Exchange control proposals of the budget

zenobia · 1 Exchange control proposals of the budget Fri Nov 09, 2012 1:57 pm

zenobia

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Dear all,
can someone explain the exchange control regulation changes proposed in the budget and their implicatons,
thank you in advance

sriranga · 2 FOREIGN EXCHANGE MANAGEMENT Fri Nov 09, 2012 3:01 pm

sriranga

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Foreign borrowings without Exchange Control Department approval
* Allow corporate entities to borrow up to USD 10mn per annum over next 03 years

* Allow licensed commercial banks to borrow up to USD 50mn per annum for 03 years

* Positive: companies and banks will be able to obtain low cost borrowings

Permit those engaged in supply of goods and services to tourism and foreign businesses to transact in foreign currency
* Accept foreign currency provided such earnings are deposited in the banking system
within 07 workings days

* Permit all residents to maintain foreign exchanges earner’s accounts to deposit foreign exchange earnings from services provided to non-residents

Raise prescribed limit for exemption from tax and exchange controls to LKR 300mn, to bring new business life to those who lost title documents and other assets during the conflict, particularly those who live abroad

Permit transfer of foreign savings to investments in instruments up to USD 5mn to be done without the approval from Exchange Control Department and a three year tax holiday for such investment

The time period required to be absent from the country to become a non-resident is reduce from 365 days to 183 days
Source: LSL Budget Hihglights