INVESTMENT PROMOTION DEPARTMENT. DIlip Samarasinghe - Director (Media & Publicity) Board of Investment of Sri Lanka

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1 INVESTMENT PROMOTION DEPARTMENT DIlip Samarasinghe - Director (Media & Publicity) Board of Investment of Sri Lanka

2 Country Profile Island Nation of Sq. Kilometers Population of 20 Million Strategically connected to major shipping and air routes to the East and West Absolute Political Stability GDP Value US$ 67 billion (2013) GDP Growth Rate of 7.3% (2013) FDI (2013) - $ 1.39 Bn. Per Capita Income US$ 3,280 (2013) Literacy rate 92% Never defaulted on international debt obligations Sea Routes Air Routes

3 Healthy Economic Base Sources: Merrill Lynch - financial management and advisory

4 Business Environment Total Foreign Ownership of Businesses No restrictions on the Repatriation of Earnings Safety of Foreign Investments Guaranteed by the Constitution Strong Intellectual Property laws in line with WIPO regulations National Treatment is guaranteed Signatory to the Multilateral Investment Guarantee Agency (MIGA) of the World Bank. Investment Protection Agreement and Double Taxation Relief Agreement with over 25 countries including China.

5 Preferential Market access Free Trade Agreements with India & Pakistan Indo-Lanka FTA Pakistan-Sri Lanka FTA - 100% Duty free access to India for 4,232 products - 100% Duty free access to Pakistan for 4,686 products Products with 35% value added are considered Sri Lankan and can access these two large markets. Free Trade Agreement with China Under negotiation 斯中贸易免税协议正在商榷

6 Factor Costs - Competitive with Asian Neighbours Sri Lanka India Thailand Vietnam China Indonesia Myanmar Labour (US$ Monthly) Shop floor Managers 885 1,431 1,597 1,020 2,001 1, Power for Business (US$ per Kwh) (24x7 power) (1) (2) Water Business (US$ per cum) 0.46 (1) 0.65 (2) (1) 0.39 (2) Office rent (US$ per sqm) Housing (US$ per month) 1,600 Telephone - Local (US$ per min.) 2,791 4,652 (1) 1,580 (2) 2,687 2,600 2,700 2,428 6,829 1,700 2,500 2, Internet (Broad band) (US$ per month) ,500

7 Labour Force % of the population - Men 67.8%, Women 33.4% Reputed for its precision, quality and productivity Skilled and semi skilled workers at competitive wage rates Renowned for high calibre professional skills World class reputation in the production of high end garments and lingerie markets Second largest pool in the world of UK qualified Accountants (25,000) and Accountancy students Graduates (per annum) Science Engineering Management & Commerce Computer Science IT/ICT Architecture/QS Law Medicine Vocational Training (Per Annum) Diploma Holders - 90,000

8 Ease of Doing Business Rankings 2013 Sri Lanka India Bangladesh Vietnam China Indonesia Ease of doing business (overall) Starting a business Trading across borders Resolving Insolvency Source : Doing Business World Bank /IFC

9 Logistic Advantage Kankesanthurai Port (KKS Port) Ports Development Colombo South Port Hambantota Port Galle Port to a Tourism Port Oluvil Port KKS Port Trincomalee Port South Port Colombo Port South Port Oluvil Port Galle Port Hambantota Port

10 Airports KKS Palali Mattala International Vavunia Airport Trincomalee Domestic Airports to be renovated Aviation Hub Mattala 2nd international airport Modernisation of the Katunayake International Airport Hingurakgoda Sigiriya Polonnaruwa Batticaloa Ampara Colombo Ratmalana Katukurunda Mattala International Airport Koggala Weeravila

11 Airports Contd Flights from Sri Lanka to other major destinations City Flights Per Week India (All Cities) 97 Dubai 39 Singapore 21 Bangkok 16 Kula Lumpur 16 London 13 Hong Kong 09 Paris 04 Frankfurt 04 Beijing 04 Kunming 03 Shanghai 02 Total number of flights per week from Sri Lanka - 464

12 Expressways & Highways Jaffna Northern Highway Colombo - Katunayake Expressway (25km) Southern Highway (130km) Outer Circular Highway (28km) Colombo - Kandy Highway (98km) Katunayake - Padeniya - Anuradhapura (153.3km) Katunayaka-Anuradhapura Highway Anuradhapura Colombo-Katunayaka Highway Kandy Colombo-Kandy Highway Colombo Outer Circular Highway Southern Highway Southern Highway Extension Matara Matara Hambantota Hambantota

13 Quality of Life Health Care up to International Standards World-class Education Prestigious Hotels / Leisure Facilities Modern Office Complexes Luxury Residential Apartments Finance and Banking Sri Lanka China Thailand Indonesia Vietnam India Bangladesh Myanmar Human Development Index Ranking (HDI) Source :Human Development Report 2013

14 Transforming Sri Lanka into a strategically important economic centre

15 Tourism Sector Opportunity Sri Lanka targets over 2.5 million tourist arrivals by Need for infrastructure to be enhanced to achieve its targeted room capacity of 36,000 by Government plans to provide attractive incentives to attract local and foreign investors. Increased focus on also developing Sri Lanka s fast emerging domestic tourism sector The opportunity; Tourists Arrivals 2013 over 1.27 million Opportunity Source: Sri Lanka Tourism Development Authority #1 destination in the World to visit in Lonely Planet

16 Thrust Sectors Manufacture especially high tech industry, heavy industries and pharmaceuticals. Export oriented services Export of knowledge based services (BPO/KPO) Infrastructure projects Urban infrastructure and commercial housing Higher education / skills development Research & Development projects/ especially Nano technology servicing for foreign investors/companies Tourism & Leisure Value added strategic projects Agriculture / Agro processing/ Dairy development/ Fish based industries

17 Main Role of BOI Investment Promoter Investment Facilitator Owned and operate 12 Export Processing Zones Encourage and promote foreign investment Liaises between Investor and Ministries / Line Agencies / Other Approving Authorities Provides incentives tax holidays and other benefits Provides Investor After-Care. A One-Stop-Shop for Investment in Sri Lanka Availability of online application system World Trade Centre

18 Highly Developed Zones favour Investment Mullaitivu Tourism Zone Kuchchaweli Sampur Existing Zones Proposed Zones Welikanda Heavy Industry Zone Agricultural Zone Sooriyawewa Mirijawila Industrial Zone Mega Cluster Development Zone

19 Incentives for Investment Category Qualifying Criteria (Minimum Investment in fixed assets) Tax Holiday (Years) Small Scale -Agriculture - Services (only for selected sectors) Medium Scale -Manufacturing - Agriculture - Services (only for selected sectors) Large Scale -Manufacturing - Agriculture - Services US $ 0.25 Mn 4 US $ Mn 4-6 US $ Mn 6-12

20 Incentives for Investment contd... Exemption on Value Added Tax (VAT), Custom Duty, Port & Airport Levy (PAL) on Imports of all Capital goods and Project related items during the Project Implementation Period Exemption from Exchange Control - For Companies that export goods (Minimum 90% of total output) and - For companies receiving earnings in Foreign Currency for export services (Minimum 70%) No Withholding Tax on repatriation of Dividends during Tax Holiday Period Tax Holidays of up to 25 years, and waivers from other local taxes and levies,for Mega Projects

21 Incentives for Investment contd... Logistic Hub Operations A new Finance Act to exempt the application of Customs Ordinance, Import Export Control Act and the Exchange Control Act to enterprises recognized by the Board of Investment as companies engaged in: (a) Entrepot trade (b) Off-shore business (c) front end services (d) Headquarters operations (e) Logistic services

22 Incentives for Investment contd... Strategic Development Projects Extremely selective mechanism Considering National interest, Shangri-La Economic and social benefit to the country and Ability to change the Economic landscape of the country. Full or partial exemptions from a range of legislations related to Tax and Levies Final Approval from the Parliament Hyatt Regency

23 LAND MARK PROJECTS - IT/BPO

24 LAND MARK PROJECTS - FOREIGN UNIVERSITIES

25 LAND MARK PROJECTS - HOTEL & LEISURE Shangri-La Hotel - Colombo & Hambantota Investment Colombo - US$ 408 Mn. Hambantota - US$ 120 Mn. Current Status Under Implementation (Colombo) Under Construction (Hambantota) Business Activity Roomed Luxury Hotel & 300 Apartments (Colombo) Roomed Luxury Hotel & 50 Villas (Hambantota) Hyatt Regency - Colombo Investment US$ 158 Mn. Current Status Under Construction Business Activity 475 Roomed Luxury Hotel 90 Service Apartments

26 LAND MARK PROJECTS - HOTEL & LEISURE Hotel Sheraton - Colombo Investment US$ 80 Mn. Business Activity 306 Roomed Hotel Current Status Under Implementation Hotel Marriott - Weligama, Matara Investment US$ 30 Mn. Business Activity 200 Roomed Luxury Hotel Current Status Under Implementation

27 LAND MARK PROJECTS - HOTEL & LEISURE Water Front Properties - JKH Investment US$ 650 Mn. Current Status Under Construction Business Activity High end shopping mall, residencies and service spaces with associated facilities

28 LAND MARK PROJECTS - MIXED DEVELOPMENT Eon Resorts Colombo Investment US$ 170 Mn. Current Status Under Implementation Business Activity Mixed Development Project Number of floors: 45 Indo Ocean Property Development Colombo Investment US$ 111 Mn. Current Status Under Construction Business Activity Mixed Development Project Number of floors: 70

29 LAND MARK PROJECTS - COLOMBO PORTCITY Reclamation and development of Port city (233 Ha) Colombo Investment US$ 1,337 Mn. Current Status Under Implementation

30 LAND MARK PROJECTS - HEAVY INDUSTRY ZONE Heavy Industry Zone Sampur, Trincomalee Estimated Project Cost Total US$ 4 Bn Phase 1 - US$ 700 Mn. Business Activity Zone Development Land Extent 818 Acres

31 New Tourist Attractions Arcade Independence Square - Colombo

32 Tourist Attractions Contd Dutch Hospital - Colombo

33 Tourist Attractions Contd Pettah Floating Market - Colombo

34 Tourist Attractions Contd Diyatha Udana - Battaramulla

35 Tourist Attractions Contd Colombo Racecourse - Colombo

36 SRI LANKA YOUR NEXT INVESTMENT DESTINATION THANK YOU w w w. i n v e s t s r i l a n k a. c o m