• BOI pins decline on removal of incentives offered to foreign investors
• Concerns over gap between approved and commenced projects  
• Strategic development incentives discontinuation impacting major investments

A decrease in interest in investing in Sri Lanka has been observed due to the removal of incentives previously offered to foreign investors, warns the Chairman of the Board of Investment (BOI).

Speaking to The Sunday Morning Business, BOI Chairman Dinesh Weerakkody revealed that they had observed a decrease in interest among investors with regard to investing in Sri Lanka following the removal of the incentives previously enjoyed by BOI-approved companies.

He pointed out that the tax rates for BOI companies had risen by around 20-25% and that export companies had seen their taxes increase by 100% as a result of the corporate tax hikes introduced last year, which saw rates increase from 14% to 30%

Elaborating further, he stated: “The Strategic Development Projects incentive, which was a very valuable incentive used to bring down projects such as the recently-opened ITC Ratnadipa, is no longer available.”

Responding to a query on the number of BOI projects that were in the pipeline, he pointed out that around $ 2.1 billion worth of projects had been approved by the BOI in 2023, whereas only around $ 750 million worth of projects had actually commenced in 2023, which included projects approved in 2022 as well. 

Therefore, he said that there were essentially over $ 1.4 billion worth of BOI projects in the pipeline that were scheduled to commence in 2024 or subsequent years.

“Projects worth $ 2.1 billion were approved in 2023 with an agreed timeline and they will come onboard within a year or two – that’s how it works, they don’t happen overnight. There is an approved project cycle and they have been approved for completion in two to three years’ time. Of this $ 2.1 billion, around $ 750 million came in last year and that includes projects approved in 2023 as well.”