Sri Lanka: Investing in a Country that lives in Peace

The civil war that existed in Sri Lanka for three decades provoked fear among businessmen interested in investing in the country which brought about a heavy economic lag in the country, as a consequence; nevertheless, in 2009, after the defeat of the Army for the Liberation of the Tamil Motherland, which was fighting for the autonomy of the north and east sections of the nation, opportunities for investing in Sri Lanka have noticeably increased.
The civil war began in 1983, wasting much time and money while causing the death of tens of thousands of victims, so that the end of the conflict was well received by both the natives as well as foreign businessmen who saw that the moment to invest in Sri Lanka had arrived. Experts agree that investments arriving from outside the country have highlighted the stock market in Colombo during 2011.
At the moment, the European Union is the major market for Sri Lanka’s exportations, especially in the clothing market. Official quotes place Sri Lanka’s clothing exportation alone at a little more than 3,000 million USD a year. This confirms clothing exportation as the third highest source for Sri Lanka’s income, preceded only by remittances from emigrants and tourism.
During those years the governments of China and India offered weapons to the national government during its clash with the guerilla warfare, so they claimed the right to peacetime advantages in the process of investing in Sri Lanka.
 In Sri Lanka has attracted more than just a few Indian Businessmen, so that commerce between the two nations has entered into one of its finest hours. Sri Lanka’s exportations to India have increased by 45% since the beginning of 2011, while exports from India to Sri Lanka have increased by 41%, according to investment experts in Sri Lanka.
One of the Indian groups that have managed to invest in Sri Lanka is the Mahindra Group, which introduced new car models on the market in Sri Lanka, and also plans on establishing an assembly plant, together with a local company.
Chinese businessmen have also favorably evaluated investment options in Sri Lanka. They have invested, from 2009 to the present, 500 million dollars in infrastructure projects situated in the south of the country.
Foreigners find investing in real estate in Sri Lanka to be one of the main attractions in, especially in property along the coast.
The government has identified real estate as an important source of income, so much so that they have offered incentives for promoting investments in Sri Lanka. “The Golden Enclave Ascon”, a 13 story building with 126 two or three bedrooms complexes and 14 penthouses, is included among the investment projects that have been proposed. It also includes a pool, gym, a playground for children and a parking lot on the ground floor that can handle around 200 cars.
The defeat of the rebels awoke interest in investing along the coast of Sri Lanka. There, surrounded by precious beaches and a peaceful atmosphere, those who hope to invest in Sri Lanka can on a place where serenity and tranquility reign. With an eye to attracting more people to the country, the government allows free acquisition of real estate to all those foreigners who are willing to pay a tax on the land at 100% of the property’s value.
Another alternative that foreigners who manage to invest in Sri Lanka encounter is land leasing, an activity that can be extended for a period of 99 years, with a tax of 7%.
The government has taken a chance on transforming Sri Lanka into an important economic center by developing five fundamental centers: one commercial, another for knowledge, another would be naval and maritime; a fourth covers aviation and the fifth is dedicated to energy, with the idea of taking advantage of geographical advantages and Natural resources that Sri Lanka possesses.
One of the fundamental sectors for investments in Sri Lanka is tourism. The arrival of tourists in this country has increased noticeably since the arrival of peace. The annual growth in the number of tourists is estimated at more than 40% and the resulting yearly income passes the 500 million dollar mark. The authorities hope to reach one million tourists for the first time in 2011, and thanks to the plans for investing in tourism in Sri Lanka, the nation could receive by 2016 2.5 million visitors, which would generate an income of about 3,000 million dollars.
Lodging is the leading sub-sector in tourism in Sri Lanka, with hotels, hotel boutiques, boarding houses and villas. There are a total of more than 1200 establishments, of which 256 are classified as hotels. The number of habitations is higher than 22 thousand, 15 thousand of which are available in hotels.
In agreement with the experts, the tourism sector in Sri Lanka needs more than 2,500 million dollars in foreign investments during the next 5 years in order to complete its objectives. For this reason, local authorities have presented big tax incentives in order to attract those who are considering investing in Sri Lanka.
For example, businesses that invest an equivalent of 3 million dollars won’t have to pay corporate taxes for five years; those who invest 5 million will have the period extended to 6 years while those who wish to invest 7 million dollars in tourism in Sri Lanka will be free of these taxes for 7 years.
Along with tourism, the government wants to promote projects for investments in infrastructures. A well-organized development of the economic infrastructure will help increase economic efficiency, while expanding the economy’s production capacity at the same time. The authorities have concentrated on key areas such as highway development, water supply, aviation, transportation, urban development, establishing industrial areas, hospitals and logistics centers.
Some experts have recommended investing in the construction sector, because they consider that there are already valuable projects already being put into action in the country and others are awaiting foreign financial aid for constructing national freeways and projects for mega-constructions and urban development, combined with house construction.
Investing in Sri Lanka a few years ago seemed a desperate idea. The civil war left deep impressions; however, peace brought prosperity to a country that presents all kinds of incentives, with the idea of attracting new projects. It seems that through Sri Lanka’s investment plans, everyone has something to gain.