Volkswagen assembly plant to get 8 year tax holiday for USD26.5mn investment

Aug 14, 2015 (LBO) – Sri Lanka’s Board of Investment said the Volkswagen assembly plant, which initially plans to make cars for the local market, will get an eight year tax holiday for an investment of 26.5 million US dollars.

The agreement between BOI and sole agent of Volkswagen agent of the Island Senok Automobile was signed on Thursday.

The facility will be located in a 30 acre land, Kuliyapitiya, in the North Central Province, and will be completed within a period of two years.

“This will send a message to other investors to open up factories in Sri Lanka,” BOI chairman Upul Jayasuriya said.

He said from the total investment a value 21.5 million US dollars would be foreign direct investment and the balance five million dollars would be from borrowed capital.

The plant will assemble diesel powered passenger cars, sport utility vehicles (SUVs), multi utility vehicles (MUVs) and commercial vehicles.

The company said, initially these vehicles would be marketed locally for a period of three years and thereafter the vehicles will be exported to overseas markets.

The company plans to employ about 200 people initially to produce 500 vehicles annually.

“We are planning to train at least 2,000 people though this and these people would be able to travel outside the country and work,” Noel Selvanayagam, president of Senok Automobile said.