Foreign Currency Accounts for Sri Lankan Overseas Service Providers and Their Employees

07th May 2010, www.cbsl.gov.lk

Sri Lankan companies providing a range of international services and their employees earning foreign exchange are now allowed to open foreign currency accounts at commercial banks, informs a Press Release issued by the Exchange Control Department of the Central Bank of Sri Lanka.

Foreign Currency Accounts for International Services Providers and their Employees
It has been decided to grant permission for international services providers and their employees to open and maintain foreign currency accounts in Licensed commercial banks in Sri Lanka with effect from 07th May 2010.

Any resident company or partnership registered in Sri Lanka or any individual resident in Sri Lanka who are providing the following categories of international services and their employees are eligible to open and maintain these foreign currency accounts:

• Accounting, book keeping or auditing;
• Tax advisory services;
• Services of a draftsman;
• Engineering services;
• Software development, data processing, data base development or system designing;
• Advertising outside Sri Lanka;
• Research work and report writing;
• Photography;
• Publishing outside Sri Lanka;
• Beauty culture, hairdressing or modeling outside Sri Lanka;
• Services of a sports person or an artist;
• Services of a valuer or auctioneer;
• Services of a plumber, mason or carpenter;
• Quantity surveying;
• Health care services;
• Management of any agricultural property situated outside Sri Lanka;
• Services rendered by any individual as a member of an organized profession with a recognized standard of ability enforced before such person entering to it and recognized standard of conduct enforced while practicing in it.

These accounts may be opened in the form of current, savings or term deposits and credits to the accounts are confined to proceeds on international services received from abroad through banking channels, employment income paid out of foreign currency received by an employer and interest accruing on the funds held in the account. Employers can make the payments in foreign currency in the form of bank transfers to their employees who are directly involved in the projects carried out by the employer by debiting the said account. Further, debits to these accounts can also be made to make payments in foreign currency outside Sri Lanka on account of permitted transactions for residents in Sri Lanka. Any other withdrawals from these accounts should be in Sri Lanka rupees.

These new measures will allow international services providers and their employees to avail themselves with income tax exemptions granted by the Inland Revenue (Amendment) Act No. 19 of 2009.

Related Info:
Sri Lanka Relaxes Exchange Controls from March 11 in the First Phase of Foreign Exchange Liberalization Plan