EY says new Port City incentive significant with sharper focus on scale, timing

EY Sri Lanka has said the new Colombo Port City tax regulations shift incentives firmly toward investment scale and execution certainty, offering up to 15-year income tax holidays for large projects while requiring investors to align closely with licencing and designation stages to secure benefits.

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The firm noted that although the incentive framework remains attractive, it is now more tightly linked to project size, job creation and application status, underscoring Port City's ambition to attract major anchor investors while providing a defined pathway for secondary businesses.

The new regulation, signed on 20 September, replaces rules issued in August 2023 that expired in August this year. It applies to businesses identified as "strategic" within the zone on or after the effective date.

Projects already in the pipeline may fall under either the old or new regime depending on whether they have been gazetted as a Business of Strategic Importance (BSI) or remain at an earlier stage.