Weighs in on Sri Lanka’s Capacity to Attract Foreign Direct Investments
One of the largest private business registration firms in Sri Lanka, Simplebooks has assisted countless companies to set up and grow their businesses. Now, more than ever, the company reiterates the importance for the country to welcome Foreign Direct Investments.
“Foreign Direct Investments are a great way for Sri Lankans to accelerate and grow their companies” said Aabith Sabeer, the CEO of Simplebooks. “Looking at it from a local perspective, FDIs could mean more capital for companies and job opportunities for people, companies could adopt foreign methodologies, absorb new knowledge, improve efficiency and effectiveness as well as improve quality of work for employees” he added.
Simplebooks believes that initiating a FDI in Sri Lanka is a guided process. Investors first need to carry out a feasibility study in relation to the business that they will be investing in. This will ensure that they are compliant with all the best practices required of them.
In terms of the legal aspect, investors need to have an understanding of all laws applicable towards their investment, such as labour laws, auditing practices and taxation in Sri Lanka. It is recommended that investors familiarize themselves with these aspects before initiating an investment, as authorities such as the labour courts are very stringent on companies that do not abide by the Sri Lankan laws and regulations.
Additionally, understanding these laws and practicing them efficiently will help companies attract great talent.
Once the initial studies have been carried out, an investor can invest in Sri Lanka by either setting up a local company (and investing their capital in it) or by purchasing stocks in an existing local company.
However, foreign investors can face an array of limitations when setting up depending on the respective industry. To combat this, companies could liaise with the Board of Investments in Sri Lanka.
It is crucial that investors are aware and compliant with Sri Lankan auditing practices and standards. Mismanaged books and irregular audit practices could consequently result in hefty penalties from the SL government.
Since companies cannot carry out their own audits, hiring a well-reputed audit firm in Sri Lanka is very important.
Supplementary knowledge on Income taxes and VAT in the country also helps companies stay ahead of the curve. Any large investment will produce products or services that will pass a certain VAT exemption threshold. Once this happens, paying VAT will be essential.
Simplebooks is one of the largest private company registration firms in Sri Lanka. It has helped over 2,000 businesses set up within the short span of four years. Since its inception, Simplebooks has expanded its services from company registrations to bookkeeping, payroll management, taxation, auditing, and legal counsel. The company is also operational in Banglades