General

Colombo Port City Economic Commission: Ushering in a New Era of Stability, Investor Confidence, and Regulatory Reform

The Colombo Port City Economic Commission (CPCEC) is marking a pivotal new chapter in Sri Lanka’s economic transformation, anchored in regulatory reform, investor confidence, and strengthened stability. Central to this momentum is the gazetting of the new Regulations for Businesses of Strategic Importance (BSI) Gazette No. 2454/62¹ dated 20 September 2025. This replaces the Regulations for Business of Strategic Importance Gazette No. 2343/60 dated 4 August 2023, which expired on 3 August 2025.

This milestone follows the government’s broader reform agenda, including proposed amendments to the Colombo Port City Economic Commission Act No. 11 of 2021 which is to be completed in the near future. These efforts aim to enhance transparency and further solidify the rules-based regulatory regime governing the Colombo Port City Special Economic Zone —Sri Lanka’s largest public-private partnership, with an investment of approximately USD 1.4 billion.

These reforms are aligned with Sri Lanka’s commitments under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) arrangement initiated in March 2023 and detailed in the Letter of Intent issued to the IMF in November 2023³. These commitments include reducing revenue leakages, strengthening anti-corruption safeguards, and rigorously evaluating tax incentives by weighing costs against economic benefits.

In its July 2025 Country Report² the IMF noted that “performance under the program has been generally strong,” while also recognizing that steps are underway to amend the CPCEC Act to introduce transparent, time-bound eligibility criteria aligned with global best practices.

These strategic reforms are designed to overcome historical project challenges that had impacted investor sentiment and development pace. In response, the government has taken decisive action to resolve legacy issues and recalibrate the project in line with international standards. This recalibration—guided by technical insights and recommendations from the IMF—is positioning Colombo Port City as a resilient and competitive hub for global capital and enterprise.

By the end of March 2025, the CPCEC had licensed 83 Authorised Persons, including 24 designated BSIs. These entities employed over 2,900 staff and operated across 45,000 square meters of office space in and around Colombo, with total capital expenditure reaching USD 134 million. By July 2025, the number of licensed APs had grown to approximately 140—including four Primary BSIs—expected to invest USD 1.3 billion to develop 81,000 square meters of land, which will encompass 323,000 square meters of residential, retail, and commercial spaces.

The CPCEC, as the single-window authority overseeing the Colombo Port City, remains resolute in delivering its mandate. Backed by forward-looking government policy and rising international engagement, the CPCEC is poised to transform Colombo Port City into a globally competitive destination for strategic investment, innovation, and high-value enterprise in South Asia.

For further information, or to contact the CPCEC, please visit the CPCEC Website

References

Gazette No. 2454-62 dated 20.09.2025
IMF Report July 2025 – Including the Letter of Intent, Memorandum of Economic and Financial Policies and Technical Memorandum of Understanding.
IMF Report December 2023 - Including the Letter of Intent, Memorandum of Economic and Financial Policies and Technical Memorandum of Understanding.

About: Colombo Port City Economic Commission (CPCEC)

The Colombo Port City Economic Commission is the regulatory authority of the Colombo Port City Special Economic Zone, established under the Colombo Port City Economic Commission Act, No. 11 of 2021. Its mandate is to create a world-class business and living environment, attracting foreign direct investment, fostering innovation, and driving economic growth for Sri Lanka, in a business enabling environment with Single Window Investment Facilitation for the ease of doing business.

About: Colombo Port City

Colombo Port City is a brand-new city development built as an Export of Services Special Economic Zone with an initial investment of USD 1.4bn and an expected USD 15-20bn overall investment when completed. Spanning 269 ha, it is a sea reclamation project next to the existing Colombo Business District (CBD). Colombo Port City once fully developed is estimated to have some 6.3Mn m2 of build-up space and an estimated city population of 273,000.

The Area of Authority (AOA) of Colombo Port City consists of the boundaries set out in Schedule 1 of the Colombo Port City Economic Commission (CPCEC) Act, No. 11 of 2021 Act. From the date of commencement of the CPCEC Act, all land comprising the AOA has been vested in the CPCEC by way of a Land Grant issued by the President of Sri Lanka under the State Lands Ordinance (Chapter 454).