New investment policy before 2016

20 October 2015 03:13 am

BoI Chief confesses his institution has become ‘one-stop shop’ to a ‘non-stop shop’ 

•     Says US $ 5bn FDIs in the pipeline
•     Promises to correct 15% land lease tax on foreigners

Board of Investment (BoI) Chairman Upul Jayasuriya said they are now in the process of designing a new investment policy focusing mainly on setting up a large number of economic development zones around the country with the intention of generating employment opportunities.

The new investment policy will encompass 45 mega economic development zones, which include, 11 industrial and information technology zones, two tourism development zones, 22 mega agricultural development zones and 10 fisheries development zones.

“Hopefully the new (investment) policy will be out before the dawn of the next year,” said Jayasuriya when he met the business community yesterday at a breakfast meeting to reveal the BoI’s new policies and practices to lure investments to the country.

The event was organised by the Ceylon Chamber of Commerce-led Sri Lanka – Germany Business Council.

Jayasuriya, a senior lawyer and the former President of the Bar Association, braved a barrage of questions from the business community but was non-committal on a foreign direct investment (FDI) target for the country, which ended a 30-year war six and a half years ago.

Sri Lanka on average attracted US $ 1 billion FDIs a year since the end of the war but countries such as Vietnam, which have had undergone similar circumstances, draw US $ 10 billion per annum.

According to Jayasuriya, in 2014, Sri Lanka had realized FDIs worth of US $ 1.06 billion.

Meanwhile, the BoI chief, who took over the reins only early this year, acknowledged that his institution has indeed become a ‘non-stop shop’ instead of a ‘one-stop shop’ once it used to be.

“It was once upon a time a ‘one-stop shop’ but it has now become a ‘non-stop shop’. I appreciate that criticism and we deserve that,” he confessed while taking jab at the previous regime for the sorry state of affairs at the BoI.

Jayasuriya also blamed the role of the regulator that the BoI had been gradually pushed into when it is supposed to play a role of an investment facilitator. Speaking on the FDIs in the pipeline, he announced that request for proposals (RFPs) would be out in less than 10 days for US $ 5 billion worth of projects, which mainly include monorail systems and other transport-related infrastructure development.

“In addition to that there will be another huge mixed development project in front of the (Fort) railway station on a 10-acre land, which is owned by the Urban Development Authority (UDA),” he said.

There have been both solicited and unsolicited proposals to the tune of the US $ 1 billion, he added. Speaking on the much controversial Land (Restrictions on Alienation) Bill, which was enacted in October 2014 slapping the foreigners with a hefty upfront 15 percent stamp duty when leasing lands, Jayasuriya said the law had created a huge inequality for the foreigners and thus would be rectified soon.

“This has to be corrected and it will be corrected,” he assured. Under this law, foreign entities will be able to lease land for a maximum of 99 years subject to a land lease tax of 15 percent of the total rental payable for the entire duration of the lease, which is payable upfront.