Where can I find statistics on Sri Lanka Tourism?
Information and current statistics on Sri Lanka Tourism could be obtained easily by logging on to www.sltda.lk/statistics
How safe is it to invest in Sri Lanka?
The safety of foreign investment is guaranteed through the enactment of a two-third majority of Parliament (Constitutional Guarantee of Investment Protection Agreements). Under Article 157 (Sri Lanka Constitution), no legislative executive or administrative action can be taken to contravene the provisions of a bilateral investment agreement otherwise than in the interests of national security.
How does a foreign company invest in Sri Lanka? What are the regulations pertaining to issue of shares by Sri Lankan companies to foreign collaborators/investors?
The laws relating to business organisations do not permit non-nationals to run sole proprietorship businesses. However, foreign investors can incorporate a resident company in Sri Lanka to run the business.
Under the Companies Act of Sri Lanka, a foreign company can register a private limited liability company, incorporated with a minimum of two shareholders, who can own the entire share capital of the company. Following incorporation, the company must comply with all statutory requirements imposed on domestic companies.
Does the Sri Lankan government permit 100% foreign participation?
Yes! Under Section 17 of the Board of Investment Law, the Sri Lankan government permits up to 100% foreign FAQs participation in many sectors of the economy, such as tourism. The BOI will provide automatic approval for such investments. Foreign investment including travel agencies,inbound tour operators are restricted to 40%.
What is the scope of concessions given to foreign investors?
BOI companies that meet specific criteria such as size of total investment, type of investment, and location of investment, qualify for tax holidays ranging from 3-7 years. In addition, a concessionary rate of income tax of 12% up to a maximum period of 20 years is also extended to these companies.
Are there any restrictions on the repatriation of profits earned in Sri Lanka?
No. The government allows 100% repatriation on earnings, fees and capital, and on foreign exchange transactions relating to current account payments.
What assistance will I receive from the government of Sri Lanka if I were to set up a tourism establishment?
Sri Lanka’s tax treaties follow two basic principles for granting relief:
A) Foreign tax credit principle
The country of residence imposes tax on a resident’s total income inclusive of foreign income. (However, credit against the foreign tax paid by the resident on his foreign source of income is permitted.) Where the foreign tax is lower than the domestic tax, only the excess of such tax is payable to the country of residence, where the foreign tax is high. In this instance, no tax is collectible in the country of residence.
B) Exemption principle
Income exempted is not taken into consideration for the determination of tax to be imposed on the taxpayer’s other income.
Tax Sparing Credit relief is also provided in some double taxation agreements to prevent the loss of double taxation credit negating the incentives offered to taxpayers in the form of tax holidays and tax concessions in developing countries. Such credits are generally given for Dividends, Interest or Royalties or tax spread under a tax holiday or on the profits of subsidiaries out of which dividends have been paid.
How does Sri Lanka’s tax system operate?
Sri Lanka has a transparent, low-tax regime, and has signed double taxation relief agreements with 26 countries. These agreements provide for reduced tax rates on dividends, interest and royalties. All Sri Lankan businesses, except for BOI certified companies and enterprises that qualify for special concessions under the Inland Revenue Law are liable to taxation.
Resident and companies are liable to a corporate income tax of 28%. Non-resident companies (companies whose head offices are located overseas, or are controlled from abroad) pay an additional tax of one-third of remittances overseas or one-ninth of taxable profits - whichever is less.
Are non-citizens liable for payment of personal taxation?
Yes, non-citizens pay the same tax rate as Sri Lankans.
What type of visa would a foreign national interested in investing in Sri Lanka Tourism require, and what would the cost and procedure be?
Any foreigner who visits Sri Lanka for the purpose of seeking investment opportunities on several occasions within a year may be eligible for a Multiple Entry visa, which is valid up to 12 months and costs LKR10,000/- (USD 100).
The visa can be easily obtained. An application can be downloaded from the website or obtained from the Department of Immigration and Emigration or the Sri Lanka Missions office.
Would investing in Sri Lanka Tourism grant me a visa to live in Sri Lanka with my family?
Yes! Resident visas can also be obtained for expatriate personnel whose services are required for approved projects, expatriate personnel employed in projects under Board of Investment of Sri Lanka, or foreign nationals investing monetary capital or engaging in business activities in Sri Lanka.
A Resident Guest Scheme has been introduced as an incentive for prospective foreign investors and professionals who would contribute to the economic and socio-cultural development of the country. The scheme is open to all foreign nationals. Any foreign investor/professional who could contribute to the economic and socio – cultural enrichment of the country can apply.
To obtain a Residence Visa, it is necessary to arrive in Sri Lanka on an Entry Visa issued by a Sri Lanka Mission abroad with the concurrence of the Controller General of Immigration and Emigration. Visit Visas issued without the Controller General's approval will not be considered for conversion into Residence Visas.