Sri Lanka is truly a great place to live and a great place to work. A country of many facets, if offers a spectrum of experiences, people and places that awaits to be discovered. For those who choose to make Colombo their home, a cosmopolitan living environment awaits. Social life is never a miss in this city, with abundant nightlife, world-class shopping, theatre, cafes, art and host of star class hotels that dot the island.
Strong Resilient Economy
- Peaceful domestic environment, favorable government policies and improved investor confidence have facilitated all the key sectors to demonstrate a commendable performance.
- The improved performances in all key sectors of the economy contributed towards the high economic growth.
- With a 56.8% contribution, the services sector remains the largest contributor to the national economy.
- The strong economic performances in Sri Lanka have lifted country's per capita income substantially, which has enabled the country to be graduated to middle – income status from the list of Poverty reduction & Growth Trust (PRGT) eligible countries.
- The government has planned to transform Sri Lanka into a strategically important economic centre by developing five strategic hubs; a knowledge hub, a commercial hub, a naval & maritime hub, an aviation hub, and an energy hub, taking the advantage of Sri Lanka's strategic location & resources.
Supportive Government Policies
Sri Lanka pioneered South Asia's economic liberalization over three decades ago. Liberalizing many areas of the economy, the government has embraced strategies and policies that are more than conducive for international investment. In fact the policy environment is undoubtedly, compelling.
The following transparent investment laws aim to foster foreign direct investments.
- Total foreign ownership is permitted across almost all areas of the economy.
- No restrictions on repatriation of earnings, fees, capital, and on forex transactions relating to current account payments.
- Safety of foreign investment is guaranteed by the constitution.
- Existence of a transparent and sophisticated legal and regulatory framework. Covering all prerequisite business law enactments.
- Bilateral investment protection agreements with 28 countries and double taxation avoidance agreements with 38 countries
Sri Lanka is a founder member of the Multilateral Investment Guarantee Agency (MIGA), an investment guarantee agency of the World Bank. This provides a safeguard against expropriation and non-commercial risks.
Index of Economic Freedom measures the pro-business policy environment of a country. According to the Index of Economic Freedom – 2014, the country has been ranked 90 of 186 countries
Educated and Adaptable Workforce
Sri Lanka possessed the most literate population in South Asia and one of the highest in the developing world with a literacy rate of 92.2% (91.1% and 93.5% respectively for females and males).
Extensive investment in public education has produced a workforce that is not only competent but intelligent, trainable and comfortable with high tech production and services.
Approximately 50% of the students who have completed higher education are trained in technical and business disciplines. English is widely spoken and is the main language used by the business community.
Well educated and energetic, skilled and semi-skilled human resources are readily available at competitive wage rates.
Social Infrastructure
Sri Lanka leads the South Asian region in human development indices with its high literacy rate and national health indicators. The country boasts a life expectancy of 70.3 years for males and 77.9 years for females and an infant mortality rate of 8.5 per 1,000 live births, which ranked it 92 of 186 countries.
Sri Lanka is a firm proponent of international laws and UN's rights of labour, children and women. The country has an edge over its regional competitors because of its stringent adherence to child labour laws and endorsement of gender equality.
Location and Connectivity
Sri Lanka is situated at the crossroads of major shipping routes connecting South Asia, Far East and the Pacific with Europe and the Americas. Sri Lanka is strategically located next to the fast growing Indian sub-continent with close proximity to Southeast Asia and the Middle East. The country has strong air connectivity with over 100 weekly flights to India alone.
Sri Lanka is 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.
Access to Key Markets
Sri Lanka is the only country to have Free Trade Agreements with both India and Pakistan, giving duty free access to over 1.3 billion consumers from the island.
The Indo-Sri Lanka Free Trade Agreement (ISLFTA), which came into effect in year 2000, provides strategic access from Sri Lanka for over 4,200 products (at zero duty) to India, which is the world's second most populous market. The Pakistan – Sri Lanka Free Trade Agreement (PSLFTA), which came into effect in year 2005, provides strategic access from Sri Lanka for nearly 4,500 products (duty free from 2008) to the Pakistan market.
Since the agreement was signed bi-lateral trade between Sri Lanka and India have grown more than 5 times and bi-lateral trade between Sri Lanka and Pakistan have grown 3 times.
In order to qualify under the two free trade agreements products need to be wholly produced or have a domestic value addition of 35% value addition FOB level.
The HScode transformation needs to be at the 4 digit level for the ISLFTA and 6 digit level PSLFTA. Both agreements require sufficient process. For more details, please click here : ISLFTA , PSLFTA.
In addition, 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 the Asia–Pacific Trade Agreement (APTA).
Fast Developing Infrastructure
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. The following are the main features of this program:
1. Sea Port and Airport Development
The Sri Lankan government has declared its intention to develop the country as a leading regional aviation, navigation and trading hub in South Asia. Therefore, the development of maritime & aviation transportation is at the forefront of the government's infrastructure development agenda. The focus of these developments is to expand the capacity and improve the efficiency of existing ports through modernization and construction of new ports and airports in strategic locations.
Major Sea Port and Airport development:
Colombo South Port Expansion
The Colombo South Port expansion project with three terminals, each terminal having capacity of 2.4 million TEUs per annum, will increase the capacity of the Colombo Port by 160% upon completion. Construction work of the breakwater has been completed. The first terminal, a join venture between the Sri Lanka Ports Authority and China Merchant Holdings Ltd, was built under a 35 year build operate and transfer agreement with SLPA. The terminal was opened for commercial operation on 5th August 2013.
Vibrant Business Environment
Sri Lanka is ranked as the most liberalized economy in south Asia. In 1978, the Island adapted open market free economic policies, and successive governments have 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. Sri Lankan commercial laws are based on British laws and country has a highly independent judicial system.
Sri Lanka has dynamic and resilient private sector, which if necessary can be joint venture partners for foreign investors. However, foreign investors are allowed to own 100% ownership of a investment. Concessions granted under an agreement with the Board of Investment – for qualifying investment projects - remain valid over the lifetime of the enterprise.
Investment Protection and Double Taxation
Sri Lanka is the one of the safest countries in the world to invest in due to a number of mechanisms in place to protect investors. Article 157 of the island's constitution guarantees the safety of investment protection treaties and agreements approved by parliament by a two thirds majority.
Sri Lanka has signed bilateral Investment Protection Agreements (IPA) with 28 countries. The country has a very independent system of courts which can redress any concerns of investors.
Sri Lanka also has bilateral Double Tax Avoidance Agreements with 38 countries.
Quality of Life
Sri Lanka is truly a great place to live and a great place to work. A country of many facets, if offers a spectrum of experiences, people and places that awaits to be discovered. For those who choose to make Colombo their home, a cosmopolitan living environment awaits. Social life is never a miss in this city, with abundant nightlife, world-class shopping, theatre, cafes, art and host of star class hotels that dot the island.
