Background Information

On The New Board of Investment Bill

The Bill in its long title states that : -

“The Bill provides for the establishment of the Board of Investment; to vest
the Board with such powers as are necessary for facilitating the resurgence
of the economy of the Republic and working towards the development of the
country by promoting and facilitating investment; to provide for the
establishment of Regional Economic Development Commissions; to repeal
the Board of Investment of Sri Lanka Law No.4 of 1978; and to provide for
matters connected therewith or incidental thereto”.

The Bill was gazetted on 30.09.2002 and consists of Four Chapters and a
Schedule.

The proposed legislation has been presented in Parliament and this new Bill
has to be prepared in fulfillment of a pledge of the government to set up
Regional Economic Commissions to speed up the process of development
countrywide.

The Bill provides for the establishment of the Board of Investment and also
the Regional Economic Development Commission and also provides provision
to repeal the Board of Investment of Sri Lanka Law No.4 of 1978. (Section 2
& 41)

The Bill seeks to restructure the present Board of Investment of Sri Lanka
and also to demarcate five regions each of these will have a Regional
Economic Development Commission.

Board known as the Board of Investment will be set up. That It will be a
corporate body and will consist of -

1. The Office of the Director General and

2. The Regional Economic Development Commissions. (Section1 & 2)

The Board will consist of a Director General, the Chairmen of the

Commissions and three members. The Director General will be appointed by
the President on the recommendation of the Minister concerned. The three
members will also be appointed by the President on the recommendations of
the Cabinet of Ministers and will comprise professionals in the field of
finance, industry, trade and banking. (Section 4)

The objectives of the Board (Section 3)

The objectives of the Board have been broadly identified as :

? To stimulate the growth, expansion and development of Sri Lanka’

s
economy by encouraging and promoting investments.

? To formulate investment policies, plans, promotional incentives and

marketing strategies.

? To diversify the sources of foreign exchange earnings and to increase

export earnings.

? To promote Sri Lanka as an international business centre.

Staff

The Board will have a staff to facilitate its task and it will have disciplinary
control over members of the staff. The Board will also determine the salaries
and wages of the staff and also determine the terms and conditions of
service of the staff on the general directions issued by the relevant Minister.
(Section 8 & 9)

The Director General and powers of the Board

The Director General will be the Chief Executive Officer and will hold office for
a period of three years. The Board is empowered to enter into agreements
with enterprises and engage in community and infrastructure development in
areas coming within the purview of the Commissions as well as to provide
funds and resources to the Commissions. (Section 5 & 6).

Office of the Board and area of jurisdiction

The Board shall have its principal office in Sri Lanka and may establish
branches outside Sri Lanka. (Section 12)

Areas of Authority and licenced Zones may be declared or established under

the Board and the Commissions by the Cabinet of Ministers and the Board
will have jurisdiction over such areas and zones. (Section 13)

Funds of the Board

A fund will be established for the general financial purposes of the Board to
receive government grants, to credit all rates and levies as provided in the
Act, all revenue derived by the Board from services provided by the
Commissions and all other sums otherwise accruing to the Board.
(Section 22)

Investment Promotion Plan

The Act provides for the preparation of a Investment Promotion Plan. The
Board is required under the Act to submit to the Cabinet of Ministers on
behalf of the Commissions, a three-year rolling plan or plans for the
promotion of investments in Sri Lanka, formulated in consultation with the
Commissions. The focus of such plan or plans should be to stimulate
investment for economic development, promote Sri Lanka as an international
business centre, foster and general economic development of each region
among other such matters. (Section 26)

Establishment of the Commissions

The Act provides for the establishment of five Regional Economic
Development Commissions (Western Region, Southern Region, North-East
Region, Central Region, North-Western Region) with the purpose of
promoting investment and generating economic development of the specified
regions.

Constitution of the Commission

Each Commission will consist of a Chairman, a Director General and three

other Directors with the Director General functioning as the Chief Executive
Officer. Members of the Commission will be appointed for a period of three
years. (Section 27)

Objectives of the Commissions

Among the objectives of the Commissions are:

(a) To promote resource based development within their

respective regions;

(b) To encourage and promote the establishment of

manufacturing, commercial, agricultural and service enterprises within
the region;

(c) To wide and strengthen the base of the regional economy.

(d) The Commissions are also required to formulate and submit to

the Board a three year rolling plan or plans for the development of the
respective regions.

(Art 28)

The Commissions will carry out their tasks in consultation with the respective
Provincial Councils.