Während der Informationsveranstaltung am 13.03.2019 in Berlin zum Thema "Nachhaltige Mobilität, Verkehrs-/ÖPNV-Lösungen und Logistik in Sri Lanka" präsentierte Herr Andreas Hergenröther, Chief Delegate der Delegation der Deutschen Wirtschaft in Sri Lanka den Exportmarkt Sri Lanka. Die Informationsveranstaltung diente der Vorbereitung zur Geschäftsanbahnung nach Sri Lanka, welche vom 24.06. - 27.06.2019 im Rahmen des Markterschließungsprogramms des Bundesministeriums für Wirtschaft und Energie stattfinden wird. Insbesondere werden deutsche Unternehmen in Sri Lanka gesucht, die Produkte im Bereich nachhaltige Mobilität und Transportsysteme anbieten und somit Ihren Export nach Sri Lanka starten. Weitere Informationen zur Geschäftsanbahung finden Sie über: http://energiewaechter.de/yourls/meplka2019

1. Sri Lanka
The hub of South Asia
www.srilanka.ahk.de

2. SRI LANKA AT A GLANCE
Capital (Commercial) Colombo
Capital (Administrative) Sri Jayewardenepura Kotte
Area 65,525 sq km
Population 21.6 million(July 2018 est.)
Official Language Sinhala, Tamil
Currency Sri Lanka Rupee (LKR)
Time Zone UTC/GMT+5:30
www.srilanka.ahk.deSource: Central Bank of Sri Lanka, Factbook

3. STRATEGIC LOCATION
www.srilanka.ahk.de

4. ECONOMIC FIGURES 2018
Gross Domestic Product USD 92.5 billion (3.8% growth vs 2017)
GDP per capita USD 4,065
FDI Inflows USD 2.3 billion
Exports USD 17 billion
Inflation 6%
www.srilanka.ahk.deSource: Central Bank of Sri Lanka

5. ECONOMIC GROWTH
68.4
74.2
79.3 80.5 81.7
87.2
92.5
0
10
20
30
40
50
60
70
80
90
100
2012 2013 2014 2015 2016 2017 2018
US$Billion
Gross Domestic Product
2014 2015 2016 2017 2018
5.0 5.0 4.5 3.1 3.8
Real GDP Growth (%)
www.srilanka.ahk.deSource: Central Bank of Sri Lanka

6. EVOLUTION OF FOREIGN DIRECT INVESTMENT
933
894
680
897
1375
0
200
400
600
800
1000
1200
1400
1600
2013 2014 2015 2016 2017
US$Million
Foreign Direct Investment Inflows(excluding loans)
Foreign Direct Investment of BOI Enterprises
(US$ million)
www.srilanka.ahk.deSource: Central Bank of Sri Lanka & Board of Investment Sri Lanka

7. SRI LANKA’S DEBT SITUATION
www.srilanka.ahk.de
• Sri Lanka’s debt
- 78% of its GDP
- 60% of its GDP foreign debt
- $ 5.9 bn due 2019, $ 2.6 bn in the first quarter
- Loan repayments between 2019-22 around $ 21 bn
• Sri Lankas’s lenders
- China: 14%
- Japan: 12%
- ADB: 14%
- WB: 11%

8. EVOLUTION OF EXPORTS
9.2
9.9
11
10.2 10.2
11.4
0
2
4
6
8
10
12
2012 2013 2014 2015 2016 2017
US$Billion
Total Exports Country Value in
USD Mn
United States 2,920.21
United Kingdom 1,043.17
India 789.58
Germany 771.5
Italy 531.65
Top Export Destinations 2017
www.srilanka.ahk.deSource: Trade Map, Federal Statistics Office, Sri Lanka Export Development Board & CBSL
(p) Provisional numerical value

9. MAIN EXPORT PRODUCTS
Textiles and Garments (44.3%)
Tea (13.5%)
Rubber and Rubber products (7.7%)
Spices 3.6%
Petroleum Products 3.8%
www.srilanka.ahk.deSource: Central Bank of Sri Lanka & Sri Lanka Export Development Board

10. MARKET ACCESS IN REGIONS
Sri Lanka seeks to increase its access to the world’s most important markets in order to
consolidate itself as the ideal export platform
Agreement Countries and Partners
Free Trade Agreements – Bilateral India, Pakistan, Singapore, China(Negotiation)
Free Trade Agreements – Multilateral South Asian Association for Regional Cooperation – SAARC
Agreement on South Asian Free Trade Area - SAFTA
Asia Pacific Trade Agreement – APTA
Agreement on Global System of Trade Preferences - GSTP
Generalized System of Preferences Plus European Union countries
Generalized System of Preferences United States
www.srilanka.ahk.deSource: Central Bank of Sri Lanka & Sri Lanka Customs

11. IMPORT SECTOR
19.1
18
19.4
18.9
19.1
20.9
16.5
17
17.5
18
18.5
19
19.5
20
20.5
21
21.5
2012 2013 2014 2015 2016 2017
US$Billion
Total Imports 2017
Country Value in
USD Mn
India 4,495.82
China 4,189.83
United Arab Emirates 1,564.12
Singapore 1,292.72
Japan 1,038.51
www.srilanka.ahk.deSource: Central Bank of Sri Lanka & Sri Lanka Export Development Board

12. BILATERAL TRADE BETWEEN SRI LANKA AND GERMANY
0
100
200
300
400
500
600
700
800
2013 2014 2015 2016 2017 2018
EURMillion
SL Exports to Germany SL Imports from Germany Trade Balance
EUR Million
Source: Central Bank of Sri Lanka & Sri Lanka Export Development Board www.srilanka.ahk.de
Year SL Exports to
Germany
SL Imports from
Germany
Trade Balance
2013 450 253 197
2014 481 217 264
2015 529 285 244
2016 577 315 262
2017 653 570 83
2018* 701 355 346
* Forecast deviations due to rounding

13. SRI LANKA’S APPLICATION FOR EU GSP+
www.srilanka.ahk.deSource: Sri Lanka Export Development Board & EU Sri Lanka
0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,500.00
4,000.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017 after
GSP+
Sri Lanka’s Export to the EU Region 2006-2017
in USD Mn.

14. OPPORTUNITIES
Maritime Sector
Sri Lanka’s location gains competitive advantage in the naval and maritime industries.
www.srilanka.ahk.deSource: Board of Investment Sri Lanka & Colombo Port Authority
2.5%
Contribution to National GDP(2017)
Expect 6% contribution by 2030
750 local shipping and freight forwarding
and clearing agents
More than 19% year-on-year growth
(Transshipments 2017-2018)
11 million TEUs per year
(After completion of the East Container Terminal )
Further developments of the CICT terminal (198 meters extension
towards West Terminal)
- Enhance the deep water capacity and call for bigger ships
- Infrastructure developments in the terminal
Significant opportunities in the port of Hambantota
- Expect to create one of the lucrative transshipment hubs with the
strategic location

15. CICT
Entrance
Channel
Entrance
ChannelPort of Colombo
CICT SAGT JCT/UCT
Draft in m 16m 14.25m 14.25m
Yard Area in ha 37 20 30
Quay Length in m 1,200 940 2,232
Capacity in TEU 3,000,000 1,800,000 3,100,000
Volume 2017 in TEU
2,388,528 1,809,823 2,010,413
Market Share 2017 38% 29% 32%

16. • Container handling 2018: 7 Mio. TEUs
• First half 2018 showed a growth of 15.6% TEUs
• Transshipment volumes increased by 19.3% world's fastest growing port
in 2018, followed by Singapore
• 22nd position in the global container port-league
• ranked the 11th best connected port in the world
• 10 Mio. TEU target by 2020
• Existing capacity of 8Mn plus TEU (Deep draft 3Mn)
• The only deep draft (18m) facility in South Asia
• Additional deep draft (18m) capacity pipeline (ECT, WCT1 &WCT2)
• Potential to increase capacity to over 17Mn TEU with current
superstructure
• Proof of concept efficiency of average 32-34 mph/crane
PORT OF COLOMBO IN FIGURES
Projected Terminals including CICT in Colombo Port (an illustration)

17. OPPORTUNITIES
www.srilanka.ahk.deSource: Board of Investment Sri Lanka & Colombo Port Authority
Ports in the region and deviation hours from
trade routes
Time at Sea from Colombo, Sri Lanka to the busiest ports of
Europe
Port of Colombo Perspective

19. • Route used by approximately 60,000 ships each year
• Can offer comparatively shorter timelines to any destination in the region and easy and fast connections
to any of the major regions in the world

20. • Leased for 99 years by the China Merchant Port Holding
• Current Capacity:
• Container: 198000 TEUs
• Break Bulk: 950000 tons
• Bulk Cargo: 2.5million tons (including 1.6 million tons’ cement)
• RO-RO: 396000 units
• Capacity: to berth 12 vessels
• LPG-termial: total storage exceeding 60,000 cubic meters
• RORO, bulk, break-bulk, container, cruise, ship-to-ship transfers (STS), ship layups and
naval vessels
• Capability and structure to handle almost any type of cargo
PORT OF HAMBANTOTA INTERNATIONAL
PORT (HIP) IN FIGURES

21. • Services such as crew changes, provision supplies, ship spares, ship stores, minor repairs and similar ship supply
services compulsory for vessels.
 can be delivered to a travelling vessel using a service boat (no similar facility from the Red Sea to the far east)
• Intention to build its own dedicated LNG terminal in approximately 3 years time.
• Building of a LNG power plant
• Soon to commence bunkering facilities - located between two major bunkering ports, Singapore and Fujairah is a
strategic advantage (no need to travel off course; lower prices)
• RORO operations and other port related services, targeting the African and South American vehicle markets are
being further diversified
BUSINESS PLAN FOR HIP

22. • looking at partnering industrialists to develop port related industries, esp.:
 vehicle manufacturing
 value additions
 Packing
 distribution centers
 bonded storage for various type of cargo
 integrated logistics
 sea to air segment
 Cement, fertilizer and flour manufacturing and distribution
• Mattala International Airport located just 30 minutes from HIP
BUSINESS PLAN FOR HIP

24. • Smart port solutions
 Modernization of information technology
 Automation solutions
 Sri Lanka’s ports and shipping ministry announced to set aside 929 million rupees to
modernize the Port of Colombo
• Construction of new terminals
• Seabed- and offshore-engineering
• Supply-Chain-Management
• Cold Chain
• Warehousing solutions
• Transshipment and port-bonded logistic-infrastructure
BUSINESS OPPORTUNITIES

25. • Services
 Ship building and repairing services; supply of spares
 Maintenance services
 Bunkering service
 Supply of food, water and other goods
 Ship chandler
• Renewable energies
 e-mobility, eg. Electric or hydrogen driven industrial trucks
 Efficient usage of solar power
• Clearing
 IT-Systems
BUSINESS OPPORTUNITIES Cont’d

26. SRI LANKAN RAILWAY IN FIGURES

27. SRI LANKAN RAILWAY IN FIGURES

28. Railways
• Colombo Suburban Railway Project
 Currently at Design Stage
 Focused towards passenger and freight demands for Sri Lanka Railways by 2025 and 2035
 Funded by the Asian Development Bank (ADB)
 Considered projects:
 Construction of 105 Km of additional tracks
 Rehabilitation of 210 Km of existing tracks
 Development of Railway Stations and Multi-model Centres
 Replacing signaling systems
 Development of maintenance facilities
 Acquisition of new Rolling Stock (locomotives, carriages, wagons)
 A high-speed rail system is proposed to connect from the city of Negombo to city of Colombo via BIA airport b
an electrified high-speed rail link to Colombo Fort where it will link to the proposed Colombo Monorail.
SRI LANKAN RAILWAY IN FIGURES

29. • Power transition from Diesel to Electric
• Infrastructure development
 freight services and infrastructure required especially for the movements of port related cargo
• Storing solutions
• Ensuring the safety of train operations
• Services regarding passenger needs
 Accommodation facilities
 Catering services
 Supply at railway stations
FURTHER BUSINESS OPPORTUNITIES IN RESPECT
OF RAILWAY MODERNIZATION

30. Transport sector generates:
 10% of BIP (2015)
 6% of employment (2015)
 Main mean of transportation: Bus (45%)
 Average driving speed in Colombo: 20km/h; 5-8 km/h (rush
hour)
 Although only 45 % of Sri Lankans use a privat vehicle,
it is responsible for 62% of the traffic.
 16 % of imported goods is fuel
 The transport sector is responsible for
more than 50% of the greenhouse gas emissions.
TRANSPORTATION

31.  In 2015 the Government increased the funding of electric vehicles noticeably. Subsequently an ascent of registration
of electric vehicles has been observed.
 2017 the Government announced publicly, that by
2025: all government owned vehicles and
2040: all private vehicles
shall be replaced by electronic and hybrid models. This will be promoted by public tax reliefs.
 Sri Lanka is doing research on solar-powered auto rickshaws, which are commonly used in the country.
 The Sri Lankan Government plans the implementation of electric and hydrogen driven busses.
 2019 tender proceeding for 800 hydrogen busses
 Long term goal is the conversion to hydrogen propulsion.
SUSTAINABLE APPROACHES:

32.  Another point of focus is the extension of e mobility. Especially the development of a efficient electric
vehicle charging stations system is a top priority. Particularly the east of the country need to be upgraded.
 Subsidies for inefficient fuels will be reduced. By 2050 Sri Lanka wants to achieve a full supply by renewable
energy.
ELECTRIC VEHICLE CHARGING CENTERS

33. • 32.5km north of the commercial capital Colombo
• Operator: Airport and Aviation Services (Sri Lanka) Ltd.
• Hub for: Cinnamon Air, Millennium Airlines, SriLankan Airlines, SriLankan Cargo;
37 airlines currently serve the airport
Stats 2018
• Passenger Movements: 10.796,411
• Air Freight Movements (MT): 268,317
• Aircraft Movements: 66.843
Single runway (04/22): 3.441m take-off, 3.350m landing distances
In operation: Terminal 1, international terminal, 12 gates, built in 1967
Terminal 3, domestic terminal, opened November 2012
Cargo Terminal opened October 2009
Planned: Terminal 2, new international terminal, 8 gates, expected to be completed in 2019
BANDARANAIKE INTERNATIONAL AIRPORT

34. INVESTMENT PROTECTION
www.srilanka.ahk.deSource: Board of Investment Sri Lanka & Parliament.lk
• Sri Lanka has signed Bilateral Investment Protection Agreements (IPA) ------- 28 countries
( Ex: Australia, Germany, Denmark, France, Sweden)
• Sri Lanka also has Bilateral Double Tax Avoidance Agreements (DTAA) -------- 42 countries ( Ex:
• A founder member of the Multilateral Investment Guarantee Agency (MIGA)

35. DOING BUSINESS IN SRI LANKA

36. TYPES OF COMPANIES
www.srilanka.ahk.de
Private Companies
• A private company must consist of at least one and not more than fifty
members.
• It must have at least one director.
• A private company cannot invite public subscription for its shares.
Public Companies
• At least seven members are required(there is no upper limit).
• It must have at least two directors.
• Public companies may invite public subscriptions for their shares or
debentures and other securities, and can also be listed on the stock
exchange.
• They cannot commence business without a business commencement
certificate.
Offshore Companies
• A company registered within or outside Sri Lanka may register itself in Sri
Lanka as an offshore company to carry on any business outside the shores
of Sri Lanka.
• If a company registered outside Sri Lanka registers itself as an offshore
company, it is deemed to have been incorporated in Sri Lanka.
• An offshore company cannot conduct any business in Sri Lanka
Sri Lanka Companies Act No 7 of 2007
Source: Department of Registrar of Companies & Companies Act No 7 of 2017

37. TYPE OF COMPANIES
www.srilanka.ahk.deSource: Department of Registrar of Companies & Companies Act No 7 of 2017
Joint Venture Company
• A joint venture can be with other Sri Lankan companies or
foreign entities.
• A joint venture business may be incorporated or carried on as
an unincorporated business similar to that of a partnership.
• Joint ventures have become popular in recent years;
particularly in export oriented projects.
Subsidiaries
• To establish a business in Sri Lanka foreign companies can
incorporate as a local subsidiary company.
• A subsidiary in Sri Lanka must comply with all statutory
requirements imposed on domestic companies.
Branches
• A company incorporated outside Sri Lanka may establish a place
of business in Sri Lanka by registering a branch office with the
Registrar of Companies.
• Applications for registration must be made within one month of
establishing a place of business in Sri Lanka.
• Generally approval from the relevant line ministry would be
required before the registration can be completed.
• The liability of a branch extends to its foreign assets.
Liaison / Representative Offices
• A company incorporated outside Sri Lanka may maintain its
presence in Sri Lanka through a representative office, and is of
similar status to that of a branch office.
• Company is prohibited from engaging in any trading or
investment activity or accruing any turnover in Sri Lanka.
• No tax incident arises since it is not permitted to trade.

38. TAX SYSTEM IN SRI LANKA
www.srilanka.ahk.de
Personal Income Tax
• Tax Free Allowance
LKR 500,000 for all sources of income Additional
tax relief of LKR 700,000 for employees only
• Rates of Tax – 2018/2019
Taxable
Income (LKR)
Rate
%
Cumulative
Tax (LKR)
First 600,000 4 24,000
Next 600,000 8 72,000
Next 600,000 12 144,000
Next 600,000 16 240,000
Next 600,000 20 360,000
Balance 24
Withholding tax on
interest
Rate %
Assessable income -
Interest paid to a resident
person (other than senior
citizen
15
Interest to non-resident
person
14
Rent paid to Resident
person
10
All other cases including
non-resident person
14
Corporate Income Tax
On profit and Income Rate %
Small and Medium enterprise 14
Company predominantly
conducting a business of exporting
goods & services
14
Company predominantly conducting
an agricultural business
14
Company predominantly providing
educational services
14
Company predominantly engaged
in an undertaking for the promotion
of tourism
14
Company predominantly providing
information technology
14
Persons engaged in betting &
gaming, liquor or tobacco business
40
Companies other than taxable at
40% and 14%
28
On dividends distributed 14
Remittance of profits 14
• Withholding Tax
Source: Department of Inland Revenue Sri Lanka
Value Added Tax (VAT)
• Standard rate – 15%
• Exports & specified international services - zero rated Registration
Threshold for VAT is Rs 3Mn per Quarter or Rs 12Mn per annum

39. TAX SYSTEM IN SRI LANKA
www.srilanka.ahk.deSource: Department of Inland Revenue Sri Lanka
Nation Building Tax (NBT)
• 2% is payable by importers, manufacturers, service providers on their
turnover and wholesalers & retailer on 50% of their turnover.
• Registration Threshold
Liable turnover Rs 3 Mn per quarter or Rs 12 Mn per annum
Telecommunication Levy - 25%
Share Transaction Levy (STL)
• Payable by every buyer and seller on the turnover of every
share trading transaction conducted through a stock exchange
at 0.3% on the turnover

40. COMMERCIAL AGENCY IN SRI LANKA
www.srilanka.ahk.deSource: Department of Foreign Exchange, Law of Agency in Sri Lanka
• A relationship of principal and agent as known in English law can be determined by private contract.
• According to the previous Exchange Control Act, there was a provision for Agency which represents a foreign company,
that has to be approved by the Controller of Exchange in Sri Lanka. But, according to the Foreign Exchange Act No. 12 of
2017, there is no any provision for Agency.
Duties of an agent to his principal
• The Agent must follow the Principal’s instructions
• The agent must act in person and not delegate his duties
• Agent’s duty to exercise reasonable diligence, care and skill
• Agent’s duty to maintain accounts
• Agents duty to act in the Principal’s interest
Duties of the Principal towards the Agent
• The right to remuneration
• The right to an indemnity
• The right to exercise a lien

41. YOUR WINDOW TO BUSINESS WITH SRI LANKA
Delegation of German Industry and Commerce in Sri Lanka
• Market Access Support (Partner searching, Market information, Market studies)
• Trade Fair Support (Consultancy and Information)
• Legal Information
• Debt Collection and Mediation
• Vocational and Continuous Training
• Public Relationship Support
AHK Sri Lanka was officially inaugurated on 27th March 2018, with
the purpose of enhance the bilateral economic relationship
between Germany and Sri Lanka,
www.srilanka.ahk.de

42. www.srilanka.ahk.de
THANK YOU