BOI investors want exemptions on dollar conversion
Investors granted exemptions under Board of Investment (BOI) laws have been assured these will be retained even under the provisions of the 2017 Foreign Exchange Act to open separate Inward Investment Accounts (IIA).
But now investors hope this exemption will be effected for the newly imposed dollar conversion as well.
The Central Bank in a new direction issued in a letter to all dealers on December 24 ensures that all exemptions granted under Section 17 of the BOI Act No. 4 is valid and the former Foreign Currency Banking Unit (FCBU) account holders need not have a separate IIA account in future to carry out their equity transactions, FTZ Manufacturers Association General Secretary Dhammika Fernando said.
In this respect, the Central Bank has asked dealers to “accommodate any foreign exchange transactions carried out by such companies, considering the exemptions granted as per the agreements entered with the BOI”.
Investors have faced severe restrictions in the operation of Foreign Currency Banking Unit (FCBU) accounts contrary to the provisions in the exemptions granted under Section 17 of the BOI law No. 4 of 1978. Investors were facing issues in the operation of IIAs which enable investors to bring foreign currency into Sri Lanka for new investments, expansions, dividend payments, disposal of liquidation, and recovery of loans. IIA is a special account designated for eligible investors resident in or outside Sri Lanka to route funds to invest in the permitted investments.
But now exporters believe that this same rule should apply to the direction imposed by the Central Bank to convert the balance dollars in their accounts to rupees. The residual amount conversion rule brought in by the banking regulator is also expected to be exempted from the BOI companies, Mr. Fernando said.