Investing in
Port City Colombo

Yes. Foreign nationals and non-resident investors are generally permitted to acquire condominium parcels within Port City Colombo. Transactions are typically denominated in a designated foreign currency. The Land (Restrictions on Alienation) Act 2014 and its interaction with Port City regulations should be reviewed with legal counsel before any acquisition.

Yes. Both resident and non-resident persons, including companies, partnerships, and foundations incorporated under Sri Lankan or foreign law, may obtain a licence to operate within Port City Colombo with 100% foreign ownership.

A business identified as a Business of Strategic Importance may be granted exemptions, in full or in part, from any of the thirteen enactments in Schedule II to the Act — among them the Inland Revenue Act, the Value Added Tax Act, the Customs Ordinance and the Ports and Airports Development Levy Act. The forty-year ceiling that section 52(7) formerly imposed was repealed by the Amendment Act No. 1 of 2026; the period of validity is now as prescribed, and the Ministry of Finance may review the exemptions every five years. Employment income is a separate question: section 35, as replaced in 2026, limits the income tax exemption to employees of a person licensed before that section commenced, and then for three years only.

The Colombo Port City Economic Commission Act provides for an International Commercial Dispute Resolution Centre (ICDRC) within Port City. Disputes between the Commission and authorised persons or residents are resolved through arbitration, consistent with international commercial practice.

The Commission is the single window through which visa, entry permit and work permit applications are made, and it may recommend priority treatment where it considers an application acceptable in the national interest — section 33. The Act itself confers no visa or residency entitlement and fixes no period: it states twice that the decision of the Controller of Immigration and Emigration is final — sections 33(3) and 34. Multi-year terms published by the Commission are administrative rather than statutory, and should be confirmed as current before they are relied on.

Port City Colombo recognises 16 designated foreign currencies for transactions. All proposed investment values must be denominated in a designated foreign currency, not Sri Lankan Rupees. Funding must be raised outside Sri Lanka.

The CPCEC is the sole regulatory and facilitation authority for all economic activity within Port City Colombo, established under Act No. 11 of 2021. It functions as a Single Window Investment Facilitator, handling all licences, registrations, work permits, visa facilitation, and approvals.

AW Chambers advises individual investors, developers, and corporate clients on all aspects of Port City matters, including business structuring, CPCEC licensing, property acquisition, due diligence, transactional drafting, and ongoing regulatory compliance.

Three principal mechanisms operate together. (i) The Investor Protection Clause in the Colombo Port City Economic Commission Act No. 11 of 2021 provides that any registration, licence, authorisation, permit or approval granted by the CPCEC may not be terminated, altered or withheld in a manner detrimental to the investor's interest. (ii) The Economic Equilibrium Clause is incorporated in project agreements: where an Authorised Person (AP) incurs an increase in operating expenses by reason of a change in legal requirements, the CPCEC may adjust the applicable exemptions and incentives to absorb that increase. (iii) Disputes within the Area of Authority are resolved through the International Commercial Dispute Resolution Centre (ICDRC), affording investors an internationally recognised arbitration forum.

Yes. Escrow accounts may be opened with any bank operating in Sri Lanka. The specific terms, permitted uses and operational restrictions are set by the chosen bank in accordance with applicable Sri Lankan banking regulation, and should be confirmed directly with that institution at the time of opening.

Yes. Building maintenance and strata management in Colombo are governed principally by the Apartment Ownership Law No. 11 of 1973 (as amended) and the Common Amenities Board Law / Condominium Management Authority Law, which together regulate condominium ownership, common property and management corporations.

Individuals, companies, partnerships, and foundations formed under Sri Lankan or foreign law may invest in and operate within Port City Colombo. Proposed investment values must be denominated in one of the designated foreign currencies and funded from outside Sri Lanka.

A business obtains a licence from the Colombo Port City Economic Commission (CPCEC), which acts as a single-window facilitator for incorporation, registration, work permits, and approvals. Both resident and non-resident persons may hold 100% ownership of a licensed Port City entity. AW Chambers advises on the structure, the licence application, and ongoing compliance.

No. Port City Colombo was formally recognised as part of Colombo 01 in May 2021. Title is clear and unencumbered: there are no caveats, injunctions or other encumbrances registered against the land.

Marketable land parcels are transferred to developers on a 99-year leasehold basis. End users (purchasers of residential product such as apartments and villas) typically acquire on a freehold basis (subject to the Land (Restrictions on Alienation) Act and CPCEC requirements).

No. Registered APs are not required to occupy office space within Port City Colombo. Until commercial premises within the Area of Authority are ready for occupation, APs may operate from designated locations outside the Area.

Port City Colombo is positioned strategically in the heart of South Asia, on the East to West Indian Ocean trade corridor, and combines a competitive package of fiscal incentives (including BSI tax exemptions and customs relief) with non-fiscal advantages (single-window facilitation, 100% foreign ownership, free capital and profit repatriation, and a dedicated international arbitration forum).

Port City Colombo is designated as a multi-service Special Economic Zone. Any lawful business directed primarily at servicing clients overseas may be conducted within the Area of Authority. Services may also be procured from the local market, but the provision of services into the local Sri Lankan market requires the prior approval and direction of the CPCEC. Manufacturing operations are not permitted.

No. BSI status is not the subject of a separate application. Within the online AP application, specifically the business plan section, applicants indicate that they seek BSI designation and identify the qualifying criteria they satisfy. The BSI vetting process runs concurrently with the AP review.

The Commission has published an incentive framework distinguishing Primary and Secondary Businesses of Strategic Importance, with packages reported at up to 23 years for the former and a concessionary 7.5% corporate income tax rate for the latter. Those figures are administrative and prescribed, not fixed by the Act: since the Amendment Act No. 1 of 2026 the period of validity is as prescribed under section 52(7), tax-related exemptions are subject to technical analysis by the Ministry of Finance under section 52(3A), and the exemptions may be reviewed every five years. The terms applicable to any particular business are those specified in the Gazette Order made under section 53(3) and embodied in its agreement with the Commission.

A BSI is a business identified by the CPCEC as qualifying for exemptions or incentives within Port City Colombo. Only Authorised Persons may hold BSI status. BSIs are intended to advance social, economic and developmental objectives, and fall into two categories: Primary BSIs (land development investments) and Secondary BSIs (business set-up and operating investments).

An AP licence may be cancelled where the AP: (i) fails to commence business at Port City Colombo within six months of licence issuance; (ii) ceases to conduct business in the permitted place(s) or area(s), or no longer has a legal personality under applicable law; (iii) furnishes false, misleading or inaccurate information or documents to the CPCEC; or (iv) breaches the terms and conditions of the licence as issued by the CPCEC.

An AP that does not renew its licence ceases to be an AP and may no longer engage in business within Port City Colombo. The CPCEC may not, however, formally cancel the licence until three months have passed from publication of the notice of expiry.

The AP must submit a written application for renewal to the CPCEC at least thirty days prior to the expiry of its existing licence.

Following registration, the CPCEC issues a certified copy of the licence, certificate of registration and authorisation, or such other form of approval as is appropriate to the AP's licensed activity.

AP applications are reviewed by the CPCEC at the end of each month. Applicants are contacted following that review, and the CPCEC Public Register is updated accordingly.

The Colombo Port City Economic Commission (CPCEC) grants AP status, acting in its capacity as the Single Window Investment Facilitator for Port City Colombo.

Applicants are typically required to submit: a Certificate of Incorporation; certified copies of the biodata page of the relevant passport(s); a document appointing the authorised signatory; a credible and viable business plan; and such further supporting documents as the CPCEC may request.

Not necessarily. Foreign entities not currently operating in Sri Lanka may register as a foreign business and then apply for AP status. Alternatively, an existing foreign entity may incorporate a new Sri Lankan entity with the Registrar of Companies, register that entity as an Offshore Business Unit, and then apply for AP status.

Registration is made through the CPCEC's online application portal, which guides the applicant through the AP (and, where applicable, BSI) application.

No. There is no prescribed minimum investment for AP status. Any entity that meets the qualifying criteria is eligible for both AP status and, where applicable, BSI designation.

An investor may qualify by either: (i) incorporating a company in Sri Lanka with the Registrar of Companies and obtaining offshore status under the Colombo Port City Economic Commission Act No. 11 of 2021; or (ii) registering an overseas-incorporated company as an offshore company under the same Act. In either case, the CPCEC will issue the AP licence on satisfaction of the applicable requirements.

An Authorised Person is an individual or entity that has been formally designated by the CPCEC and granted the right to carry on specified international business activities within the Colombo Port City Special Economic Zone.

An authorised person deals in designated foreign currency, pays its employees in it, and may repatriate capital and profits; there is no restriction on foreign ownership or on the employment of foreign nationals; the Termination of Employment of Workmen Act is among the enactments in Schedule II from which exemption may be granted; the Commission acts as Single Window Investment Facilitator for licences, registrations and permits; and disputes go to the International Commercial Dispute Resolution Centre, with the courts directed by section 63 to hear Port City civil and commercial matters expeditiously on a day-to-day basis. Two commonly cited advantages need qualifying after the Amendment Act No. 1 of 2026: the income tax exemption on employment income is now confined by section 35 to employees of a person licensed before that section commenced, and for three years only; and visa terms are administrative, the Act reserving the final decision to the Controller of Immigration and Emigration.