Monday, February 7, 2011

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.
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
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.
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

1 comment:

  1. Here wherey ou sa a foreigner cannot set up a company without being BOI is absolutely wrong. They can in accordance with the Extroardinary Gazette.