Sri Lanka is strategically located at the cross roads of both east and west sea routes and serves as the point of entry to South Asia. 

Colombo Port 

•According to the Lloyds Register the Colombo Port ranks as No. 01 port of South Asia and the 26th in the World.

•Throughput has grown at a compound annual rate of 20.3% over the last seven years. •Transshipment cargo accounts for 72% of throughput.

•23 major shipping lines and 7 feeder services operate out of Colombo.

•The Colombo Port is computerized and linked to all major freight stations. The Hub Port of South Asia offers youAn ideal geographical location with minimum deviation from shipping lines.

•Fully equipped berths for late container vessels. •Excellent feeder network. •Fast turnaround and round the clock service.

•EDI facilities with two modern container terminals, with state of the art technology and control systems.

•The most competitive rates in the region.

•Multi country consolidation and entrepot cargo.

•Flexibility to meet customer needs.  

Work is also in progress to develop and upgrade the port of Galle located in the south and the port of Trincomalee on the north east coast of Sri Lanka www.slpa.lk Bandaranaike International Airport (BIA)

The BIA is a regional hub of air transportation and is considered to be # 1 in South Asia.  

•Major airlines operate frequent flights from BIA to important cities in Europe, Middle East, Far East, Australia, and the Indian Sub Continent.

•Passenger movement at BIA has increased from 2,234,962 in 1995 to 2,880,387 in 2000, a 29% increase. •The cargo movements at BIA has increased from 76,312 tonnes in 1995 to 127,116 tonnes in 2000 respectively, a marked 76% increase.

•The aircraft movement in the same period has increased from 16,543 to 21,058, a 27% increase. Global Logistics HubSri Lanka will be developed as a major Global Logistics Hub in the South Asian region for trade, investment, communications, and financial services. Known as the Colombo Freeport, it will provide integrated air, sea and road services linked to state of the art distribution parks. Construction of the Freeport is expected to be completed by January 2002.  Key Features of Colombo Freeport 

•Distribution parks at air and seaports

•Quality physical infrastructure facilities

•Warehousing & administration facilities

•Superior IT/telecom facilities •Public/private participation •One-stop service centre

•Private sector management •Attractive incentives for operators and users  Key Activities of Colombo Freeport 

•Multi-country consolidation •Regional distribution

•Transhipment

•Entrepot trading

•Import/export and value addition   

Today, Sri Lanka is ranked as the most liberalized economy in South Asia. Investors are provided with preferential tax rates, constitutional guarantees on investment agreements, exemptions from exchange control and 100% repatriation of profits. Total foreign ownership is welcome in almost all areas of the economy, with only a few areas limited or restricted to foreigners. Quality of Life- Economic Freedom- Business Environment  Quality of Life  Sri Lanka leads the South Asian region in terms of human development indicators, with its high literacy rate of 91% placing it way ahead of other South Asian nations & on par with those of south east Asia. Its national health indicators are comparable with those of the developed world.  This is underscored by the relatively high ranking the country has received in terms of GDP p.c. (PPP), which at US$3,530 is higher than that of India (US$ 2,358), Pakistan (US$ 1,928) & Bangladesh (US$ 1,602).  Sri Lanka was placed 89th (Medium Human Development Category) out of 173 countries in the Human Development Indicators constructed in 2002, ahead of China (96th), Vietnam (109th), Indonesia (110th), India (124th), Pakistan (138th) & Bangladesh (145th).  The Human Development Index (HDI) measures a country's achievements in three areas of human development viz: longevity, knowledge & a decent standard of living. Longevity is measured by life expectancy at birth. A combination of adult literacy & the combined primary, secondary & tertiary gross enrolment ratio is used as a measure of knowledge while GDP per capita (PPP) is used to measure the standard of living.  

Human Development Index of some selected countries   

Economic Freedom  The 2004 Index of Economic Freedom published by the Heritage Foundation has ranked Sri Lanka 76th out of 155 developed & developing countries, in terms of its “economic freedom” & the quality of its overall policy environment.

Index of Economic Freedom Rankings – South & South East Asia –2004 (Selected Countries)

Source: 2004 Index of Economic Freedom

The Index, published since 1995, includes a broad spectrum of institutional factors that determine the extent of economic freedom in a country.  

The economic variables used to measure the level of economic freedom are grouped into 10 broad categories viz:- 

•Trade policy,

•Fiscal burden of government,

•Government intervention in the economy,

•Monetary policy,

•Capital flows and foreign investment,

•Banking & finance

•Wages and prices

•Property rights,

•Regulation

•Informal Market  Business Environment  

In the EIU's country forecast, Sri Lanka's overall score in the business environment rankings improves from 4.99 for the historical period (1997-2001) to 6.03 for the forecast period (2002-2006). The country's global ranking improves from 49th to 45th and its regional ranking moves from 14th to 13th in comparison to the historical period. The higher rankings are indicative of the more attractive investment climate in the country, with Sri Lanka's score in most of the categories used to evaluate the business environment improving significantly. For instance, Sri Lanka is ranked highly for its liberal approach to foreign investment, with its global & regional rankings moving from 36th to 27th (out of 60 countries) and 8th to 4th (out of 16 countries) respectively. From a regional perspective, the country's main advantages centre on its open foreign investment regime, its commitment to private enterprise & competition & its liberalized trading environment (where it is ranked 5th).  

Strategic Access to the Indian Market   

The Indo Lanka Free Trade Agreement clearly demonstrates the political goodwill and commitment between India and Sri Lanka. The agreement creates multiple investment opportunities for local and multinational firms based in Sri Lanka seeking to enter the Indian market. The underlying premise of the agreement is to create a free trade area through the complete or phased elimination of tariffs, which will occur over defined phases. 

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 the provisions of a bilateral investment agreement otherwise than in the interests of national security. 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).