Business Opportunities

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2004
Business Opportunities In Sri Lanka
Presentation by Ambassador Devinda R.
Subasinghe Sri Lankas Ambassador to the
US Ashland International Business
Initiative Convocation Centre Ashland University,
Ohio January 20, 2004
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Basic Facts

• Area 65,606 sq km
• Population 19.04 million
• Labor Force 6.7 million
• Literacy Rate 92
• Languages Sinhala, Tamil,
  English
• Religions Buddhism -70
  Hinduism 15
• Christianity
  8
• Islam 7
• Government type - Republic
• Capital - Colombo
• Independence - 4 February 1948
  (from U.K.)

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Sri Lanka Overview

• Sri Lanka is an island located in the Indian
  Ocean, at the base of the Indian Sub-Continent,
  880 km north of the Equator.
• Sri Lanka is a multi-ethnic, multi-religious
  country with a diverse and rich culture dating
  back to 2,500 years.
• A land of endless enchantment for visitors from
  all over the world.
• Its fragrant spices, precious gems, legendary
  natural beauty, sublime culture and hospitable
  people made it South Asias paradise island.

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Sri Lanka Overview

• Sri Lankas strategic location on the sea lanes
  between the East and the West is an advantage to
  the islands positioning as the hub of South
  Asia.
• Sri Lankas most dynamic sectors in the economy
  are textiles and apparel, food processing,
  tourism, food and beverages, telecommunications
  and, insurance and banking.

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US-Sri Lanka RelationsA Historical Glimpse

• A history of 200 years of people-people contacts.
• 19th century trade involved the import of New
  England ice to Sri Lanka and the export of Sri
  Lankan graphite to America.
• Joseph Dixon, popularizer of the modern lead
  pencil visited Sri Lanka in 1838 to arrange for
  export of graphite.
• As early as 1813, Rev. Samuel Newell, a New
  England clergyman, engaged in Missionary activity
  in Ceylon (Sri Lanka.
• Mrs. Harriet Winslow (great-great grandmother of
  the late John Foster Dulles) founded a girls
  boarding school in 1824, considered the first in
  Asia.
• In 1917, Dr. Ananda Coomaraswamy, one of worlds
  leading Oriental scholars, was named the Curator
  of the Boston Museum of Fine Arts.
• Formal diplomatic relations were established in
  1948.

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Sri Lanka-US Business Relations

• Government of Sri Lanka currently pursuing a Free
  Trade Agreement with the US Government to open
  markets bilaterally.
• Trade and Investment Framework Agreement (TIFA)
  signed with the US in July 2002 and establishment
  of Trade and Investment Joint Council to promote
  trade and investment.
• Sri Lanka has signed an Investment
  Promotion/Protection
• Agreement, an Avoidance of Double Taxation
  Agreement, an Open Skies Agreement and a
  Protection of Intellectual Property Rights
  Agreement with the US to promote and guarantee
  protection of US FDI in Sri Lanka.
• The Sri Lanka Congressional Caucus of the 108th
  Congress has been reactivated to enhance US- Sri
  Lanka bilateral relations.
• A Sri Lanka Working Group at the United States
  Chamber of Commerce was established in September
  2003 to foster increased business relationships
  with Sri Lanka and to create a greater awareness
  of the business opportunities that exist for US
  companies.

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Sri Lankas Trade with the US

• Total trade between Sri Lanka and the US was
  US 2 billion in 2002.
• Total trade between Sri Lanka and the US
• - US1.80 billion in the first 11 months of
  2003.
• Sri Lanka exports to the US was US1.7 billion
  (first 11 months of 2003).
• US exports to Sri Lanka was US1.4 million (first
  11 months of 2003).

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Sri Lankas Exports to the US

• Ceylon tea, considered the best in the world,
  caters to speciality tea segment of the US
  market. Sri Lanka is the second largest supplier
  of packeted tea and the third largest supplier of
  tea bags to the US. Sri Lanka also exports green
  tea.

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Sri Lankas Imports from the US

• Cereals (wheat)
• Electrical machinery
• Fabrics and yarns
• Tobacco
• Paper and paper board
• Rubber products
• Chemicals
• Automobiles
• Plastics

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Major US Companies Operating in Sri Lanka

• AES Corporation
• Computer Associates International Inc.
• Gloria Vanderbilt
• The Coca Cola Company
• Liz Claiborne Inc.
• Nathan Associates
• May Department Stores International
• JP Morgan Chase
• Singer Corporation
• Mast Industries Inc.

• Lanka Bell (Pvt.) Ltd.
• Celetron
• Playknits Group
• J. Walter Thompson
• Union Carbide
• Warner Lambert

• The Limited Inc.
• Caterpillar Power
• Ventures Corporation
• Sara Lee branded Apparel
• Kellwood
• Wal-mart Stores Inc.
• Bell Helicopter
• Ansell
• American International Group Inc.
• Citi Group inc.

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Leading Brand Names Manufactured in Sri Lanka
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The Limited Inc. and Sri Lanka

• The Limited, the Columbus, Ohio based company has
  been purchasing intimate apparel (Victorias
  Secret) from Sri Lanka for the last 15 years.
• Sri Lanka manufactured lingerie, from the
  state-of the-art factories employing highly
  skilled and literate workers, considered the
  best product on the shelves at Victorias Secret
  Stores.
• Victorias Secret sources over US350 million
  worth of merchandise from Sri Lanka.
• Sri Lanka recognized as one of Victorias
  Secrets leading manufacturing bases in the
  world.

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Trade Opportunities for Companies in Ohio

• Potential Ohio Exports
• Agricultural Products Soybeans, corn, Wheat,
  feed grains
• Medical Rubber Products
• Industrial Machinery Computers
• Paper and Paper Board
• Potential Imports from Sri Lanka
• Apparel
• Tea
• Gems and Jewelry
• Rubber and Rubber Goods
• Information Communication Technology (ICT)
• Plastics

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Opportunities under India-Sri Lanka Free Trade
Agreement

• Sri Lanka as a value addition platform to the
  Indian sub-continent.
• A market of over 1.0 billion people.
• Market Access Over 80of goods can enter on
  duty free basis
• Sri Lanka-India land bridge project proposed.
  Pre-feasibility study is to be undertaken to
  determine viability.
• Potential sectors for US investment
• Rubber, Paper Paper board, garments
  textiles, iron steel, Machinery mechanical
  appliances, electronics/electrical and
  automobiles spare parts.

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Indo-Lanka Land Bridge Location
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The Land Bridge to India
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Sri Lanka in US Study Abroad Programs

• DRAFT SLIDE for comments please.
• The ISLE (Intercollegiate Sri Lanka Education)
  Program initiated in 1982, is based in Kandy, Sri
  Lanka.
• Participating colleges include, Bates, Bowdoin,
  Carleton, Colby, Grinnell, Holy Cross, Swarthmore
  and Whitman.
• Majors include, Religion, Political Science,
  Development Studies, Sociology and Anthropology,
  Womens Studies, Psychology and Linguistics.
• Internships available with Government and Private
  Institutions and, NGOs.
• The American Institute for Sri Lankan Studies
  (AISLS), established in 1995 - fosters excellence
  in American research and teaching on Sri Lanka
• - Promotes exchange of scholars and scholarly
  information between the US and Sri Lanka
• AISLS Fellowships support 2-4 months research in
  Sri Lanka by US citizens holding PhDs or
  equivalent.

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Investment Opportunities for Ohio Companies
in Sri Lanka

• Infrastructure Development- Power Energy Ports
  Airports Water Supply Sanitation Highways
• Biosciences
• Information Communication Technology
• Rubber products
• Automobile parts
• Vertical integration of textiles/accessories
• Food processing industries

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Business Climate
The Sri Lankan economy is one of the most
business friendly and liberalised in South Asia.

• Total Foreign Ownership
• No restriction on Foreign Exchange
  Transactions(related to current account
  payments).
• Safety of Foreign Investments Guaranteed by the
  constitution.
• Agreements signed with many countries

• Bilateral Investment Protection
• Double Tax Relief

• Equal Treatment Foreign Local Investors
• Legal Regulatory framework

• Sophisticated
• Transparent

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Investment Incentives in Sri Lanka

• Tax holidays from 5 to 20 years.
• Concessionary tax at 15 after expiry of tax
  holiday.
• Import Duty Exemption for Capital Goods.
• Import Duty Exemption on Raw Materials if
  utilized for export
• Exemption from Exchange Controls.
• No restriction on repatriation of dividends,
  profits etc.
• Free transferability of shares
• The right to 100 foreign ownership in almost all
  sectors of the economy
• Concessionary Taxation on expatriates income

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A GREAT PLACE TO VISIT A GREAT PLACE TO WORK
A GREAT
PLACE TO LIVE
Thank You!
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Embassy of Sri Lanka 2148, Wyoming Avenue
NW Washington DC 20008 Telephone [phone]
Fax [phone] E mail
slembassy_at_slembassyusa.org Website
http//www.slembassyusa.org