By Sunimalee Dias
With the investment profile of Sri Lanka improving, the Board of Investment (BOI) is bracing for larger flow with a restructured incentive scheme.
This comes in the wake of a large number of investors expressing interest in coming down to Colombo to set up office or establish business links.
In this respect, the Government is currently working on a strategy to attract investors worth a figure that is perceived to be higher than the current amount. This would in effect result in the change of the BOI’s incentive resume, the official noted.
This is expected to be introduced closer towards the date of the budget, which is scheduled for 22 November.
The current threshold for investments is US$ 250, 000, which is being reviewed by the BOI after a lapse of three years. Total investments for 2009 was US$ 602 million while 2008 recorded the highest figure so far at US$ 808 million.
These reviews take place in accordance with the economic circumstances of the country, it was noted. In this respect, the official observed, these reviews have taken off in the wake of improved confidence and renewed investor interest in Sri Lanka.
The BOI is currently providing service facilities to investors, with attractive incentive allowances and tax relief.
In addition, a number of major companies around the world are reportedly coming forward to invest in tourism, industries, services and infrastructure sectors.
The BOI has identified certain key sectors of focus in line with the Government’s areas of interest for creating more job opportunities, skilled manpower and added development for the regions.
The areas of focus are tourism, especially in the hotels; IT/BPO industry which has the ability to create more value addition for the youth and job opportunities; and the education sector, which is expected to produce more technically-skilled individuals for the developing economy.
In the agriculture sector, increased production is expected; with areas for import substitution to be carried out, especially in the dairy sector. Sri Lanka currently imports approximately US$ 300 million worth of milk powder alone and through investments in this sector the Government hopes to reduce dependency and increase self-sufficiency.
In respect of investment focus for infrastructure, the country hopes to attract investors interested in engaging in the development of ports, airports and housing through both Foreign Direct Investments (FDI) and domestic investments.
Moreover, the Government is attempting to attract investors to encourage harbour-related activities like logistics and bunkering.
In the first half of 2010, FDIs had fallen by 16.8 per cent to $ 208 million whilst the BOI had approved US$ 2 billion worth of projects.