Sri Lanka as a Premier Offshore Destination
Sri Lanka has emerged as a popular offshore destination due to its strategic location, affordable labour, and highly skilled workforce. The country’s labour force is well-educated, proficient in English, and focused on technical skills. Companies outsourcing to Sri Lanka can save significantly on labour costs, which are much lower than in wealthier nations. Geographically, Sri Lanka is ideally positioned, offering quick access to key markets in Europe, the Middle East, and Asia.
Advantages of Offshoring to Sri Lanka
Cost-effectiveness
Outsourcing to Sri Lanka offers substantial cost savings:
- Reduced Compensation Costs
- Salaries in Sri Lanka are lower than in affluent nations like the US, despite a competent labour force.
- Living expenses in Sri Lanka are significantly lower than in the US, Canada, Australia, and most European countries.
- Infrastructure Costs
- Sri Lanka offers cheaper infrastructure and telecommunications costs than developed nations and other top outsourcing destinations.
- The country has a competitive, multi-provider telecom industry with standard call rates significantly lower than in developed nations. Calls to Europe, the US, and India typically cost only a few pennies per minute.
- Office space costs in Sri Lanka are much lower than in other popular outsourcing locations like the Philippines and Malaysia. Many BPO companies have offices in prime locations, such as the World Trade Centre in Colombo, due to the low rental costs.
Tax and Regulatory Costs
- The income tax rate in Sri Lanka is 24%, compared to an average global rate of 29% and higher rates in developed countries (e.g., 57% in Finland).
- The Sri Lankan government is working to reduce corporate income tax and value-added tax rates, eliminate small taxes and levies, and simplify the tax code.
Highly Educated Workforce
- Sri Lanka offers free secondary education and has a 92% literacy rate, higher than the global average of 86%.
- The country has 23 universities and numerous degree-granting private higher education institutions, with approximately 100,000 graduates each year. Most graduates enter professional sectors like computer science, law, medicine, architecture, engineering, and finance.
- English is the primary language in Sri Lanka’s business community, but there are also workers proficient in Japanese, Chinese, Korean, German, Italian, Spanish, and French.
Favourable Business Environment
- Data Safety
- Sri Lanka has some of the strictest intellectual property (IP) protection laws in the region. National offices for intellectual property rights address policy matters, enforcement, and public awareness.
- Robust ICT Infrastructure
- Sri Lanka’s telecommunications infrastructure is comparable to other leading countries in the region. It was the first nation in South Asia to successfully test a stand-alone 5G network.
Sri Lanka excels in legal, HR services, customer management, insurance, banking, telecommunications, and data analytics services, in addition to finance and accounting. The country possesses all the necessary elements to become a top outsourcing destination, including its highly educated populace, excellent business environment, and affordable outsourcing services. However, you should also be prepared for any obstacles you might encounter, such as issues with infrastructure. This post’s contents can assist you in navigating these challenges.