The Colombo Port City in Sri Lanka is creating a stir in the world of business and investment. With the recent approval of an innovative incentive program by the Sri Lankan Parliament, this aspiring development project is set to attract businesses of all sizes and sectors. Are you an investor looking for a strategic opportunity? If so, Colombo Port City should be at the top of your list. This blog breaks down the key points of the incentive program, helping readers understand the benefits and opportunities it offers.
A New Era for Investors
Just when you thought Sri Lanka couldn’t be more captivating for investors, the Colombo Port City introduces an exciting new chapter. The “Colombo Port City (Guidelines on the Grant of Exemptions or Incentives to Businesses of Strategic Importance) Regulations, No. 2 of 2023,” marks a crucial moment in the economic landscape of this bustling commercial capital city.
This incentive program introduces new opportunities for leasing and developing land within the Colombo Port City, designed for businesses of strategic importance.
To be eligible, businesses must obtain a designation as either Primary or Secondary Businesses of Strategic Importance within two years from the publication of the Gazette (4th August 2023).
Applications can be made via the Colombo Port City Economic Commission website.
What Qualifies a Primary Business of Strategic Importance?
To receive recognition as a Primary Business of Strategic Importance, an entity must meet one of the following investment thresholds:
| Criteria | Minimum Investment |
|---|---|
| USD 100 Million per plot | For land development according to CPC development regulations |
| USD 25 Million | If investing in Marina or Social Infrastructure zones |
Businesses granted this status can access significant tax exemptions and long-duration incentives, categorized into two optional schemes (a) or (b) — the choice is permanent once made.
Incentive Package (Option A)
Includes Inland Revenue Act
Businesses choosing Option A receive exemptions under the following enactments for 25 years from Cabinet approval:
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Inland Revenue Act, No. 24 of 2017
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Value Added Tax Act, No. 14 of 2002
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Finance Act, No. 11 of 2002
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Finance Act, No. 5 of 2005
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Excise (Special Provisions) Act, No. 13 of 1989
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Customs Ordinance (Chapter 235)
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Ports & Airports Development Levy Act, No. 18 of 2011
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Sri Lanka Export Development Act, No. 40 of 1979
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Betting and Gaming Levy Act, No. 40 of 1988
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Termination of Employment of Workmen Act, No. 45 of 1971
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Entertainment Tax Ordinance (Chapter 267)
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Foreign Exchange Act, No. 12 of 2017
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Casino Business Regulation Act, No. 17 of 2010
PLUS
50% Corporate Tax incentive for an additional 10 years after the 25-year exemption period ends.
Incentive Package (Option B)
Excludes Inland Revenue Act
This option also grants 25-year exemptions under the same enactments except the Inland Revenue Act:
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Value Added Tax Act, No. 14 of 2002
-
Finance Act, No. 11 of 2002
-
Finance Act, No. 5 of 2005
-
Excise (Special Provisions) Act, No. 13 of 1989
-
Customs Ordinance (Chapter 235)
-
Ports & Airports Development Levy Act, No. 18 of 2011
-
Sri Lanka Export Development Act, No. 40 of 1979
-
Betting and Gaming Levy Act, No. 40 of 1988
-
Termination of Employment of Workmen Act, No. 45 of 1971
-
Entertainment Tax Ordinance (Chapter 267)
-
Foreign Exchange Act, No. 12 of 2017
-
Casino Business Regulation Act, No. 17 of 2010
PLUS a powerful long-term benefit:
Capital Allowances
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300% allowance for depreciable assets used in Port City
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Losses can be carried forward up to 40 years
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In line with Inland Revenue Act Schedule 4 guidelines
Why This Matters for Investors
The Colombo Port City Incentives Program is a gateway to unparalleled business growth and prosperity. Whether you’re a global enterprise or an emerging venture, Port City is poised to become the region’s most competitive commercial hub.
With long-term tax reliefs, leasing benefits, investor protection, and strategic development territory – the opportunity is now.
Final Takeaway
If you’re looking to establish, expand or relocate a business in Asia — Colombo Port City deserves your attention.
The incentives are bold.
The development is modern.
And the future of Sri Lanka’s commercial landscape is being written today.
