News
Colombo, Hambantota Free Ports, Katunayake, Koggala, Mirijjawila EPZs Bonded Areas
View(s):The Colombo and Hambantota Ports have been declared as Free Ports, while the Katunayake, Koggola and Mirijjawila Export Processing Zones (EPZ) have been declared as Bonded Areas under new regulations made under the Finance Act. The regulation cited as the Commercial Hub Regulation No.1 of 2013, will apply to any new enterprise established or incorporated in Sri Lanka, and engaged in any certain following business activities, where at least 65% of its total investment has been from foreign sources, including and transfers from a Foreign Currency Banking Unit of a licensed Commercial Bank operating in Sri Lanka, and of which, the total turnover is from export of goods and, or services.
The enterprises include entreport trade involving an import, minor processing and re-export, and offshore business where goods can be procured from one country, or manufactured in one country, and shipped to another country without bringing the same into Sri Lanka. It will also cover operations of the headquarters of leading buyers, for the management of the finance supply chain and billing operations, and logistic services such as a bonded warehouse, or in the case of operation of multi-country consolidation in Sri Lanka.
Further, if an enterprise engaged in entrepot trade in manufacturing a product, and having considered the importance of availing such product in the domestic market in the interest of the national economy, such Enterprise may be permitted domestic sales up to a certain percentage payable in Sri Lanka Rupees, and permission for such sales shall be given by the Board of Investment (BOI), with prior concurrence of the Minister of Finance.
These new Enterprises however, will have to operate such business activities in a Free Port, or in a designated Bonded Area. The minimum investment of a new Enterprise engaged in business activities will be US$ 5 million, required to be invested in fixed assets within six months from the date of the related agreement signed between the Enterprise and the BOI. The Enterprise will also be required to achieve annual re-export turnover of not less than US$ 20 million over a period of five years from the date of commencement of operations of such business.
The regulation made by President Mahinda Rajapaksa, in his capacity as Minister of Finance and Planning, also declares the Colombo and Hambantota Ports as Free Ports, for the operation of this regulation. The Katunayake and Koggala EPZs have been declared in terms of the BOI Law No. 4 of 1978, as Bonded Areas, and the Mirijjawila EPZ too has been declared as a Bonded Area, for the purposes of this Regulation.
Follow @timesonlinelk
comments powered by Disqus