Invest in Sri Lanka


Industrial exports have long played a crucial role in Sri Lanka’s economic output. Over the years, an emphasis on export orientation has led to greater productivity and employment generation.  The island’s location and market structure have also allowed it to pursue niche production opportunities, marketing itself as a vital component in value chains or an alternative manufacturing site. Today, this sector is facilitated with various tax concessions and other benefits to encourage greater output and revenue and employment generation.

Why you need to consider investing in this sector

  • Sophisticated manufacturing segment that has gained recognition for quality, ethical practices and customization
  • Geo strategic location with efficient air and port connectivity with the rest of the world
  • Sri Lanka’s Free Trade Agreements with India, Pakistan and Singapore which provides duty free access for selected manufactured products exported to these markets from Sri Lanka
  • Sri Lanka being a beneficiary of the GSP Plus facility offered by the European Union which gives duty free/reduced duty access to the EU countries when exported from Sri Lanka
  • Possibility for companies to operate as Board of Investment (BOI) projects and benefit from incentives
  • concessionary corporate tax rates of 14% for companies exporting goods and services compared to the usual 28%
  • deduction of 200% of research and development expenditure for three years and depreciation allowances for assets
  • Customs duty exemptions on capital goods during the project implementation period
  • The import of raw materials is free of Customs import duty, value-added tax, ports and airport levy, and Nation Building Tax



The textiles segment has been the largest export revenue earner for the past 30 years, making it a substantial contributor to the economy and employment, comprising 30% of manufacturing jobs in the nation. In recent years, the government has taken steps to enhance the performance of the apparel industry with a host of large investments made in innovation and sustainability. Sri Lankan textile manufacturers are used to produce apparel for globally competitive companies such as Abercrombie & Fitch, Marks & Spencer, Tommy Hilfiger and Victoria’s Secret.



One manufacturing sector the state has earmarked as having high potential for growth is the pharmaceutical industry. Indeed, officials have targeted producing 85% of the drugs needed by the domestic market by 2020, which would save Sri Lanka an estimated LKR40bn ($252m) per year. In order to help achieve this goal, financing has been provided as part of $11m in aid from the Japan International Cooperation.


Automotive components

At present, Sri Lankan companies are engaged in manufacturing high quality Auto-mobile components for both export and local markets. The product range includes wire harnesses, sensors, airbags, precision moulds, truck trailers, seat belts, seats and electrical equipment relating to this industry. In addition to this, rubber products such as carpets, beading, mud flaps, washers, bushes, gaskets, as well as products such as leaf spring, center-bolts, bronze bushes, coil springs and bearings are produced at present.

Manufacturing auto-mobile components in Sri Lanka would be an opportunity for a company to tap into Global Value Chains in the rapidly growing automobile industry.