Dollar salaries, no income tax

Colombo International Financial Centre:

The government aims to offer a wide ranging product mix in the centre, including banking, capital market, wealth management, global processing, alternative financing, insurance and professional services.

“The shipping sector will also be encouraged,” Rajudin said, in a presentation at the Colombo International Maritime Conference, which described how the CIFC will operate, its structural and legal changes in the finance system for an International Finance Centre.

“There will be no personal tax on income originating from this zone,” he said. “We are planning to have system where all employees, including Sri Lankans earn in US dollars – so that our expats can come back.”

Outlining the key features of the CIFC, Rajudin said it will be an onshore and offshore financial free zone and a tax-free zone with initially a 50-year tax-free period with land ownership through 99 year leases.

“It will be a multi-currency one – we will encourage all currencies into this zone.” The CIFC’s administrative infrastructure will comprise three sectors - a regulatory authority, an investment authority and a special court.

The regulatory authority will regulate financial services while the investment authority – known as the Financial City Corporation – will handle the operations and management of financial city, its development and administer its laws and regulations.

The special court will handle civil and commercial cases and also have an employment division and an appeal court.

“That means the entire financial centre will be managed through a separate court,” Rajudin said. “Laws will be enacted to protect investors, with laws to administer the infrastructure in phase 1 and supporting laws in phase 2. Parties will be given a choice of selecting the law – if they are not in agreement we will encourage them to adopt English law.”