The Board of Investment (BOI) of Sri Lanka is the primary agency responsible for approving private Foreign Direct Investment (FDI) as well as local investment under the Board of Investment Law No. 4 of 1978 (BOI Law) and its amendments. You may apply to invest in a permitted business activity either under Section 16 or Section 17 of the BOI Law. All sectors in the Sri Lankan economy (except for a handful) are now open for Foreign Direct Investment (FDI).
Option 1: Section 17 Projects
Both foreign and local investors can request to set up a Section 17 project if you can meet the eligibility criteria stipulated by the BOI regulations with respect to the Investment Sector (Sector) you have chosen to invest in.
Section 17 projects are eligible for certain concessions including:
Corporate tax concessions granted under the Inland Revenue Act of Sri Lanka
Customs duty-free Import of capital goods and raw materials (granted under the BOI Law)
Exemption from Exchange Control Act (Part I-VI) (granted under the BOI Law)
For more information go to www.investsrilanka.com or contact the Investor Relations Center.
Selected projects approved under Section 17 may additionally qualify for approval as a Strategic Development Project (SDP). SDPs are considered to be of strategic importance, and likely to bring substantial economic and social benefit to the country.
SDPs may also qualify for tax exemptions of up to a maximum duration of 25 years and will require approval by the Cabinet of Ministers as well as by a resolution of Parliament. For more details, please see Strategic Development Projects later in this guide.
Option 2: Section 16 Projects (Foreign Investment OR Joint Ventures Only)
Foreign investors may obtain BOI approval to set up a Section 16 project (for Foreign Investment entry only) in either of the following circumstances:
If your project does not fulfill the approval criteria required under Sec. 17 of the BOI Law
If you are transferring shares of a non-BOI enterprise to foreign investors
Projects set up under Section 16 of the BOI Law will operate under the normal laws of Sri Lanka and are not eligible for any of the special concessions provided under Section 17 of the BOI Law.
Section 16 projects may also be set up as a Joint Venture with a local partner.