The Bank of Tokyo Mitsubishi, UFJ became the first bank yesterday to sign a Memorandum of Understanding with the Board of Investment (BOI) in Sri Lanka to encourage Japanese investments.
The aim of the agreement is to promote Sri Lanka as an attractive investment destination to the bank's varied clientele, scattered across several countries.
The agreement entered with BOI allows investors who are considering investment in Sri Lanka to receive advice and support relating investment, besides enjoying incentives such as preferential tax rates and reduced custom duty under certain conditions.
With 764 Japanese branches and 75 foreign offices, the Bank of Tokyo Mitsubishi, UFJ is well-poised to encourage investors to Sri Lanka, officials assured.
"We can see the tendency of growing number of Japanese investors who are aware of the advantages of Sri Lanka such as high quality labor, advantageous geographical location, pro-Japanese nationality and rich resources for tourism with the backing of political and social stability in Sri Lanka," Chief Executive Officer for Asia and Oceania Go Watanabe told reporters.
He also noted that while the bank does not have plans to invest in Sri Lanka itself, if clients decide to invest in the country, it will consider opening a branch here. He outlined plans to consult with the BOI on a strategic campaign to pitch Sri Lanka to investors, particularly focusing on the five hubs and tourism initiatives of the government.
Officials on both sides also recalled the long relationship enjoyed by the two countries and mentioned the Memorandum of Understanding had been precipitated by a meeting between the Japanese Prime Minister and Sri Lanka President Mahinda Rajapaksa in March 2013.
Japanese Ambassador to Sri Lanka Nobuhito Hobo also hailed the agreement as a positive development ahead of Japanese Prime Minister Shinzo Abe's visit next month.
Investment Promotion Minister Lakshman Yapa Abeywardena speaking briefly at the signing ceremony also commended the move and pledged to support any interested parties. He also expressed confidence that the memorandum of understanding would help Sri Lanka meet its Foreign Direct Investment (FDI) targets in the coming years.
BOI said BTMU has an important role in supporting the BOI when it holds seminars for Japanese Companies to attract FDI in Sri Lanka. It will also help with setting up one-to-one meetings for BOI with potential companies from the BTMU client base and introduce Japanese investors to prospective projects in Sri Lanka, including business meeting between the two countries. Furthermore, BTMU will provide Japanese companies potential investors with information relating to BTMU's business activities in Sri Lanka.
The agreement will endeavour to promote cooperation between Sri Lankan and Japanese companies through exchanging information and sharing to promote FDI and facilitate investors. They will cooperate mutually for any prospective missions and or seminars.
The BOI will support BTMU and collaborate with the Bank on Seminars for Japanese Companies in relation to FDI opportunities in Sri Lanka.
The BOI also has a role to inform BTMU of prospective projects in Sri Lanka so that the bank can communicate opportunities to Japanese companies. BTMU can also have with State Banks or organisations which are involved in this work area.
Another important role is that BOI will work closely with BTMU to attract industrial investments from Japan to Sri Lanka.