26 October 2024 02:04 am Views - 199
The Colombo Port City Special Economic Zone (SEZ) is rapidly establishing itself as a leading regional business hub in South Asia, offering a modern legal framework and a business-enabling environment designed for investors to thrive.
Positioned as a competitive alternative to established financial centres like Dubai and Singapore, Colombo Port City is attracting international businesses and injecting new energy into Sri Lanka’s economic landscape. Its strategic location and modern ecosystem provide a platform for growth and development, positioning Sri Lanka as a key player in the region.
Traditionally, international and Sri Lankan IT and BPO firms have favoured hubs like Dubai and Singapore, due to their favourable conditions—such as the ability to pay employees in US dollars, tax breaks, political stability and robust economies. Colombo Port City has recognised this and developed a regulatory framework and strategic incentives that mirror these advantages. It now stands as a compelling option for global businesses seeking to expand in South Asia as well as a homegrown solution for Sri Lankan businesses looking to broaden their regional or global footprint.
The recent Colombo Port City banking regulations introduced provide further assurance to investors by safeguarding capital inflows and outflows, ensuring a secure environment for business operations. This environment is designed to channel new foreign direct investments (FDI) into Sri Lanka, directly supporting the local economy and creating new avenues for growth.
Currently, the Colombo Port City Economic Commission (CPCEC) public registry lists 79 Authorised Persons (APs), including both primary and secondary investors. These registered APs include prominent global entities from India, the United Arab Emirates, Singapore, the United Kingdom, Norway and the United States, underscoring the SEZ’s international appeal and its potential to become a regional hub across key service sectors. Additionally, over 100 companies are actively considering operations within the SEZ.
Unlike the other zones in Sri Lanka governed by the Board of Investment (BOI), the Colombo Port City SEZ’s policies are uniquely tailored to link benefits directly to foreign earnings, export services and new business ventures. This ensures that only companies genuinely committed to new investments can access the SEZ’s benefits, rather than simply relocating to exploit tax incentives. The SEZ’s competitive tax incentives and modern regulatory framework are designed to attract high-value FDI, promote innovation and foster sustainable economic growth. By focusing on genuine new investment, Colombo Port City aligns its growth with Sri Lanka’s broader economic goals of driving innovation, entrepreneurship and employment generation.
To maintain this focus on genuine investment, the CPCEC has established clear criteria within the SEZ’s legal framework. Secondary investor criteria must meet one of the following standards: a minimum global revenue of over US $ 50 million, employment of at least 100 people within five years of operation or a start-up valuation of at least US $ 500,000 within five years from the date of receiving an AP licence or alternatively must demonstrate how their business will contribute to Sri Lanka’s economic and social development through innovation, knowledge transfer, research and development or by fostering the creation of an international financial centre within the SEZ.
Investors are required to submit a detailed business plan to qualify for incentives, with annual reviews conducted by the CPCEC to ensure compliance with the set criteria. Should these standards not be met, the CPCEC has the authority to decline a licence or renewals. This structured approach ensures that the development of Colombo Port City remains aligned with Sri Lanka’s broader economic goals, creating a dynamic and thriving business environment.
Colombo Port City presents a significant growth opportunity for both local and international investors seeking to expand their global services. With its emphasis on single window investment facilitation for the ease of doing business, attracting strategic investments and fostering a modern and secure business environment, the SEZ is well-positioned to become South Asia’s premier financial and business hub.