Firms shifting their headquarters from SL
If there is one thing that business leaders and entrepreneurs detest is insecurity in the macro environment.
Businesses run according to forecasts and situations about the future. However, as much as businesses take into account uncertainty, the one thing all want to avoid at all costs is the volatility in the macro environment stemming from political stalemate, extremism, and political dysfunction.
Firms in IT and garments are starting to shift their head offices out of Colombo to Singapore owing to the political crisis, regressive taxations and the general environment for business that Sri Lanka now presents.
A CEO of a large software firm told the Business Times that by month end he will be shifting the headquarters to Singapore. “We find it easier to do business in Singapore. Especially after the new tax system we were debating it as we find it very difficult when consolidating our accounts for certain expenses, etc and with the latest turn of events, we have decided to leave Colombo.”
The country’s political risk has been fractured by the stand-off between former Prime Minister Ranil Wickremesinghe and President Maithripala Sirisena.
A garment factory owner also had the same story to say as the CEO of the software firm. He said that with the new political situation they will be impacted with GSP + being shaky and their decision to shift came early this month. They have decided to shift to Singapore.
Political instability hurts most firms, he added noting this is mostly because employees are often forced to skip work due to strikes and other protests and this impacts on the businesses negatively. In addition, businesses like a region that is friendly and welcoming towards them and not an intimidating and surly dispensation, some others who are debating on whether to shift from Colombo or not said. “The point here is that political insecurity hurts everything from profits to operations to the working conditions of the employees. Because of this businesses avoid it,” an analyst added.