Geographical location, access to regional markets:
Top attractions for foreign investors
Foreign investors find Sri Lanka's close proximity to the East-West
trading routes and easy access to regional Asian markets to be the
biggest attraction for investing in the island.
A survey conducted by the Economic Intelligence Unit of the Ceylon
Chamber of Commerce revealed that access to regional markets as the top
attraction factor by over one-third of respondents, and 'Geographical
location' was ranked the highest among factors that shape their decision
to invest in Sri Lanka.
The Colombo Port.
Pic: ANCL Media Library
The survey was conducted among prospective investors who attended the
Ceylon Chamber's 'Sri Lanka Investment and Business Conclave 2016' in
Among the other factors that investors looked for in Sri Lanka, 18
percent reported 'Economic policy certainty', 16 percent - 'Political
stability' and 12 percent - 'Low cost of production'. 'Quality of
infrastructure' was considered as a key factor by only six percent,
possibly indicating that investors perceive infrastructure in the
country as having improved, relative to other competing investment
destinations they may be exploring.
Meanwhile, 'tax incentives' was also a low consideration, as only six
percent of respondents, said it was a key factor for investment
Chief Economist, Ceylon Chamber of Commerce, Anushka Wijesinha said,
"This has important implications for policies around investment
attraction. Growing international evidence suggests that tax breaks are
low on the priority list among top investors, compared to other factors
that shape the investment climate such as policy predictability and
political stability, access to markets, rule of law, and finding skilled
"The fact that, overwhelmingly the investors we surveyed said Sri
Lanka's location and access to big markets such as India, Pakistan, and
eventually China, was a key attraction in their decision to invest here
reiterates the case for focussing on our trade, investment and logistics
policies. We must become an attractive regional hub," he said.
When asked to rank (on a scale of 1 to 5, with 1 being the lowest and
5 being highest) various factors that influenced their decision to
invest in Sri Lanka, 'Geographical location' ranked the highest (4.33 on
average), followed by 'Political stability' (3.96), 'Quality of the
workforce' (3.88), 'Quality of infrastructure' (3.59) and 'Macroeconomic
stability' (3.51). 'Geographical location' received the most number of
respondents ranking it high at 4 or 5, and 'Quality of infrastructure'
received the most number of respondents ranking it low at 1 or 2.
In terms of other characteristics of the respondents, the majority of
respondents, accounting for 46 percent of the respondents said the key
reason for attending the conclave was to meet potential investors and
joint venture partners, while 37 percent reported that it was to gain
market insight and 17 percent had come to meet government officials and
The majority of the respondents (61 percent) were investors
(including investment groups), while 19 percent were business support
providers, four percent were from research institutions, two percent
were buyers, and the rest did not classify.
The top five industry sectors the investors came from were export
manufacturing (21%), infrastructure providers (including equipment)
(19%), agriculture (8%), tourism and leisure (8%) and petroleum,
telecoms, power and energy (10%).
The 'Sri Lanka Investment and Business Conclave 2016' attracted over
120 foreign investors, including large delegations from East Asian and
Middle East countries and was the first such initiative by a Chamber in