The initial legislation that will enable the development of the Colombo International Financial Centre (CIFC), formerly known as Colombo Port City, will be presented to parliament next month, Finance Minister Ravi Karunanayake said last week.
“It is well ahead of time, and within the next month I guess we will be able to bring this to parliament, and with that we’ll able to legislate the financial district which is to come. It will be under the British Law and a separate jurisdiction,” he said. He noted that initial government efforts will be concentrated on creating a believable working strategy, which would give confidence to investors and banks in order to let their funds move in and out of the country freely, like in other global financial centres.
‘‘Now the first thing we want to do is we want to legislate this in order to ensure that the people have the confidence, that it is free, there’s no interference, no bureaucratic process that is there, and getting caught up on red tape which you see today on a reducing scale but still is there,” he said.
Noting that the CIFC would increase the country’s Gross Domestic Product (GDP) by 2-3 percent in its first 5-6 years of operation, Karunanayake said that it would create employment for 15,000-20,000 people.
“In Dubai, administration is extremely high, in Singapore strategies exists but the costs are very high. This is the reason why there’s a natural tendency to gravitate towards Sri Lanka,” he said.
He added that the upcoming budget would also include reduced tax rates for companies operating from CIFC.
“The taxation structure would certainly be in line with global expectations. You can’t come into a financial centre and have 25-30 percent taxes,” he said.
Meanwhile, Stephenson Harwood Managing Partner Rovine Chandrasekera said that there should be synergies between the financial and legal systems of CIFC and the rest of Sri Lanka, since judgements passed and agreements signed in CIFC should not be worthless pieces of paper when seeking to enforce in other parts of Sri Lanka. (CW)