Sri Lanka started with economic reforms in 1977 and is widely considered as one of the more open economies in South Asia. Total foreign ownership is permitted in large areas of the economy. There are no restrictions on repatriation of earnings, fees, capital, and on foreign exchange transactions related to current account payments. There is a range of legal and regulatory framework available, and which is constantly being updated and upgraded, covering various areas of business law.

Access to Key Markets

Sri Lanka has bilateral Free Trade Agreements with India and Pakistan providing duty free or preferential access to a market of over 1.3 billion. India-Sri Lanka Free Trade Agreement provides strategic access through Sri Lanka to about 4200 tariff lines at zero duty to India. The Pakistan-Sri Lanka Free Trade Agreement provides access to nearly 4,500 tariff lines at zero or preferential duty. Sri Lanka is also a participant country of multilateral trading arrangements such as South Asian Free Trade Area (SAFTA), Asia-Pacific Free Trade Agreement (APTA) and is negotiating a similar arrangement under the Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation (BIMSTEC). Sri Lanka is also a beneficiary of GSP Plus Scheme of the European Union (EU) that provides access to 7,200 products originating from Sri Lanka to be imported to the EU at zero customs duty. Sri Lanka is the only country in South Asia to enjoy this facility.

Legal Basis for Business

The Judiciary in Sri Lanka comprises a Supreme Court, Court of Appeal, Provincial High Courts and a number of subordinate courts. The Judges of the Supreme Court and of the Appeal and High Courts are appointed by the President. The Judges of the lower courts are appointed by the Judicial Service Commission.

Sri Lankan legislation matters pertaining to business includes the Board of Investment Law, the Intellectual Property Act, the Companies Act, the Securities and Exchange Commission Act, the Banking Act, the Industrial Promotion Act and Consumer Affairs Authority Act. Sri Lanka is a also signatory of many bilateral investment protection agreements and is a Party to the Multilateral Investment Guarantee Agency (MIGA) of the World Bank. Foreign investments also have Constitutional Guarantees in Sri Lanka. Arbitral awards made abroad are now enforceable in Sri Lanka.