Port City Colombo

Geography

Port City Colombo is located in the metropolis of Colombo, Sri Lanka, which is positioned within South Asian trade routes. The master-planned city is to be constructed between the southern edge of the new Colombo South Port and the Fort Lighthouse. The total area of sea to be reclaimed is 269 ha.

Special Economic Zone

The Port City Colombo Special Economic Zone (SEZ), governed by the Colombo Port City Economic Commission (CPCEC), was established under the Colombo Port City Economic Commission Act, No. 11 of 2021 to promote international investment and business services. The SEZ initially offered generous fiscal and regulatory incentives—including tax holidays of up to 25 to 40 years for “Businesses of Strategic Importance (BSIs)”, unrestricted foreign-exchange transactions in sixteen designated currencies, 100 percent foreign ownership and profit repatriation, and preferential five- to ten-year residence visas for foreign professionals and their dependents.{{cite web |title=Why Invest in Port City Colombo |url=https://www.portcitycolombo.lk/investor-relations/why-invest-in-port-city-colombo/

Under the IMF-supported Extended Fund Facility (EFF) program agreed between 2023 and 2025, Sri Lanka committed to revising these concessions to ensure transparency and fiscal discipline. The government subsequently suspended new tax-holiday approvals under the Port City Act and the Strategic Development Projects (SDP) Act until new, rules-based criteria were enacted.{{cite news |title=Sri Lanka halts Port City, SDP tax breaks, laws to be changed in IMF benchmark |url=https://economynext.com/sri-lanka-halts-port-city-sdp-tax-breaks-laws-to-be-changed-in-imf-benchmark-228557/

In September 2025, Regulation No. 01 of 2025 introduced a new incentive framework for BSIs, reducing tax-holiday durations and setting clearer qualifying thresholds. According to KPMG Sri Lanka, new primary BSIs now qualify for corporate-income-tax holidays of 8 to 15 years, while secondary BSIs receive a concessionary 7.5 percent rate for four years.{{cite web |title=Guidance on Tax Exemptions and Incentives for Businesses of Strategic Importance in Colombo Port City |url=https://kpmg.com/us/en/taxnewsflash/news/2025/09/sri-lanka-guidance-tax-exemptions-and-incentives-colombo-port-city.html

Despite the fiscal tightening, the SEZ continues to promote investment in service-oriented sectors including information technology and IT-enabled services (IT/ITeS), financial services, logistics and maritime operations, professional services, corporate headquarters operations, tourism, and sustainable urban development.{{cite web |title=Overview of the Colombo Port City Economic Commission Act 2021 |url=https://www.varners.law/view-insight/overview-of-the-colombo-port-city-economic-commission-act-2021

Feature Developments

• Future developments at Port City Colombo focus on creating a favourable environment for business, investment, and lifestyle. Confirmed and promoted projects include:{{cite web |title=Port City Colombo – Master Plan |url=https://www.portcitycolombo.lk/about-port-city-colombo/master-plan/

• Colombo International Financial Centre (CIFC) — a flagship mixed-use complex within the SEZ; the Government granted wide-ranging tax exemptions to the CIFC mixed-development project.{{cite news |last=Kirinde |first=Chandani |title=Govt. unveils tax breaks for Colombo International Financial Centre |url=https://www.ft.lk/Front-Page/Govt-unveils-tax-breaks-for-Colombo-International-Financial-Centre/44-703848

• Luxury yacht marina — construction has commenced; trade and regional media report a 2027 completion target and marina amenities.{{cite web |title=Colombo City Marina in Sri Lanka due for completion in 2027 |url=https://www.superyachttimes.com/yacht-news/colombo-city-marina-in-sri-lanka

• International school — British independent-school operators have shown interest; the project has advanced through government approvals alongside higher-education plans.{{cite news |title=British independent schools show interest in setting up int’l school at Port City |url=https://www.dailymirror.lk/business-news/British-independent-schools-show-interest-in-setting-up-intl-school-at-Port-City/273-252941

• International university — Cabinet approved leases for a private university within PCC; related higher-education developments have been reported by business media.{{cite news |title=Sri Lanka Port City land for $100mn Asiri hospital, Gateway campuses |url=https://economynext.com/sri-lanka-port-city-land-for-100mn-asiri-hospital-gateway-campuses-176651/

• Convention centre — the Government announced a large exhibition and convention centre for PCC as a grant project from China, with local media noting scale comparable to major national venues.{{cite news |title=Sri Lanka Port City to get big convention centre from China: President |url=https://economynext.com/sri-lanka-port-city-to-get-big-convention-centre-from-china-president-200416/

• International hospital — Cabinet approved the lease for a major private hospital at PCC, led by Asiri/Softlogic group interests.{{cite news |title=Sri Lanka Port City land for $100mn Asiri hospital, Gateway campuses |url=https://economynext.com/sri-lanka-port-city-land-for-100mn-asiri-hospital-gateway-campuses-176651/

• Luxury villas — authorities granted strategic/BOI-style incentives to a residential project including two towers and five luxury villas within PCC.{{cite news |title=Four Colombo Port City projects over US$ 1bn granted strategic status |url=https://www.dailymirror.lk/business-news/Four-Colombo-Port-City-projects-over-US-1bn-granted-strategic-status/273-314677

• Marina hotel — business media report dedicated hotel and marina developments on PCC plots held by Marina Hotel Holdings Ltd.{{cite news |title=BIL in SL marina and hotel developments |url=https://www.sundaytimes.lk/241229/business-times/bil-in-sl-marina-and-hotel-developments-581789.html

• Downtown duty-free facility — Sri Lanka opened its first urban downtown duty-free mall at PCC in September 2024; travel-retail media and local news covered operator roll-outs (e.g., One World Duty Free, China Duty Free Group, Flemingo).{{cite news |title=Sri Lanka unveils 'The Mall' at Port City Colombo |url=https://www.dailymirror.lk/business-news/Sri-Lanka-unveils-The-Mall-at-Port-City-Colombo/273-291238

Background

The Port City was claimed to be a concept of former President Mahinda Rajapaksa, who was apparently inspired while inspecting the landfill being constructed for the Colombo South port. The modern Port City Colombo was based on a concept proposal submitted by China Harbour Engineering Company

The construction was set to begin in March 2011, but the project was put on hold due to several circumstances. In mid-2012, the Sri Lankan Ports Authority (SLPA) announced that the construction of the then Port City Colombo project would commence on 17 September 2014. The budget was estimated to be $1.4 billion.

The reclamation was to be carried out by China Harbor Engineering Corporation, who has been engaged by the investor.

Construction of the Port City Colombo project was launched on 17 September 2014 by former Sri Lankan President Mahinda Rajapaksa and General Secretary of the Chinese Communist Party Xi Jinping.

The Port City Colombo was suspended after the end of the Rajapaksa government in 2015 due to alleged claims related to the sovereignty of Sri Lanka and adverse environmental impacts.

The Port City Colombo is governed by an independent authority and will not be subject to the Colombo Municipal Council. A special legal framework would enable it to operate on a subset of commercial law, in terms of contracts and commercial transactions with its own Special Colombo Financial Court serving as the court of first instance and provision of appeal to the Supreme Court of Sri Lanka. It would have its own international commercial dispute resolution center for arbitration proceedings.

Land reclamation

Port City Colombo consists of around 269 hectares of reclaimed land where all land titles are vested with the Government of Sri Lanka.

At a question and answer section in July 2018, the Prime Minister stated that the land reclamation would be finished within one year and that construction should begin by next year, and that the government seeking assistance in establishing the legal construct for the administrative area. This was successfully completed in January 2019 according to the Ministry of Megapolis and Western Development.

The project was around three months ahead of its targeted completion as of January 2019.

Basic infrastructure

China Daily reported in April 2019 that the hydro structural construction would be complete by the middle of 2019, with the construction of municipal facilities being completed by July 2020.

The Road Development Authority had sent approval for the new road network and piling work had begun for the nine bridged by January 2019.

Investments

By December 2020, Sri Lankan conglomerate LOLC Holdings leased out five land parcels amounting to $200 million and signed an agreement with China Harbour Engineering for a mixed development project, with the investment value totaling $1 billion. The project includes residential, commercial and retail assets set to break ground in mid-2021. This is the first major investment in Port City Colombo.

FinTech hub

Fintech Association of Sri Lanka (FASL) has launched an initiative to draft a report titled, Enhancing Colombo International Financial City (Port City Colombo) as a Leading Fintech Hub in South Asia to submit to the President of Sri Lanka; the initiative is being assisted by a number of fintech experts globally and Professor Douglas Arner, Kerry Holdings Professor in Law at the University of Hong Kong (HKU) as the chief consultant.

Sustainability

Before land was reclaimed for the development of Port City Colombo, Environmental Impact Assessments (EIAs) were conducted to ensure that the construction of the Special Economic Zone followed sustainable practices.{{cite web |title=Supplementary Environmental Impact Assessment (SEIA) Report: Proposed Colombo Port City Development Project |url=https://www.slideshare.net/slideshow/final-seia-report-english-opened-for-public-comments-new/56152695

The layout and development of the city’s infrastructure are designed to support sustainability, and the Port City Colombo Master Plan includes several green spaces across the site.{{cite web |title=Port City Colombo Master Plan |url=https://www.srilankabusiness.com/pdfs/announcements/2023/external/port-city/port-city-colombo-master-plan.pdf

Port City Colombo follows eco-friendly infrastructure development practices by adopting sustainable design principles, renewable energy, and energy-efficient building standards.{{cite web |title=Sustainability at the Core |url=https://www.portcitycolombo.lk/sustainability/

Reception

• In October 2025, Port City Colombo was named the "Best Knowledge Zone – Asia Pacific Region" and received a "Highly Commended" citation for Sustainable Zones in the Global Free Zones of the Year 2025 rankings by fDi Intelligence (Financial Times, UK).

• In October 2025, Port City Colombo received the "Visionary Award for Next-Generation Financial Hub Development" at the Asian Digital Finance Forum & Awards 2025, held as part of the Asia International Digital Economy & AI in Finance Summit at Port City Colombo.

Gallery

File:DJI 0153 1-HDR Edit.jpg|Port City Colombo File:航拍图 (2).jpg|Port City Colombo File:Progress Update of Port City Colombo.jpg|Coral Reef at Port City Colombo File:DJI 0123-HDR-Edit.jpg|Port City Colombo - Marina File:DJI 0059-HDR-Edit.jpg|Pedestrian Bridge at Port City Colombo File:DJI 0025-HDR-Edit.jpg|Port City Colombo Beach File:DJI 0269-3.png|Port City Colombo - Progress Update File:DJI 0067-2.jpg|Port City Colombo view

References

References

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