Business
Attracting foreign real estate investments amidst the economic turbulence in Sri Lanka
By Rohan Parikh
From the COVID-19 pandemic to its current economic turbulence, Sri Lanka has tackled many challenges thrown at them with resilience. Today however, Sri Lanka is under tremendous unrest and pressure and faces a challenging macroeconomic situation today. There are a bunch of contradicting factors that need to be mitigated – and this will require some difficult decisions. One of the things that can change the fortunes of Sri Lanka is foreign investments.
The role of foreign real estate investment
By its nature, the construction industry opens many opportunities for a foreign investor to consider a country as the ideal spot for their investment. Real estate is an infrastructure asset that adds to the wealth and asset base of the nation. It enables the creation of a stable middle class and secure working class.
Nearly 3/4th of construction sites in Sri Lanka are currently halted due to varying reasons: ever-rising cost of raw materials, unavailability of essential goods due to import restrictions, ongoing forex crisis and more. This has dealt a massive blow to the labour market as construction sites employ large numbers of labourers. It has also impacted many local suppliers of the hundreds of items needed for construction from doors, windows, steel, locks, tiles, glass, wood, and more. Thus it is critical to get the real estate industry moving again. To achieve this, it will be critical to make Sri Lanka an attractive destination for foreign investment.
Tools of change that the leaders of the nation have in their belt
Financial incentives:
Now, more than ever, it is critical that foreign investment in real estate be tax exempt. This exemption was mistakenly removed several years ago, at a time when taxes on domestic industries were disastrously slashed. The lack of tax benefits to foreign investors led to a slowdown in future projects funded by foreign exchange and impacted forex inflows.
Simultaneously, the tax cut on local companies led to a draining of the state budget. It left the country extremely vulnerable to a shock like COVID. Today, we hope that strong financial incentives are put in place to attract foreign investors back to Lanka. Without these, markets like India, Pakistan, Thailand, and Dubai will always seem like better avenues for investment.
Policy clarity:
It is important for foreign investors to perceive the country as having a stable regulatory environment. The period from 2016 to 2018 saw a lot of sudden changes in policy and processes that resulted in a great amount of uncertainty and trepidation amongst foreign investors. This needs to be avoided during any change of administration as it does long term damage to the country’s reputation amongst investors. Just as an example, the rule on VAT and NBT was changed 3 times in the space of a year during that period.
Protection of investors: A foreign investor must be made to feel welcome and safe. Despite the efforts of an overwhelming majority of forward thinking leaders and bureaucrats, a small minority can do a lot of damage.
In my own case, we were hounded and harassed by some politicians without cause, and were slandered in an extremely unfair and untrue attack by local media. We were attacked for being a foreign company and we lost a lot of business due to this slander. This frightened our staff and made many of our investors decide not to invest in Sri Lanka again. In the same breath, I am also happy to report that in the end, the legal system in Sri Lanka came to our rescue and the courts passed an order protecting us. We survived, shaken but still resolute in our commitment to Sri Lanka. Unfortunately, not all foreign investors have that kind of resolve, especially when there are other markets that offer more welcoming access. The need here is to empower the Board of Investment with real powers to tackle such roadblocks and to protect foreign investors.
I have been investing in Sri Lanka for over 15 years now. We were the first company to invest in Sri Lanka once the war ended. I have seen the resolve and strength of the nation and I am confident that this crisis will pass. I hope that we are able to learn from the crisis and come back better and stronger.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
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