Sri Lanka: Guidance on tax exemptions and incentives for businesses of strategic importance in Colombo Port City
Regulation No. 01 of 2025 is effective September 30, 2025, for a period of five years.
The Ministry of Finance, Planning, and Economic Development on September 20, 2025, published Regulation No. 01 of 2025 providing guidance on the granting of tax exemptions and incentives to businesses of strategic importance (BSI) in Colombo Port City (via gazette notification No. 2454/62) effective on the date of publication.
The guidance is effective for a period of five years and replaces the earlier Regulation No. 02 of 2023 which was effective for the prior two years.
Regulation No. 01 of 2025 broadens the investment opportunities to a wider investor category and broader market, and introduces a comprehensive, structured, time-bound framework for identifying and incentivizing primary and secondary BSI operating within the Colombo Port City authority area. It offers distinct tax and regulatory exemptions, including:
- Corporate income tax holidays ranging from eight to 15 years for primary BSI
- Concessionary tax rate of 7.5% for four years for secondary BSI
- Exemptions from key enactments such as the Customs Ordinance, Ports and Airports Development Levy, and Foreign Exchange Act, among others
Read a September 2025 report prepared by the KPMG member firm in Sri Lanka