Monday, February 7, 2011


New practise for visa extentions?


If you want to stay more then 30 day you definitely should get a 90 day visa at the Sri Lankan Embassy of your home country!

Security - no problem


Almost No crime
Crimes against foreigner are very, very rare. Compared to other tropical countries Sri Lanka is the by far most peaceful and safe place to live. Organized crime doesn't like the tourist areas of Sri Lanka - it's too small and there are too few tourists. Fortunately there is no night life and no prostitution in Sri Lanka. The government does a good job to expell the russian and chinese pimps and prostitute who try to establish their business in Colombo. All the tightening of visa regulations in the last few years are targeted at this!
And it's very difficult to get a liquor license - that's why you don't see many bars on the beach.
This attitude against prostitution and alcohol makes Sri Lanka very unattractive for criminals and semi-criminals from all over the world. That's why the foreign residents almost all are decent and straight people from 45 - 75 years who just want to live a quiet peaceful live.

Not affected by terrorism
Many people who are not familiar with Sri Lanka are afraid of terrorist attacs. They don't need to!
Since the fighting between the Tamil Tigers and the Sri Lanka army startet in the north and east in 1982 tourists never have been a target - unlike in Bali or Egypt for instance. Foreign residents have lived in Sri Lanka during about 20 years of continuous fighting and had no problems themselves. Why? Because the north and east are 10 hours by bus away from where tourists live. Only that no bus is going there. The areas are closed, the roads are blocked.
There have been very few comparatively small bomb attacks in the last 25 years. Some in Colombo (which has a rather tight and well working security concept since quite a few years), most close to the troublesome parts of the country (where you wouldn't even accidently be) and exactly one in the southwest (boat from the sea attacks high security military harbour - even if you had tried hard you would have had no chance to get involved). The risk for foreigners has always been very, very low.
In daily practise you only read of the trouble but you don't feel it. Just like at home. The risk of getting in the line is definitely lower than the risk of your holiday plane crashing into the ocean or to get hit by lightning in a summer storm - which means: you really don't have to be afraid.



100 m coastal construction ban lifted

(Following text was found on the official Sri Lankan Government website www.ejustice.lk on 09.11.2005)

"Government of Sri Lanka lifts the construction ban in 100 m coastal zone. The Govt. has decided to revise the 100/200 metre buffer zone implemented for the coastal belt of tsunami affected areas following the 2004 December tsunami devastations with immediate effect.
Under this new set of rules envisaged by the Government this buffer zone has been reduced to a range between 55-25 meters in the Southern Districts and 100 to 50 meters in the North East.
Centre for Environmental Justice filed a law suit in the Court of Appeal against the Cost conservation Department(CCD) to protect 10 meter -140 meter wide coastal belt which was identified by the CCD since 1997 after considering number of scientific parameters.
16/10/2005

100% tax still in power


Still foreigners have to pay 100% taxes on the value of a property that they have bought in their name.
In practise most foreigners don't buy in their name but lease for 99 years, which is tax-free. To make sure that they can sell their lease or sell the freehold of the property any time to anybody there have to be additional paragraphs in the Deed of Lease and - more important even - a set of contracts binding the official owner to really go along when it comes to selling.
See the overview of the Lankaland consultancy services here.



100% TAX RE-INTRODUCED

(09.09.2004)
The government has re-introduced the 100% tax for foreigners buying property in Sri Lanka. From now on a 50,000 EUR property costs another 50,000 EUR in taxes. Plus 4% stamp duty.

Our recommendation: it is illegal to put a false price in your contract of transfer to avoid taxes. If you buy a rather "cheap" property some people might have a problem believing the price. To make sure that nobody has a chance to discuss your official buying price you should get an "evaluation report" by a licensed surveyor (or better even two). Talk about a fixed price before hiring the surveyor.

If you don't want to buy and pay 100% tax alternatively you can also lease for a period of 99 years. No taxes, only 1% stamp duty. You can build and demolish anything on your land during that period of time. There is a way to make sure you can buy the property anytime later from the owner even if the owner might have changed his mind.

A second way to get full ownership without paying 100% taxes is by founding a specific kind of Sri Lankan company and become a 99% share holder. There are specialised agencies offering that service. Because of the costs (typically initial 1,400 - 2,000 US$, after that 1,300 per year). This system usually is considered by investors who spend more than 100,000 US$.

Copyright: Reiner Niemeyer, 2004-2006

THE PEOPLE

Nowhere in the world you find as many open, friendly and helpful people as in Sri Lanka. Here they welcome the foreigner - whereas in many other tropical countries the foreigner is strongly disliked.
Especially in the rural farming areas starting only a few hundred meters beyond the touristy spots you'll encounter - and enjoy! - an unspoiled kind of Sri Lankans whom you will like immediately.
One of the reasons to come to this tropical paradise is the optimistic and relaxed attitude of most of the locals.

Copyright: Reiner Niemeyer, 2002, 2003.

VISA

When is the season?
Practically all foreigners stay up to 5 - 6 months per year in their house - from November through March. That's the season from Negombo to Tangalle (west, southwest, south coast).
Mid April Sri Lankans celebrate New Year - a big turmoil and chaos. It's better not to be in Sri Lanka during New Year or the week before.
May, June and July are very hot and wet (monsoon). August is a fine month again, but a little hot. The same is true for September to October. However, high season is during the european winter.

After half a year in Sri Lanka most foreign residents go back to the west where it's nice in spring and summer. And in addition the west has quite a few other advantages, doesn't it?
Why not enjoy the west during the better months of the year and then again look forward to return to Sri Lanka first week of November?

Visa for up to 9 months per year
You get a 30 days visa on arrival free at the airport. You can get a 3 months visa from Sri Lankan Embassies in the west before flying to the island (ca. 40 US$).
When in Sri Lanka you (hopefully still) can extend your visa to 90 days in Colombo (Immigration Office) (40 US$). Better get a 90 day visa in advance from the Sri Lankan Embassy in your home country!

01.11.2006
New visa practise?
In in the past you could fly to Sri Lanka without a visa. They would stamp a 30 day visa into your passport at the airport, and you could extent this visa at the Department of Immigration in Colombo to six months or even more.
Now there are rumours that it can be difficult to get the 30 day airport visa extended in Colombo if you want to stay for more than a month. Sri Lankan embassies recommend on their websides that you get a 90 day visa already at home if you want to stay longer than 30 days!
At the same time there are rumours that you can get a one year visa in Colombo for 850 US$ if you seem to be a decent person.
It's good if you can show that you have been to Sri Lanka (visa!) often (maybe you can also bring your old, invalid passport as proof) and every time left the country without trouble. If you have property (owner or lessor) bring copies of your deed.
You have to have a return ticket and sufficient money (officially you are expected to spend 35 $ per day). As proof for money you can show your credit card.
As a tourist you should not try to fool anybody about your reason of stay: it's holidays. Some have claimed that they are "involved in charity work" - but unfortunately it's prohibited to work even for free with only a tourist visa. So please forget all the lies and tell the truth. You are in Sri Lanka to enjoy yourself and spend your money on holidays in your little holiday home.

(written March 2006:)
You can also get a visa for 6 months within 2 hours in Colombo for additional 120 US$. A further 3 months (summing up to the maximum of 9 months per year) will cost 120 US$ again.
The exact costs depend on the country you are from.
Average total costs:
1 month = free
3 months = 40 US$
6 months = 40 + 120 US$
9 months = 40 + 120 + 170 US$
For visa extention you have to prove you have sufficient money (35 US$ per day of your stay). As prove a VISA card will be accepted. In addition it's always a good idea to keep all bank receipts when changing money and be able to show it at Immigration.
In 2005 and 2006 visa rules have been tightened. Sometimes visa extensions were refused.

Retirement Residency
Since a long time there were no rumours about this issue. It seems to be out of discussion.

Permanent resident visa
Pay 250,000 US$ and you get one for two years ("Resident Guest Scheme"), if you act as "investor". During these two years you have to prove that you have invested the 250,000 US and that you have spent a lot of money per month (2,000 US$ for you plus 1,000 for each of your "dependents") during the period. If you couldn't find a good investment you can apply for extention (difficult) or try to get the money back from the deposit account (well, maybe that's easy ...).

If you are employed in Sri Lanka, you get one year visa. Your employer has to actively support your application. In practice there is no chance for fake employment: your employer has to be a BOI approved company or be involved in government approved activities.

For certain health reasons you can get a year.

When you are married to a Sri Lankan you can get residence visa and have to renew it regularly.

If you have a B.O.I. approved business, you and your "attached housewife" will get a resident visa and have to renew that every year. For BOI approved business you need a mimimum investment of 50,000 US$ (in practise 150-250.000 US$), and you are subject to bookkeeping and controls. You need lawyers and accountants to do all that.
It has become very difficult to start a BOI approved business with little investment. Particularly in tourism there is little chance to get BOI approval for project smaller than let's say 250,000 US$.

Copyright: Reiner Niemeyer, 2002, 2003, 2004. 2005-2006



BUYING PROCESS

You decide, which property you want to buy.
A standard kind of contract will be written (takes 3 days).
The lawyer has the obligation to check the present state of the deed of ownership at the Land Registry. That takes 3 - 14 days (up to deed situation and lawyer/money you want to spend on the research).
Seller and buyer meet in front of the lawyer to sign the contract and hand over the money. The location mostly is the lawyer's office, but sometimes a hotel or private house (quite a few sellers don't want family members or neighbour to know that they sell something and have money in their pockets.)
The transfer is valid from moment of signature.
The lawyer will get the property registered in your name. That takes 1 - 4 months. It's difficult to speed it up registration.

All property is bought with cash money. No local sellers will accept cheques or bank transfers. They don't want anybody to know how much money they have in their hands.

Copyright: Reiner Niemeyer, 2002, 2003.



ADVANCE?

Probably you don't have 40,000 US$ in your pocket. The prove you want to buy a property you might deposit 10 - 20 % of its value - there are various options how to do that and secure the money by a lawyer, trustee or other middleman.
The shorter the period between advance and final buy the better. Don't let too much time for the sellers to get "new ideas".

For the final buy you should be present in Sri Lanka. One can find lawyers who write up all contracts and accept that you are represented by a trustee who enjoys the power of attorney issued by you - but this is a "rare" procedure among private persons and involves extra costs (according to the quality of the lawyer and the trustee). On the other hand it save you an additional airfare.
Copyright: Reiner Niemeyer, 2002, 2003.



TAXES - FEES - EXPENSES

All transfer costs (lawyer, stamp fee, tax, registration) are calculated on the grounds of the selling/buying price that is written in the contract.

If you have a certified document by a court licensed lawyer you can prove that the figures in your contract are not lowered for tax evasion purposes.

Stamp fees for taxes and registration:

100% taxes if you are a foreigner buying property in your name
4% stamp duty
3-4% of buying price for lawyer
So you practically spend about 108% of the buying price in expenses in a normal procedure with an average local lawyer.

As in the west there are lawyer who are also able to handle more complicated matters (e.g. involving trustees, power of attorney etc.) and - here - have certain influence to speed up the process. Those lawyers / attorneys at law might ask higher fees. So, as ever, it's a good idea to ask for the price before you decide.
Copyright: Reiner Niemeyer, 2002, 2003. 2006



FINANCING AND BANK LOANS

No seller will accept a by and by payment - he wants his money all at a time, and cash.
No Sri Lankan bank will help you finance any property or loan money to you. Mortgage? Forget it.
No foreign bank will help you either.
So you have to have the money in your pocket.



BROKERS AND MIDDLEMAN

The commission
(Updated 04.01.2005)
Varies from property to property (depending on the local partner involved). Middlemen or brokers often are paid only by the seller. Others ask a commission from seller as well as from the buyer.
Copyright: Reiner Niemeyer, 2002, 2003, 2004, 2005.



MONEY TRANSFER

All deals have to be done in rupees. That is the legal way.
There are various ways to get larger sums into the country: by opening a bank account and send the money from home or by using the services of a lawyer as a trustee who has a foreign currency account (those can be found in Colombo only).
For smaller sums (e.g. advances) cash or traveller cheques are handy. Money can be drawn by VISA or sent by Western Union (highest fee!).
It's a good idea to have someone at home who is entitled to send money from you bank account at home by telex bank transfer (SWIFT) to Sri Lanka. Find out the SWIFT code of the Sri Lankan bank branch. It makes things one or two days faster. A SWIFT transfert shouldn't take longer than 5 work days.



RESIDENCE - ENCLAVE - HOTEL?

Private residence / house
Most foreigner live in their own houses on their own land. They come for five to six months in the winter. Hardly any house is used from May through October - yet.

Today holiday home, later retirement
That's what most people plan - and finally do. Most of the winter residents of Sri Lanka are beyond 55.

Enclaves - the foreigners "cluster" settlement
For a foreigner it's best to live next to others of his kind. So why not build 3 - 8 houses on a larger land, share the care-taking, the gardener and the security and maybe a large swimming pool with others?
As a rule of thumb: for a house and you own garden you need 500 - 800 m² in such an enclave to be more than private.

Copyright: Reiner Niemeyer, 2002, 2003.



STARTING A BUSINESS

Start a guesthouse or hotel
Why not? It's very easy when you have a local partner (who owns 51%). Officially you are welcome as an investor - but you are not allowed to work in Sri Lanka, even if you own a 49% share of a business.

Business without local partners
That's rather difficult. You face a complicated approval procedure at the Board of Investment (B.O.I.).
Information: http://www.boi.lk/Splash/index.asp

BOI businesses can be very rewarding - but you need professionals to help you with the approval process as well as with maintaining the business according to the BOI rules. There are specialised consultants offering those services.

Taxes
144,000 Rs per person and year tax free. Maximum taxation 35% (figures of 2002).

Copyright: Reiner Niemeyer, 2002, 2003.



CONSTRUCTION

Building a new house in an ideal design
From the experience of many others there are some factors to be called "ideal":

large veranda
master bedroom with high concrete ceiling
attached bathroom with hot water (lower ceiling)
living-/working-room
walk-in closet for dry and good smelling cloth
utility room, serving various needs - accessible independently from outside, used as room for the caretaker in the off-season
kitchen with access to veranda
Few limitations to construction
In Sri Lanka you can almost build as you like and where you like.
Draw a plan, have it redrawn by a local architect and file for approval. It will be granted without bribing anyone.
Only at the beach there are some restrictions: you may not build higher than a coconut tree, and you can't build high walls to the beach. Beach is public property so you are not allowed to block public access to the beach.

Costs
Up to the quality. You find prices in new papers and should enquire in your community.

Contractor
Good contractors with reputation can be found.
When you build, you should expect a minimum of 6 months for the construction.
If you don't want to control and supervise the contractor, you should hire a qualified supervisor.
Renovating and altering an existing house
No problem. You need a new bathroom and an altered kitchen to move in. If you have the time, get the roof brushed up - thats the important part of the house here.
You'll find contractors or neighbourhood craftsmen to do the job.

The colonial house
Do you like oldtimer cars? They might not be a fast or reliable as a brand new contemporary one - but they have charme and need loving care. Same with old houses...
They can be turned into a modern time beauty, but you need love, time and money. But again: the daily salary of craftsmen is very reasonable
Check the roof! Everything else is minor.


Why not build a brand new colonial style house?
Yes, that can be done! There is a successful example you could see in Galle: the "Dutch House" (next to the "Sun House") on Upper Dickson Road. They have built a replica of the existinc 18th century house next to the original. You can't tell the difference. What a great place. Visit www.thesunhouse.com/doornberg.html

Copyright: Reiner Niemeyer, 2002, 2003.

Beach house
Do you want to live at the beach?
You'll have to fight corrosion there.



This roof is 1,000 m off the beach. The zinc plated hook under the roof looked like that after 3 years:



White "Asbestos" is harmless!
The asbestos sheets consist of not friable chrysolite (white asbestos) cement. In contrast to the amosite and crocodilite based asbestos (blue fibre asbestos) that is used in the west for insulation purposes the chrysolite material is not considered a health risk or carcinogenic (see EHC53 of WHO/IPCS).
Even the process of manufacturing (WHO EHC 203) is 10 - 15 times less "dirty" than the health risk level of the WHO. The dangerous asbestos varieties have never been produced in the tropics.
So you don't have to think about removing asbestos sheets on the roof or as a ceiling. Quite the contrary.



Ceiling with flat asbestos sheets



Roofing options

A - Old time roof: U-shape tiles on a construction of wood. That's how they did it in the colonial times. Unfortunately these roof always leak and are very troublesome. Looks nice, but nobody wants that kind of roof, frankly.



U-shape tiles - these are new



Typical "old" roof - always leaking

B - Flat tile roof: modern flat tiles from clay like mostly used in the west. The tile are supported by wooden construction. No leak problem (when grade 1 tiles are used; grade 2 vary in size and are not as hard). Looks okay (though without the colonial charme) from the outside. From the inside it looks okay for a veranda roof, but in the house you don't want to look at these tiles.



Veranda with plain flat clay tiles

C - Flat concrete tiles: look like the clay ones but are cheaper and more even. Rather ugly from the underside, so they need some cover from underneath.

D - "Asbestos Sheets" (corrugated Chrysolite Cement sheets, "white" asbestos, not friable, no health risk): allows roofs that are much less sloped than flat tile roofs (angle like the old colonial roofs - but without their disadvantages. Best waterproof qualities. May be painted (red or green most common). Looks ugly from top and underside.



The bare asbestos roof is ugly and heats up. One should place U-shape tiles on top - see "Sandwich Roof"



Underside of corrugated white asbestos roofing sheets - ugly. Should be covered with wood between beams

E - "Colonial Sandwich Roof": Asbestos sheets (C) in the middle is the basis of that concept. On top you put the old fashioned U-shape tiles (new or 2nd hand), because they look colonial and absorb the sun, so that with this system the asbestos sheet won't get heated up. But you have to have a stronger framework under the roof to hold the extra weight of the tiles. Underneath the asbestos sheet you nail wooden planks to the wooden framework under the sheets. That kind of roof just looks perfect and is functional as well. Only it costs more.



Sandwich roof - best looking, but most expensive



UPKEEPING - MAINTENANCE

It's not very costly to have a house in Sri Lanka.
In many cases it's enough to have a neighbour look after the place.
The closer to the beach the higher the costs for renovation and repair.

Property Taxes
After having bought your property you hardly pay any taxes for house and land - something between zero and 40 US$ per year.



RESELLING

At present foreigners who sell their properties will sell it to other foreigners. The money transfer will usually be done in western currencies in the west.



COSTS OF LIVING

It's up to you - but it definitely is not as expensive as in the west.

Copyright: Reiner Niemeyer, 2002, 2003.



WHO LOOKS AFTER THE HOUSE IN THE OFF-SEASON?

Holiday properties in Sri Lanka are much less subject to burglary than for instance in Italy or Spain. You don't have to be too worried.
Nevertheless it is a good idea to have someone look after the house:
If you have direct neighbours in a middle-class neighbourhood you mind find one of them trustworthy and reliable enough to look after your house.
Many people hire a night guard - a person who sleeps on the veranda or in a servant room.
A permanent care-taker who also sleeps on the property could be hired as well. He should be responsible for security, garden and the dog. If you want someone to supervise and control your care-taker the costs will rise.
Many foreigners have a family living on their premises: during the season the family moves to their own small house nearby; during off-season they live in the rooms of the foreigner's house. Often the master bedroom and the bathroom will be locked off. Most houses have an exterior servants toilets/bathplace.
The local houses (colonial as well as modern) and the sensibly built houses of westerners have an interior area, that can be locked off, and rooms that can be used by servants during the off season.
Some foreigners give the key to the lock off parts to their care-taker, so he can access these parts of the house for cleaning and ventilating by opening the windows. Others, who are not quite sure (yet) of their (new) servant's quality, might have an external supervisor - mostly a upper middle-class neighbour or a businessman who has no direct relationship (family ties) with the care-taker. The supervisor shows up without notice to check the work of the care-taker. In case of emergency the supervisor is called by the care-taker, checks the situation and contacts the foreign owner.
Copyright: Reiner Niemeyer, 2002, 2003.




FACILITIES OF THE HOUSE

Telephone in the home
Few houses have cable bound telephone. Usually one has a wireless connection - same quality of transmission, fax and internet can be operated immediately.
Connection will be installed within 1 - 2 weeks after ordering it. Leading company is "Suntel".
Getting connected will cost between 100 and 300 US$.
Local calls are cheap, international calls are more expensive than from western countries to Sri Lanka. There is a law on the way (March 2003) to open the international call market and have lower prices.
You can make international calls with call-back-providers, "Net2Phone" etc. for very low rates (check internet for more infos).

Mobile phone
Very good coverage in all coastal areas.
You can select from a handfull of providers and get prepaid services. Leading company "Dialog GSM" (also by Suntel).
You can use your mobile phone from the west.

Internet
You can connect your modem to the wireless phoneline and enjoy 30 KBit connection. There are interenet packages as well as call-by-call services.

Electricity
Practically every house has 220 V electricity (mostly 2-phase, business places 3-phase, which doesn't make a difference nowadays).
Electricity is cheaper than in the west.

Water
All houses (with very few exceptions on the beach) have their own well. With an electric pump you pump the water into an elevated watertank (exterior water tower or under the roof), where it's stored for use.
Westerners usually boil their drinking water before using it.

Toilet
Every house has a toilet pit / septic tank with one, two or three chambers. In most cases only the toilet is connected to that that - water from washing basins, shower or kitchen is directed into the garden.
In the tropical climate bacteria decompose the material in the toilet pit. So toilet pits are not emptied like in the cold west.They also don't smell bad.
Copyright: Reiner Niemeyer, 2002, 2003.



VEHICLES

In areas with tourism many local families who are involved in touristic services own a van and are only to happy to drive you around for little money. You need a mobile phone and five telephone numbers to be completely mobile.
Even more people own the local short distance taxis (threewheelers, also called tuk-tuk). Many have a mobile phone. Most important are the phone numbers of the shops at the junctions where the tuk-tuks wait for customers. Call the shop to send a taxi - that's it.

You don't need a car or a threewheeler yourself! Spare yourself the risk of breakdowns and the trouble of repairs! Better spend your money using local services.

Copyright: Reiner Niemeyer, 2002, 2003.



EMPLOYEES

Plenty of people speak enough English to understand your needs.
Many employees work without contract and without being officially registered. That is legal when someone works on a "day to day" bases (like labourers you hire for gardening or construction projects).
If you hire a permanent employee you should register that employment. When you register and spend an additional 10% of the wages for the EPF you can be sure that after you lay off the employee will not trouble you.
When a Sri Lankan boss lays off an employee he makes sure the employee doesn't loose face. He'd never shout or accuse - just terminate the job from one day to the next.
It's good practice to give a little compensation (half salary) even when the reason for the lay-off is something like stealing. You should have the former employee write a document in his handwriting stating that you don't owe anything and that he has no knowledge of any illegal activity done by you.

In Sri Lanka families and businesses have strict hierarchies. Sri Lankans prefer a clear hierarchy to western style informal "teams" - in fact on the domestic level some people are completely lost with the western idea of team. They prefer to be told what to do and be controlled.

Everybody is used to accept the boss as the boss. Conversation will stop when a local boss steps into vision. Every employee will raise, caps will be taken off the head. Employees try to prevent direct eye contact - western often misinterpret this as a sign of bad conscience, but it is a matter of respect.

Respect the hierarchy within your "work force" - from top to bottom supervisor, care-taker, gardener, night watcher, labourer/helper (mostly daily basis), female servant (or wife of any employee).
When you allow the "lower ranks" to talk to you directly, you intimidate the higher ones. Don't ever openly confront anybody, especially not your most important man. However right you might have been in the eyes of everbody, the moment you make someone loose his face you've made a mistake.
Copyright: Reiner Niemeyer, 2002, 2003.

Respect the fact that many employees want to see in you the "master", "sir"/"madam". Keep enough distance, don't force anyone to be treated "on an even level" - that feels very uncomfortable for employees here (and has spoiled many in the long run).

Be careful with presents. A local boss would hardly give any gifts at all (maybe after years of service a new 5 - 10 US$ sarong for New Year (mid April).

Don't pamper the children of you servants/employees. It intimidating for the parents when the "rich foreigner" gives presents to the "cute little kids" that their parents could never afford.

Don't accept invitations of servants / employees. In fact no local servant would ever have the idea of inviting his boss to his home.

You can accept a little present (coconut or fruit) or flower from the garden as a sign of gratitude and shouldn't feel obliged to return immediately. It does no harm to give little presents like a cup of ice-cream or a little cake (local taste) to your people. Never force them to take from the same plate or bowl as you. Accept when they don't eat the treat at the spot but prefer to take it to their family house.

Hardly any Sri Lanka boss would invite servants / employees to be his guest. Many feel uncomfortable even when they are invited to sit at the table of the boss.

Employees usually will never set foot into your private quarters except when ordered to. Respect that custom. Never, under no cirsumstances, confront anybody with nudity!

Be careful with advances. Giving an advance means a guarantee for a job regardless of the performance of the employee. On the other side advances are necessary in case of emergency. Let your care-taker handle all these matters and discuss with him alone. Make it difficult to get an advance.
Copyright: Reiner Niemeyer, 2002, 2003.



LOW CRIME RATE

Compared to western countries Sri Lanka is very peaceful and safe. When things are stolen from a foreigner's property it often has been the fault of the foreigner himself: careless with values (and everything has a value in this country), careless with false friends.
Make sure your employees have the right attitude. Ask middle class Sri Lankans for advice. Ask employees for recommendation and talk to their former employers.



SECURITY

Look what the local middleclass is doing: a wall is a good idea, but often a fence will do.
Everybody has a dog.
You close your house in the night.
That's all.
In every country in the world there are some neighbourhoods one shouldn't live in. Same in Sri Lanka. Ask locals and western residents which are the less desireable areas.



HEALTH

There is no malaria in the west, south west and south of Sri Lanka.
Snakebites are extremely rare - forget about that.
No other animals will harm you.
In case of health trouble you enjoy a good infrastructure for immediate help. If you should need major attention there is a fantastic private hospital in Colombo ("Apollo"), that attracts "health tourists" from the Emirates, Hongkong and all Asia - it's western standard, fully equipped, very professional - but cheap.
If you need an operation in Europe you should consider to go to Colombo to have it done!
Copyright: Reiner Niemeyer, 2002, 2003.







Sri Lanka - ideal for foreign residents
Many experts think Sri Lanka will become the "Tropical Mallorca" for europeans and asians in the near future. Comfortable and safe living is easy - at very modest prices. More than 200 foreigners own houses in Hikkaduwa alone.
Why Hikkaduwa?
Here you find the best infrastructure to meet the needs of the foreigners. Whatever you need for a comfortable living you will get here: "local" as well as "western" restaurants, supermarkets, building material, tools, cloths, laundry, taxis, internet and much more.
Last but not least you meet a lot of westerners here who share your lifestyle and you can talk to.
In other parts of Sri Lanka you dont find that - yet.

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Sri Lanka the Beautiful
Endless beaches, spectacular hill side, green and flowers like in a botanical garden. This island offers all at close range. From the surf beaches to the cool hill country of Nuwara Eliya or Kandy you only spend a few hours on the bus. Swimming, diving, trecking, eco tours - all that and much more SriLanka will offer you.

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Political Situation and Stability
Although it looked different in the media: SriLankas tourist areas in the southwest were always peaceful and safe.
After 20 years the Tamil conflict in the north and east as come to a halt. Roads to the north and east are open to trade and travel again. The whole country hopes for a stabil peace. But nobody is sure ...
Sri Lanka experts don't recommend property investments for foreigners in the north or on the east coast at the moment.

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Foreigners can Officially Buy and Own Land and Houses!
You can buy land in Sri Lanka freely. This is impossible in most tropical countries. In Sri Lanka you can be the official owner of that land!
Y ou have to pay 100% taxes and fees (plus the normal 7%) after buying property. To avoid misunderstandings and the accusation you have bought for a higher price than stated in your contract of transfer you should better get a evaluation report by a licensed surveyor.

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What to consider...

Sri Lanka is a little different from your home country. The people, the land, the climate require considerations that one gets familiar with by experience. In order to save your time and money I'll happily point out all aspects that could be important to your "settlement" and life in this beautiful country.

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Building a house
There are hardly any restrictions to consider when you plan or build your house in Sri Lanka. And of course it is comparatively cheap. Most materials, that one needs for a western standard house, are now available.
Contractors or single masons, carpenters or electricians can be hired. Recommendations can be given to you by neighbours or other foreigners.

Srilanka Business Startup


BOI Status
1. Question: Can a local investor or company obtain BOI status?
Answer: Yes.

2. Question: Are investment incentives the same for local or foreign investor?
Answer: Yes

3. Question: Is it compulsory to have foreign investment to obtain BOI status?
Answer: No.
BOI Procedure
4. Question: Can a foreign person start a project without coming through BOI?
Answer: No

5. Question: Can an investor obtain approval for BOI incentives (incentives under sec 17) pending submission of the "Site Approval Application"?
Answer: No.
Incentives
6. Question: Is foreign investment in "Wholesale" trading considered without being subject to US$ 1mn minimum investment level?
Answer: No. US$ 1mn minimum investment level of foreign investment applies to all trading projects.

7. Question: What is the criteria for determining export oriented projects?
Answer: 90% of the production has to be exported in the case of a manufacturing enterprise and 70% in the case of a service enterprise. The minimum investment for an export- oriented manufacturing project is Rs. 12.5 mn.

8. Question: What are the percentages of foreign capital allowed for various projects?
Answer: Regulated activities are approved by relevant authority. Apart from 11 activities others are given automatic approval up to 100% foreign investment.
Why Sri Lanka: open sectors/regulated sectors

9. Question: In what areas does BOI promote investment in?
Answer:. Infrastructure, Information Technology, Electronics, Light Engineering, Textile, Garments & Fashion Accessories, Rubber, Agriculture, Mining & Processing, Gems & Jewellery, Tourism, Recreation & Leisure, Services etc.
Opportunities for Investment

10. Question: What are the special facilities given for projects locating in designated (preferred) industrial zones?
Answer: A 5-year tax holiday for enterprises located in designated zones categorized as "Difficult" and an 8-year tax holiday for these located in designated zones categorized as "Most Difficult".
Company Formation/ Registration
11. Question: What is the procedure for Company incorporation and registration?
Answer: As required by the Registrar of Companies.
setting up a company

12. Question: Can a non-national register or run a sole proprietorship business in Sri Lanka Answer: No. The laws relating to business organizations in Sri Lanka do not permit non- nationals / foreigners to run such business. The foreign investors are required to incorporate a resident company in Sri Lanka to run the business. Their investment will go into that company.

13. Question: Under what category of company can I register my business in Sri Lanka? Answer: Under the Companies Act of Sri Lanka, the simplest form is the private limited liability company, which can be incorporated with a minimum of two subscribers (shareholders) who can own the entire share capital of the company. The time frame for incorporating such a company is 10-14 days.
Doing Business with us: Setting up a company

14. Question: When forming a Joint venture can the investor decide on the equity ratio? Answer: Yes, in most areas joint ventures can be formed at the discretion of the local / foreign investors.
Doing Business with us: Setting up a company; joint venture company
Purchase of Land
15. Question: Can a foreigner purchase land or immovable property in Sri Lanka?
Answer: Yes, A foreign investor can either purchase or lease land for any proposed project.

16. Question: How can we obtain land for our project?
Answer: Land is readily available throughout the island at competitive prices. Companies incorporated in Sri Lanka are permitted to own land, irrespective of the company's ownership. Furthermore the BOI has Free Trade Zones / Industrial Parks, which provide fully serviced plots of land on lease. You can have access to the BOI's "Land Bank"- a data base of government and private owned land.
Remittance of capital
17. Question: How can I remit the money inwards initially?
Answer: The money or any other assets for the purpose of business should be brought in only after the approval of the business by the BOI and into the company's bank account. However, if due to valid reasons the money is to be brought in prior to the approval, there are temporary bank accounts available for foreign nationals. Share Investment External Rupee Account is one of the facilities. Any commercial bank in Sri Lanka would assist you in this regard.

18. Question: Any restrictions on repatriation of earnings for foreign investors?
Answer: There are no restrictions on repatriation of earnings, fees and capital and on foreign exchange transactions relating to current account payments.

19. Question: Whether the investors could repatriate their profits and capital without any problems?
Answer: No restrictions as such, however subject to relevant levies.
Doing Business with us: remittance of earnings & capital
Visas
20. Question: How do I obtain a Residence Visa ?
Answer: If a foreign national wishes to be resident in Sri Lanka for the purpose of business or employment he/she should obtain a residence visa from the Department of Immigration and Emigration on a valid recommendation from a state authority. In case of companies where there is foreign direct investment / shareholding, the BOI will recommend residence visas for the expatriates (for investors as well as for their expatriate employees). Foreign nationals intending to reside in Sri Lanka should always give prior intimation to the BOI at least 2-3 weeks before their intended arrival.

21. Question: At what point will an expatriate be eligible for a Residence Visa?.
Answer: Only after the incorporation of the company with the BOI approval of the project and the shares are issued in the names of the investors. Kindly note the shares cannot be issued unless a minimum remittance of US$ 2,50,000.00 is remitted inward to the company.
General
22. Question: Would BOI recommend law firms / management consultants to proceed with filling of the applications, company registrations, connected legal matters, etc for the investors?
Answer: BOI would not recommend any one in particular.


23. Question: Is our investment guaranteed in Sri Lanka?.
Answer: Yes, Foreign investment in Sri Lanka is safeguarded in various ways. Sri Lanka has entered in to separate Investment Protection Agreements with many countries. Sri Lanka's constitution guarantees the safety of foreign investment through these Investment Protection Agreements and Sri Lanka is a founder member of he Multilateral Investment Guarantee Agency ( MIGA).
Doing business with us: investment Protection and Guarantees

24. Question: Is total foreign ownership permitted in all areas of the economy?
Answer: Foreing investment is permitted in almost all areas of the economy. A relatively small number of areas are restricted for foreign investment. Regulations in these areas too are now being relaxed.
Why Sri Lanka: open sectors/regulated sectors