| Law
Governing Foreign Investment When a company sign an agreement
with the Board of Investment, Sri Lanka, the specific incentives granted to an
eligible company, which may include tax holidays or preferential tax rates, exemptions
from customs duty and foreign exchange controls, remain valid for the entire life
of the enterprise. Constitutional Guarantee for Investments
Sri Lanka has an enviable record of political credibility
in the international arena. All major political parties are committed to free
enterprise and individual freedom. The government has never
defaulted nor requested rescheduling of any of its international obligations.
Significantly this protection extends to foreign investors. Bilateral
investment agreements supported by a constitutional guarantee, provides strong
protection for foreign investment for Sri Lanka. The safety
of foreign investment is guaranteed through the acceptance by two third majority
of Parliament of the Constitutional Guarantee of Investment Protection Agreements.
Under article 157 of the country's constitution, the agreement enjoys the force
of law and no legislative, executive or administrative action can be taken to
contravene it. Bilateral investment agreements are valid for
10 years, and are extended automatically unless terminated by either party. If
the agreement is terminated investments already made are protected for another
10 years. A clause in the Sri Lankan constitution ensures the
sanctity of the agreements. These agreements provide the following: - Protection
against nationalisation.
- Prompt and adequate
compensation if required.
- Free remittance
of earnings, capital and business fees.
- Settlement
of disputes under the International Convention for the Settlement of Investment
Disputes (ICSID).
Bilateral Investment
Protection Agreements exist between Sri Lanka and the following countries: Belgium/
Luxembourg, Canada, China, Denmark, Egypt, Finland, France, Germany, Iran, India,
Italy, Indonesia, Japan, Korea-South, Luxembourg, Malaysia, Netherlands, Norway,
Pakistan, Romania, Singapore, Sweden, Switzerland, Thailand, the United Kingdom
and the United States of America. Sri Lanka is also
a founding member of the Multilateral Investment Guarantee Agency (MIGA). This
provides further safeguards against expropriation and non-commercial risk. Investors
may also refer disputes for arbitration under the rules of the International Chamber
of Commerce. Property Insurance can be obtained in foreign
currency through domestic or foreign insurers. | 
