Unlocking Business Opportunities: The Port City Colombo Incentives Program

Unlocking Business Opportunities: The Port City Colombo Incentives Program

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.

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 for these benefits, businesses must obtain a designation as either Primary or Secondary Businesses of Strategic Importance within two years from the publication of these regulations in the Gazette, dated 4th August 2023. The application process is available on the Colombo Port City Economic Commission’s website (www.portcitycolombo.gov.lk). 

Primary Business of Strategic Importance

To be recognized as a Primary Business of Strategic Importance, an authorized person must meet one of two criteria:

  1. USD 100 Million Investment: Invest a minimum of USD 100 million per plot of land or a pro-rated investment in a subdivided plot of land, in compliance with the Colombo Port City (Development Control) regulations within the Colombo Port City.
  1. Marina or Social Infrastructure Investment: Invest a minimum of USD 25 million in plots of land designated for the Marina or Social infrastructure.

Primary Businesses of Strategic Importance are entitled to many incentives. However, they must make a choice between the exemptions under item (a) or (b) and cannot change their selection once made. Primary Businesses of Strategic Importance are showered with an impressive package of incentives, including:

a)

  1. Exemptions under Specific Enactments: Businesses will enjoy exemptions or incentives under specific enactments listed in Schedule II of the Colombo Port City Economic Commission Act, No. 11 of 2021. These exemptions extend for 25 years from the date of the Cabinet of Ministers’ approval for the business’s designation as a Business of Strategic Importance. The following Acts and Ordinances that will be exempted are:
  • The Inland Revenue Act, No. 24 of 2017
  • The Value Added Tax Act, No. 14 of 2002
  • The Finance Act, No. 11 of 2002
  • The Finance Act, No. 5 of 2005
  • The Excise (Special Provisions) Act, No. 13 of 1989
  • The Customs Ordinance (Chapter 235)
  • The Ports and Airports Development Levy Act, No. 18 of 2011
  • The Sri Lanka Export Development Act, No. 40 of 1979
  • The Betting and Gaming Levy Act, No. 40 of 1988
  • Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971
  • The Entertainment Tax Ordinance (Chapter 267)
  • The Foreign Exchange Act, No. 12 of 2017
  • Casino Business (Regulation) Act, No. 17 of 2010
  1. Corporate Tax Incentive: Primary Businesses of Strategic Importance will receive an incentive of 50% of the prevailing corporate tax rate for an additional 10 years following the initial 25-year exemption period.

OR

b)

  1. Exemptions under Specific Enactments: Businesses will enjoy exemptions or incentives under specific enactments listed in Schedule II of the Colombo Port City Economic Commission Act, No. 11 of 2021 (excluding the Inland Revenue Act, No. 24 of 2017). These exemptions also last for 25 years from the date of the Cabinet of Ministers’ approval for the business’s designation as a Business of Strategic Importance. The following Acts and Ordinances that will be exempted are:
  • The Value Added Tax Act, No. 14 of 2002
  • The Finance Act, No. 11 of 2002
  • The Finance Act, No. 5 of 2005
  • The Excise (Special Provisions) Act, No. 13 of 1989
  • The Customs Ordinance (Chapter 235)
  • The Ports and Airports Development Levy Act, No. 18 of 2011
  • The Sri Lanka Export Development Act, No. 40 of 1979
  • The Betting and Gaming Levy Act, No. 40 of 1988
  • Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971
  • The Entertainment Tax Ordinance (Chapter 267)
  • The Foreign Exchange Act, No. 12 of 2017
  • Casino Business (Regulation) Act, No. 17 of 2010
  1. Capital Allowance: Primary Businesses of Strategic Importance can enjoy an enhanced capital allowance of 300% for depreciable assets (excluding intangible assets) used within the Colombo Port City. They also have the flexibility to carry forward unrelieved losses for up to 40 years from the date of the Cabinet of Ministers’ approval for the business’s designation as a Business of Strategic Importance. This allowance should be calculated following the guidelines in the fourth schedule of the Inland Revenue Act, No. 24 of 2017.

The Colombo Port City Incentives Program is a gateway to unparalleled business growth and prosperity. Whether you’re a corporate giant or an innovative entrepreneur, the Colombo Port City is ready to welcome you with open arms and many enticing incentives. The future of your business initiatives is bright in this vibrant, evolving hub of commerce. Don’t miss the chance to explore the infinite possibilities that the Colombo Port City has to offer. It’s time to embark on this exciting journey towards business success. 

The post Unlocking Business Opportunities: The Port City Colombo Incentives Program appeared first on LankaPropertyWeb.com News & Blog.

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