The Economic Development Ministry is in discussion with the Board of Investment (BoI) to reduce the minimum initial investment threshold for BoI ventures expecting to set up operations in Sri Lanka, in a bid to attract small and medium scale foreign direct investments (FDIs) to the investment hungry nation.

“There were calls from various countries to bring down this limit which currently stands at US $ 500,000. So, we have taken these requests seriously and currently, our ministry is discussing with the BoI to bring down the investment ceiling to allow investments from SMEs,” Economic Development Deputy Minister M.L.A.M. Hizbullah said.

This was revealed at a forum organised by the European Chamber of Commerce in Sri Lanka in partnership with Flanders Investment and Trade, the trade and investment promoting agency of Flanders, Belgium.

Honorary Consul of Belgium Pierre Pringiers said that although there had been many Belgium SMEs who were looking to expand their businesses in Sri Lanka, the minimum investment ceiling by the BoI has discouraged them.

“US $ 500,000 is too much for many of our SMEs who like to expand operations in Sri Lanka. In my opinion, it should be brought down to at least US $ 100,000,” Pringiers said.

However, the ministry has not yet decided on a desirable level of investment threshold, said the Deputy Minister.

“The issue we have is, if we are to reduce this minimum limit, the same rule should apply to our local investors. We cannot discriminate them. So, we have to think both sides,” he explained.

According to the BoI, the minimum investment threshold for agriculture and service-related investments is Rs.25 million (or US $ 200,000) and Rs.50 million (or US $ 400,000) for industrial-related investments, applicable for both local and foreign investors.

The BoI’s ‘national treatment policy’ does not discriminate between local and foreign investors.

A delegation consisting of 15 Belgian businessmen representing various business sectors is on an exploratory mission in Sri Lanka from May 24 to June 01 and will hold one-to-one business discussions with local counterparts.

The bilateral relation with Belgium dates back to 1865 and is the fourth largest European trading partner of Sri Lanka. SMEs consist of 70 to 80 percent of Belgium economy.