Belgium requests SL to bring down its minimum investment threshold

Tuesday, 3 December 2013 01:09 - - {{hitsCtrl.values.hits}}

Consulate of Belgium says BOI’s minimum investment threshold too high for SMEs
Requests bringing down minimum investment level from $ 500, 000 to $ 100,000-$ 150,000 range
SL ideal for Belgium companies to manufacture and assemble products due to its strategic location
Entry of Belgium companies to SL not a threat for local manufacturers

By Shabiya Ali Ahlam Belgium is highly optimistic about investing in Sri Lanka, but the minimum investment threshold imposed by the Board of Investment (BOI) limits the number of Belgian companies that can start operations in the country. With the minimum investment threshold currently being $ 500, 000, Consul of Belgium in Sri Lanka Pierre Pringiers opined that this amount was rather high and that it should ideally be within the range of $ 100, 000 to $ 150,000.

While the request for the minimum investment to be brought down has already been made by the Consulate of Belgium to the BOI, Pringiers justified the need for this reduction by stating that the SME sector cannot afford to make such investments at the initial stages of establishment. Pointing out that the SME sector in Belgium contributes to approximately 80% of its economy, Pringiers said: “The SME sector has great potential in Belgium. If Sri Lanka is to attract that segment, it should ideally have its minimum investment threshold brought down to about $ 100,000 to $ 150,000. These companies don’t require tax concessions. They are not interested in tax holidays. The companies could be under the regular tax rates as far as income tax is concerned.” He added that facilities from the BOI for importing goods, machinery and equipment and re-exporting the finished products duty free are also expected. As Belgium is interested in using Sri Lanka as a stepping stone to other markets due to its strategic location and the Free Trade Agreements (FTA) it has with India and Pakistan, Pringiers assured that the entry of Belgium companies to Sri Lanka would in no way be a threat to local manufacturers. “Sri Lanka is ideal for Belgium companies to manufacture and assemble products. Its strategic location will allow companies to reach other Asian markets with competitive pricing. The Belgium companies will come with very specific products that are not manufactured in Sri Lanka. Since the Belgium companies will be 100% export oriented, local manufacturers will not be under threat. I fully endorse the concern of the Government to not hurt the local businesses. It is a rightful concern they have,” Pringiers told the Daily FT soon after a seminar titled ‘Doing Business in Sri Lanka,’ organised by the European Chamber of Commerce of Sri Lanka (ECCSL) for the visiting 23 member Belgian Trade Mission, from Brussels, led by Minister of Economy, Employment, Scientific Research, Trade and Foreign Trade of the Brussels-Capital Region Céline Fremault. “Belgium has put in place certain incentives so that the SMEs can extend their boundaries. If Sri Lanka can fulfil our requirements, the nation is sure to witness a boom in investments for manufacturing,” added Pringiers.