US trade team gets top briefing on ease of doing biz, future potential in Sri Lanka

By Shabiya Ali Ahlam

The visiting US multi sector trade delegation yesterday received a comprehensive briefing from a top panel on the ease of doing business in Sri Lanka and future potential.

The eight-member mission, first in post-war Sri Lanka, got key insights from KPMG Managing Partner Reyaz Mihular on ‘Doing Business with Sri Lanka’ from a macro, micro and Foreign Direct Investment perspective, whilst CEO for Citibank in Sri Lanka Ravin Basnayake gave an overview of US companies/businesses in the country.

The panel, which also included Ceylon Chamber of Commerce Secretary General and CEO Harin Malwatte, was put together by the American Chamber of Commerce in Sri Lanka (AMCHAM).

AMCHAM’s President Vijaya Ratnayake and Vice President Prasath Nanayakkara also shared some key insights, while a Q&A session moderated by US Embassy Economic Officer Chris Corkey saw a few questions raised by the visiting delegation which arrived on Wednesday.



Some of key highlights of the presentations were the attractiveness of Sri Lanka within South Asia and to serve the large market given the Free Trade Agreements with India and Pakistan; rising per capita income and improving lifestyles; the good financial regulatory environment; and a favourable tax regime.

The delegation wrapped up their two-day visit with one-on-one meetings involving interested Sri Lankan companies yesterday.

Companies involved in the delegation included AI+ Architecture LLC (Architecture), First Med USA (Medicare), Fort Hill Infrastructure (FHI) Services, LLC (Infrastructure) , North Central University (NCU) (Education ), Sabre Airline Solutions (Aviation), Wing Zone International (Food Franchise) and GE India (IT). They were in Sri Lanka following visits to Chennai and Cochin in India.

Alluding to the vast difference in the size of the domestic service market, the panel of industry experts advised the delegation not to look at Sri Lanka and India in the same manner as the Indian market showed potential for high ‘volume’ services whereas Sri Lanka showed potential for high ‘value’ services.

Citibank CEO Ravin Basnayakesaid Sri Lanka is the strategic location to establish business ventures as it is probably one of the few countries that shares a good relationship with the South Asia region owing to the fact that Sri Lanka is the only country to have Free Trade Agreements with India and Pakistan.

“You don’t even have to cater to the Sri Lankan market; you can cater to regional markets via Sri Lanka as we have strong relationships with the countries in the South Asia region, which allows smooth facilitation of business processes,” he said.

Venturing into the certainty of future developments in Sri Lanka and how this can be translated into partnerships with the US, Basnayake cited the post-2015 GDP per capita target of $ 4,000, which would significantly increase the consumption economy.

Furthermore, he stated that physical infrastructure of Sri Lanka would be much more advanced within the next three years, citing top development projects such as the Hambantota Port and International Airport in Matalla, which will be functioning by that time.

Sri Lanka being in its transition period of development, KPMG’s Mihular opined: “US companies have the opportunity of entering the infrastructure arena of Sri Lanka as potential contractors and investors.”

He added that from a service provider’s point of view, US companies could get involved in providing unique recreational facilities to support the booming tourism sector as the country is targeting having 30,000 rooms for hospitality by 2015. “Having 30,000 rooms isn’t enough; we need activities for tourists to engage in as well,” he said.

Given the increase in demand for higher education study programs with the country, Mihular also stressed on the credibility of establishing a fully-fledged campus in Sri Lanka. Besides the local population, students from neighbouring countries such as India, Pakistan and Bangladesh are considering Sri Lanka to pursue their higher education. The recent setting up of accredited study centres by top foreign universities was noted as an indicator that the education rendered in Sri Lanka would reach a new level in the near future.

With regard to the ease of transacting money in and out of the country, AMCHAM President Ratnayake assured the audience that the regulations of the Central Bank of Sri Lanka were clear, laid down, and there were no hidden factors prevailing. Mihular added: “Being small, medium or large, we are concerned about sending out what is due to you. As long as the money is legal, there shouldn’t be any long processes or delays.”

Highlighting accommodations made by the Government in the recent Budget to encourage foreign companies to enter the country, Mihular shared that even for local companies, a minimum of 28% tax, which would effectively come down to 24% after allowance, would be charged and emphasised that where taxes are concerned, Sri Lanka is simple, easy and transparent.