Legal Market Overview
2020 has been a very hard year for businesses all over the world due to the Covid-19 pandemic. Sri Lanka is no exception to this and some say that the economy took a battering in 2019/2020.
However, in August 2020 Sri Lanka held its parliamentary elections which had to be postponed due to the virus. One party now has a significant majority of the seats in Parliament. It is anticipated that there will be more political stability in the country as a result. Some view this government as being more pro-business and a safe pair of hands. It is hoped that this will now provide a much-needed platform for more solid economic development and further inward investment over the coming years.
Notwithstanding these positive predictions, the economy is not thriving currently. To kick start the economy the tax framework was restructured by the country’s Executive allows for many tax exemptions and concessions to non-resident investors. As a special measure, too, due to Covid-19 the Executive decided to suspend all restrictions on foreign currency inflows into Sri Lanka for a period of time.
Tourism has been badly affected by the pandemic which was a significant source of income for Sri Lanka but some predict there will be some growth in the agricultural sector. Sri Lanka is also known for its wealth of precious gems and tea. Some local companies are, however, thriving during the pandemic. The law firms that have a diverse client base of local and international clients continue to enjoy a steady workflow but there is increased competition for the work among these firms.
Several domestic firms have strong working relationships with major international law firms. There are some full-service law firms such as Nithya Partners, Julius & Creasy and D. L. & F. De Saram which cover the full array of legal issues. For IP matters LegalBase and Sudath Perera Associates dominate. Other key firms in the market are John Wilson Partners, F. J. & G. De Saram and Neelakandan & Neelakandan (formerly Murugesu & Neelakandan). Tiruchelvam Associates is another important local firm.
Despite the challenges the country has faced through terrorism and the downturn in the economy, it is hoped that the recent government initiatives to create more investor-friendly portfolios in Sri Lanka and the prospect of more infrastructure investment in the country, will help the country to weather the growing economic storm.