Setting up BOI in Sri Lanka

Under Section 16 & 17 of BOI Law and Strategic Development Project Act

Board of Investment of Sri Lanka is empowered to approve projects under following categories.

Projects approved under Section 16 of BOI Law

Projects are approved under section 16 of BOI Law, where the entry of foreign investment is permitted without any fiscal concessions. These projects are governed under Normal laws of the country and are subjected to Inland Revenue Laws, Custom Laws and exchange control regulations.These approvals are granted;

  1. only to facilitate the entry of foreign investment

  2. Board resolution passed by the Directors of the company Objects that you are going to carry out in Sri Lanka/and shareholders resolution separately all together two board resolutions (Nature of the business)

  3. to setting up of a new company with foreign shareholding or

  4. for the purpose of transferring or issuance of new shares in an existing non-BOI company to foreign investors

At present the minimum investment requirement to qualify for the section 16 projects is US$ 250,000. This can be either 100% foreign investment or a joint venture investment with a local collaboration.

Foreigner has to remit a minimum of US$ 1 Mn if they are to undertake trading activity

The proposed foreign investment should be effected from funds remitted through a Securities Investment Account (SIA) as indicated in the Gazette Extraordinary No.1232/14 of 19th April 2002 published by the Controller of Exchange.

Projects approved under Section 17 of BOI Law

Under Sec.17 of the BOI Law, it is empowered to approve projects and enter into agreements with enterprises and to grant exemptions from laws such as Inland Revenue, Exchange Control and Customs, subject to fulfillment of the investment threshold or any other specified requirement.

Projects approved under Strategic Development Projects Act (SDP)

Tax exemptions are considered under the provisions of Strategic Development Projects Act No 14 of 2008 and its amendments for special projects which are in the national interest, likely to bring economic and social benefits to the country and capable of changing the landscape of the country, primarily through

  1. the strategic importance attached to the proposed provision of goods and services, which will be of benefit to the public ;

  2. the substantial inflow of foreign exchange to the country ;

  3. the substantial employment which will be generated and the enhancement of the income earning opportunities ; and

  4. the envisaged transformation in terms of technology.

The SDP Act covers full or partial exemptions from following legislation based on the nature of the investment on a case by case basis.

  1. The Inland Revenue Act, No. 10 of 2006

  2. The Value Added Tax Act, No. 14 of 2002

  3. The Excise (Special Provision) Act, No. 13 of 1989

  4. The Economic Service Charge Act, No. 13 of 2006

  5. Nation Building Tax Act No. 09 of 2009

  6. Port & Airports Development Levy Act No. 18 0f 2011

  7. Customs Ordinance (Chapter 235)

  8. The Sri Lanka Export Development Act No. 40 of 1979

  9. The betting and gamling levy Act No. 40 of 1988

When receiving incentives and other benefits eligible for investors, there is no discrimination between local and foreign investors if they invest in Sri Lanka under Section 17 of BOI Law or Strategic Development Projects Act.