IT BPO in Jaffna

Prepared byResearch and Policy Advocacy Department (In consultation with Sector Teams, Eng. Approvals Dept., Env. Dept. & Legal Dept.)

October, 2013

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Sri Lanka is fast emerging as a top off shoring specialized services. As sited in the A.T. Kearney's destination for IT and BPO services globally. The Competitive Benchmarking (2012), Sri Lanka is continuous improvement of macroeconomic emerging as a hidden gem for IT/Business Process conditions has enabled the country to be Outsourcing and Knowledge Services increasingly recognized as one of the leading Outsourcing. Despite the limited size of the outsourcing hubs in the region. This has been workforce in relation to other large outsourcing substantiated by a Global consulting giant, A.T. players such as India, Sri Lanka possesses highly Kearney's 2011 Global Services Location Index, skilled professionals for niche services in IT where the country is ranked at 21 among the top testing, finance and accounting, with the highest 50 outsourcing destinations and Colombo was number of Chartered Institute of Management ranked among the top 10 emerging outsourcing Accountants (CIMA) graduates in the world cities by Global Service Magazine. The country outside of the UK, and legal services. Sri Lanka has has also placed at the 71 position out of 142 23 accredited Universities and numerous private economies in the network readiness index in higher education institutes offering full degree 2012. programmes in the disciplines relevant to

knowledge service Industry. More than 5,500 IT/ IT Enabled Services (ITES) sector is forecasted graduates with IT related degrees and post to be amongst the most massive gain sector of graduate degrees are now joining the workforce the country's economy with 20 percent annual each year. Further, the country produces close to growth rate, in terms of revenue. The 400,000 English speaking, IT Literate individuals performances of the sector are encouraging with each year. 34% increase to USD 355 Mn in Gross inflows on account of exports of software, BPO and other The location of Sri Lanka in terms of time ITES in 2011. The industry is considered as the differences allows it to cater to the European, fifth largest foreign exchange earner at present Australian and the American markets. SEA-ME- and it is expected to exceed USD 1 billion by 2016. WE 4 project; Sri Lanka's alliance with 15 other

international partners has enable the country to have better competitiveness through higher connectivity, better reliability, improved security and enhanced speed with various services being at the same level as those in developed countries.

The government has taken a number of initiatives to fast track the development and expansion of the sector by providing fiscal and other incentives. Leading global IT/ITES companies have trusted Sri Lanka for its enabling business environment, qualified talent pool and economic, social and political stability. Some of

The IT workforce in Sri Lanka has almost doubled the reputed IT/ITES firms operating in the from 34,000 in 2006 to 63,000 in 2011. The industry include; HSBC, WNS Global Services, number of direct Information Communication Industrial & Financial Systems (IFS), Amba Technology (ICT) job opportunities created in the Research, RR Donnelley, Virtusa, eCollege, coming years is also estimated to be close to Eurocenter, Valista, Millennium Information 10,000 per year and Sri Lankan IT/ITES Industry Technology, Innodata Isogen etc. will grow to a 100,000 IT jobs by 2016. Over the past three to four years Sri Lanka has All these factors place Sri Lanka in a prime been prominently recognized as an emerging position to establish itself as one of the top outsourcing destination for key functions and outsourcing destinations.

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213230 245

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50

150

200

300

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2006 2007 2008 2009 2010

USD Mn

IT/ITES Export Earnings

Source: Export Development Board, Central Bank Annual Report

250

100

2011

355

Knowledge Process Outsourcing:

Development Permit (Building approvals)(if applicable)

Work Permit & Residence Visa

(Ministry of Defense and Dept. of Immigration & Emigration)

SIA: Securities Investment AccountFCBU: Foreign Currency Banking Unit for details please refer infrastructure brochure Residence visa can be obtained at any stage of the process

Department of Inland Revenue

Customs Duty, and PAL Exemptions on imports of capital goods (for large scale undertakings)

For the importation of project related plant, machinery or equipment, the applicable Customs Duty, VAT and PAL will be deferred/ exempted during the project implementation period, and the said deferment will be treated as an exemption on the fulfillment of the conditions specified by the Board of Investment of Sri Lanka.

VAT

Registration Criteria : if turnover of a quarter isRs. 50 Mn. or more subject to aceiling of Rs. 30 Mn. Per quarter(can be set off against income tax)

Computers : Exempted Other-Export Oriented : Differ -Local Market: 12%(for large scale projects VAT will be differed during the project implementation period)

5%

PAL will be differed for plant, machinery orequipment during the project implementation period

For large scale projects,

Telecommunication Levy On the value of supply services

10% In respect of services provided through Internet /Broad Band

Sri Lanka Customs40, Main StreetColombo 11, Sri LankaTel:+94 11 2445147Fax:+94 11 2446364E-mail:[email protected]

Prepared byResearch and Policy Advocacy Department (In consultation with Sector Teams, Eng. Approvals Dept., Env. Dept. & Legal Dept.)

October, 2013

Desig

ned b

y C

hanaka K

um

anayaka (

BO

I M

edia

Dept.)

P

rinte

d b

y K

aru

nara

tne &

Sons P

vt (L

td)

Oct

ob

er, 2

01

3