Doing business with Western Australia

By Cheranka Mendis

Q: What brings you to Sri Lanka?

A: I am here on Holiday. While holidaying in Malaysia, we thought of coming to Sri Lanka. I was here some 15 years ago and the country is quite different to what it used to be.

Q: What does your work involve?

A: My work involves tracking business migrants into Western Australia. China is currently our prime market, followed by Malaysia, Singapore, South Africa, and the UK. Colombo, Sri Lanka is something new. However we have welcomed migrants from 37 countries last year including some from Sri Lanka.

Q: How does immigration work in Australia?

A: The federal government issues the visa and the state government issues what is called ‘nominations’. This used to be called sponsorship before. For business persons, each state must nominate you first before you can apply for the visa.

The whole process begins with you deciding where you want to live and you will then make an application for nomination to the state of your choice; for example Perth. If we approve of that nomination then it generates an invitation to apply for visa.

Q: Is there a special scheme or program for those wishing to migrate on business?

A: The business migration scheme is new in Western Australia and was introduced on first of July. It is called the Business Immigration and Investment program. The way the program works is that the original visa is based on what you do in your own country.

To qualify for coming, we look at your business here in Sri Lanka first and then offer a visa for four years or so according to the area of business. There is one visa which gives you permanent residency right away but requires a minimum investment of approximately $ 3 million.

We have a new vision which was only introduced last month which is an ‘investment visa’. The advantage of these applicants has to spend 160 days in four years or 40 days per year in Australia so they can continue their business in their own country and make investment in Australia. It gives you temporary residency and at the end of four years if you make the criteria of a $ 5 million then you can extend it.

Q: Why should someone chose Perth, Australia for business and investment?

A: Economically, Western Australia has the fastest economic growth at the moment in the country. For business personnel this becomes very attractive. Business people look for business opportunities while others look for jobs. And we have that – we have the highest economic growth and the largest unemployment rate.

Q: What sort of opportunities exists for Sri Lankans?

A: The government allows you to make that choice. For us, economy in Western Australia is mainly threefold. If you take mining and resources, that is mainly for huge investors. The next level down is agriculture. We export 70% of what we grow.

Because of the wage structure, we are not a manufacturing state; we cannot compete with Sri Lanka or Malaysia or China so most of our businesses operate in the service industry. In other words, we provide service to other businesses – accounting, global professional services, tourism, restaurants, hospitality and domestic services.

Q: What are the key opportunity areas?

A: The bulk could and would get involved in the service industry. If you are not managing the investment and simply investing, it would range from property development, investing in companies that may need capital to expand to compete, etc. It is not very different to Sri Lanka except for the manufacturing side.

Q: What sort of support does the government provide for foreign investors coming in?

A: Foreign investors have a couple of different avenues they can work with. They can take government bonds – the rates are bit lower but it is government guaranteed so there is a guaranteed return and your money back at the end.

If you chose to take commercial level fund, then they must seek a matching bank, stockbroker or investor fund. The third avenue is that you can directly invest in a company. This gives the biggest return but has the highest risk.

Q: What is the anticipated growth for Western Australia?

A: The anticipated economic growth is about 5%. We are currently sitting on about 4.4% at the moment. We are dependant to a degree on the prices of resources. Iron ore was up about US$ 160 a ton and is now reduced to about US$ 100.

We are also dependant on the economy in China as most of our sales into China are in resources. However, the good news is that there is no shortage in the foreseeable future in the resources sector. They are discovering more deposits and natural gas, etc. There is no ‘end date’ at the moment.

Currently we are the 10th largest clean gas producer in the world. By 2020, we will be the second biggest producer of gas. As the world is moving towards gas, for public transport etc., we will be fully fledged in this area in the near future.

Q: What are your main exports and key markets?

A: Our biggest trading partner is China presently and they mainly take iron ore. Bulk of the exports goes to Asia – Korea, Japan (biggest trading partner until 2011.) Most of the agri products go to Southeast Asia. Our farmers are starting to grow specific crops that Asians are looking for.

In terms of population, Australia is no bigger than Sri Lanka – 23 million. Yet on our doorstep we have billions of people. The main consumer of our products is Southeast Asia rather than Australians.

 Q: What is the outlook for Asia?

A: We are always going to be fairly well placed and our policies will probably lean towards continuing to supply Asia. We are lucky in a way that everybody has to eat and what we grow will always be required. Also, everybody has got to build so they will always need iron ore and people are going to need oil and gas.

What is interesting is tourism – our biggest traditional market for tourism has been the UK. However last year, our biggest growth was from China with over 30% increase in tourism since a Chinese airline commenced operating a direct flight. Our outlook is a positive one for Asia.