The scheduled restructuring of Sri Lanka’s Board of Investment (BOI) into three new entities under the Economic Transformation Act (ETA) is facing delays and may even be shelved by the incoming government, according to top lawyer. 

The ETA which was enacted on 9 of August this year was initially aimed to transform the BOI into three distinct bodies— the Economic Commission, Invest Sri Lanka, and Zones SL.

Key parts of the Act which includes restructuring of BOI was only set into operation within three months from the date of certification of the Act by the Speaker. However, there is no order published in the government gazette so far while the three-month deadline surpassed on 9th of this month. 

“It doesn’t look like the parts of the Economic Transformation Act (ETA) that deal with the restructuring of the Board of Investment of Sri Lanka into three new entities known as the ‘Economic Commission’, ‘Invest Sri Lanka’ and ‘Zones SL’ will be coming into force within the intended timelines, with a possibility that they may even be done away with as a whole by the new government to be elected later this week,” Sudath Perera Associates Partner (Head of Corporate & Commercial Law) Dushyantha Perera stated in a social media post.

He noted that it might be possible that the interim government which consists of three Ministers “is a little stretched for capacity at the moment”.

Moving forward, Perera noted that a NPP-led government will look to amend or repeal the law as a whole as it imposes significant restrictions and conditions on managing the economy. 

“It’s also likely that an NPP-led government will look to amend or repeal the law as a whole, given that Chapter 1 is already in force and has created the requirement for a ‘National Policy on Economic Transformation’, imposing significant restrictions and conditions on how they may want to manage the economy (with specific statutory, targets for GPD growth, the BoP deficit, government revenue, export revenue, the budget balance and FDI),” he added. 

The ETA which was backed by IMF, was opposed by BOI employees, number of investors and considerable number of legal experts including former Bar Association President Upul Jayasuriya.

However, Perera pointed out that BOI in particular requires significant restructuring to regain its status as a catalyst for attracting investment into the country.

“Let’s hope that a surgical approach is taken to the ETA, instead of a wholesale rejection,” he said. (NF)