for tea and overseas employment of Sri Lankans is also a significant contributor to the economy. Key imports include petroleum, textiles, machinery and transportation equipment, building materials, mineral products, foodstuffs. Sri Lanka's main markets include USA, UK, Japan, China, India and the Middle East. Among the main import markets are Japan, India, UK, USA, among others.
Sri Lanka has signed Free Trade Agreements with India, Pakistan and China. It is also a member of the South Asian Free Trade Area (SAFTA), APTA, BIMSTEC and a member of the G-15.
Sri Lanka has been successfully moving towards achieving the Millennium Development Goals and has achieved halving poverty, gender equality and education goals.
The Ministry of Industry and Commerce and particularly its Department of Commerce, is tasked with Sri Lanka's trade policy, implantation and promotion, especially overseas.
For more information please visit the following websites:
Ministry of Industry and Commerce: www.industry.gov.lk
Department of Commerce: www.doc.gov.lk
Why Invest in Sri lanka
Sri Lanka has one of strongest economies in the South Asian region, with a growth rate of over 8% in 2014. Strategically located in the Indian Ocean, with a large and dynamic services sector, an educated and skilled workforce, excellent infrastructure and global connectivity, Sri Lanka is an ideal destination for the foreign investor. The country is also fast emerging as an air, maritime, energy, knowledge and commercial hub in the region.
The Government of Sri Lanka has put in place several regulations to promote and protect foreign investment, including total foreign ownership in almost all areas of the economy. There are no restrictions on repatriation of earnings and the safety of foreign investment is guaranteed under the constitution. There is also a sophisticated and transparent legal framework in place. Sri Lanka has signed 28 bilateral investment protection agreements and 38 agreements on the avoidance of double taxation. Free trade agreements with India, Pakistan and recently with China, also provides access to these large markets.
Sri Lanka's export processing zones and industrial parks have been a linchpin in the industrial development and inflow of foreign direct investment into Sri Lanka. The country's economic development zones are seen as benchmarks of successful implementation of zone development strategies.
Sri Lanka’s strategic location in the Indian Ocean is an added incentive for the investor, as it is situated in one of the world’s most important and busiest maritime routes. The country is also well connected by air. The Government has heavily invested in infrastructure and energy. Yet, Sri Lanka is also mindful of environmental protection and sustainable development.
The Board of Investment of Sri Lanka (BOI) is the key institution regarding the promotion of investment and the one stop shop for all potential investors to Sri Lanka.
For further information regarding investing in Sri Lanka, please visit the BOI website on. www.investsrilanka.com
An opportunity for Sri Lankans and well-wishers living in Sri Lanka and abroad to extend a gesture of goodwill towards Sri Lanka and its people
Main Features of the Special Deposit Account
1. Eligible Persons
Persons resident in Sri Lanka or outside Sri Lanka as permitted in the Foreign Exchange Regulations.
2. How to open a Special Deposit Account?
Eligible persons who wish to deposit funds in Sri Lanka may open “Special Deposit Accounts (SDAs)” with an Authorized Dealer (any Licensed Commercial Bank and National Savings Bank) in Sri Lanka in the following manner.
a. With remittances received into Sri Lanka through banking system until 07.04.2021.
b. With remittances received into Sri Lanka through an Inward Investment Account or an account at the Offshore Banking Unit, maintained with an Authorized Dealer in Sri Lanka, to the credit of SDA.
c. Out of foreign exchange legitimately acquired and brought into Sri Lanka by persons who have arrived in Sri Lanka from overseas on or after 01.01.2020 subject to a declaration made to the Sri Lanka Customs (if the amount exceeds USD 15,000) and the relevant Authorized Dealer (if the amount equals to or less than USD 15,000)
d. Out of foreign currency notes in the possession of any person in, or resident in, Sri Lanka, up to the limit of USD 15,000 and subject to a declaration on the source of funds to the relevant Authorized Dealer and applicable Foreign Exchange Regulations, Orders and Directions.
3. Special Features of the SDA
a. SDA is a Fixed Deposit with a minimum tenure of 06 months.
b. Can be opened either in any designated foreign currency* or Sri Lanka Rupees
c. Can be opened as a joint accoun
4. What are the benefits of opening a SDA?
a. Higher interest rate than the rate offered by the respective banks for normal fixed deposits, payable at the maturity.
- for 6-month deposits - 1 percentage point per annum, above the normal rate
- for 12-month deposits - 2 percentage points per annum, above the normal rate
b. Freely convertible and remittable outside Sri Lanka upon maturity.
c. Will not be subject to procedural requirements of Foreign Exchange Regulations published in Gazette Notification No 2045/56 dated 17.11.2017
d. Permitted to transfer maturity proceeds into an Inward Investment Account or a Personal Foreign Currency Account, if the account holder is eligible to open or currently maintains such an account.
e. SDA holders can obtain loans from Authorized Dealers against SDAs as follows;
- Residents, in Sri Lanka Rupees
- Non-residents who are eligible to obtain loans as per the prevailing foreign exchange regulations
f. Continue SDAs beyond the designated date of maturity as normal deposits with Authorized Dealers. The deposits so continued will be eligible only for the interest rates offered by the respective Authorized Dealer for normal term deposits.
g. An opportunity for patriotic Sri Lankans and well-wishers to support people living in Sri Lanka during the pandemic.
*Designated foreign currencies: United States Dollars (USD), Euro, Sterling Pound, Australian Dollars, Singapore Dollars, Swedish Kroner, Swiss Franc, Canadian Dollars, Hong Kong Dollars, Japanese Yen, Danish Kroner, Norwegian Kroner, Chinese Renminbi and New Zealand Dollars
South Asia’s largest manufacturing facility for tyres and radials, Ferentino Tyre Corporation (Pvt) Limited, was opened by President Gotabaya Rajapaksa yesterday (14).
Ferentino Chairman Nandana Lokuwithana said at the opening of the US$ 250 million tyre factory in Wagawatte yesterday that he had been continuously motivated by President Gotabaya Rajapaksa to start the plant without any delay.
“The President not only stressed the need to start the factory but also mobilised and provided all the support the government institutions including the Board of Investments (BoI) can for getting all the infrastructure and other operational aspects in place to ensure its commencement.”
Lokuwithana said that the local manufacturers and entrepreneurs were encouraged by the President’s vision to boost domestic production of goods for the local market and export market. “We believe we can rely on the government’s support in the future too,” he said.
The opening ceremony was also attended by Minister of Industries Wimal Weerawansa and Minister of Ports and Shipping Rohitha Abeygunwardena. The facility constructed with an investment of USD 250 Mn is the brainchild of reputed entrepreneur Nandana Lokuwithana who currently holds Chairmanship of Ceylon Steel Corporation (Pvt) Ltd.
The project is tipped to be the largest such facility in the whole of Southeast Asia manufacturing Passenger Car Radials (PCR) including specialized category for SUVs, two-wheelers, three-wheelers, trucks, buses and solid tyres seamlessly combining local talent with sophisticated European technology.
The new manufacturing plant combines state-of-the-art European technology in tyre manufacturing with local craftsmanship for an optimum, world-class output. The project is facilitated by the Board of Investment of Sri Lanka (BOI) and aims to generate a substantial amount employment opportunities directly and indirectly.
Ferentino Tyres will use locally sourced rubber as a main ingredient thereby compelling the local industry to level itself to deliver to the global expectation. The Phase 1 of the project has already been completed and thus was commissioned while construction of Phase 2 is scheduled to be completed in March 2022.
Lokuwithana also heads the Ceylon Steel Corporation Ltd and Onyx Group in the UAE with a host of subsidiaries including a steel fabrication company. His other investments include: Marriot Al Jadaf Hotel in Dubai, up-coming state-of-the art Cement Grinding Plant in Mirijjawila Hambantota slated to be commissioned in May 2021 and Marangoni Industrial Tyres Lanka (Pvt) Ltd.
Current Calls for Tenders:
Bid forms are available at the Sri Lanka Embassy in 1040 Vienna, Weyringergasse 33 - 35, 4th floor.
Procurement of 25 nos. Disc Cutting Machine, 25 nos. Core Drilling Machines and 100 nos. Aluminium Manual Track Gauges (with Level) to Sri Lanka Railways - Procurement no. SRS/F.7662
Closing date: 22 November 2019
The Procurement Notice may be downloaded here.
Purchase of 50 nos. Non Trailable Electro Mechanical Point Machine for Sri Lanka Railways - Procurement no. SRS/F.7646
Closing date: 26 November 2019
The Procurement Notice may be downloaded here.
REGISTRATION OF SUPPLIERS TO SUPPLY COAL FOR LAKVIJAYA POWER PLANT-NOROCHCHOLI UNDER SPOT AND TERM TENDERS
Chairman, Special Standing Cabinet Appointed Procurement Committee (SSCAPC) of Ministry of Power and Energy, invites you amongst others to register with Lanka Coal Company (Private) Limited to supply of coal for the 900MW Lakvijaya Coal Power Plant at Puttalam. This invitation is extended on behalf of Lanka Coal Company (Private) Limited (LCC).
Lakvijaya Coal Power Plant (The Plant) of CEB requires 2.25 + 10 % Million MT of coal per year. LCC has been contracted by the CEB to supply entire requirement of coal for The Plant. In order to make sure the guaranteed quality supply of coal to The Plant, LCC decided to select internationally reputed coal suppliers and register them as its coal supplying parties. After the eligible coal suppliers are registered the LCC will call bids only from those who have registered to supply coal for The Plant. Therefore in future open bids will not be called, to supply coal to Lakvijaya Power Plant. However to include new suppliers to the registered list, LCC will call applications to register new suppliers. Therefore new suppliers always can be included in the coal suppliers list and update the list. The registration will be done for three years and can be renewed after evaluation on the criteria for registration. This process will help LCC to build the partnership with coal suppliers, so that unnecessary delays in evaluation of Technical and Financial capabilities of bidders can be avoided. Once the suppliers are registered, only the Price Proposals can be invited from the Registered Suppliers. Registration does not guarantee that the registered suppliers will be awarded a coal supply contract. Bidders must win the tender for that.
The application form can be downloaded here.
Ministry of Housing, Construction & Cultural Affairs has mandated the Construction Industry Development Authority (CIDA) to register the Foreign Contractors involved in identified construction work in Sri Lanka, as per the Section No. 39 of Construction Industry Development Act, No. 33 of 2014.
The regulation on Registration of Foreign Contractors has been published in the Gazette no. 2085/19 dated 23 August 2018.
Instruction for registration, fees including the application form relating to the registration process can be downloaded from CIDA website.
Sri Lanka has many assets to attract investors. Among many others, some of them are
- Its geographic key position in the Indian Ocean and on the New Silk Road;
- Its well trained, qualified and high committing staff;
- Best developing country in South Asia and best developing emerging country worldwide (reference: Bertelsmann Report 2018);
- Its stable Democracy, complying to international standards;
- Highest standards of respect and protection of environment and working conditions in South Asia;
The Board of Investment of Sri Lanka (BOI) is dedicated to assist all investors who wish to invest in Sri Lanka or are considering Sri Lanka as an investment opportunity. It was established in 1978 targeting on the development of the surrounding vicinity of Colombo. In 1992, its mandate was enlarged to the entire country.
The BOI has determined six sectors of investment and encourages international stake holders to invest in those domains.
The sectors are:
- Value Added Manufacturing
- Information Technology Enabled Services
- Tourism & Leisure
- Large Scale Infrastructure
If you wish to invest in one of the above or any other domain, BOI will be happy to assist you in
- Visa Facilitation
- Engineering Approvals
- Environmental Clearances
- Legal Services
- Import/Export Facilitation
- Industrial Labor Relations
- Zone Management/ Regional Offices
For further information, please visit www.investsrilanka.com.