By:Staff WriterColombo (LNW): Spanning 269 hectares of ocean reclamation, Port City Colombo, which also includes first ever Special Economic Zone dedicated for exports of services is providing reliefs for investors include concessionary 50% tax rate; enhanced capital allowance; flexibility of currency choice on payment of dividends or other financial benefits by businesses
Initial 5-year roll-out plan envisages US $ 5.6 b in FDI which will fast-track Sri Lanka’s economic recovery, positioning both Port City and Sri Lanka as leading player in service export industry
Overall, Colombo Port City envisages creating over 140,000 direct job opportunities and contribute $13.8 b to Sri Lanka’s GDP annually
Estimated fiscal revenue of $ 1.7 b is expected at construction stage while recurring revenue of approximately $ 700 m per annum is expected at operational stage of project
In a major breakthrough to boost foreign direct investments, the incentives and tax exemptions for investors intending to start ventures in the Colombo Port City have been published by the Government via Extraordinary Gazettes (2339/31 and 2339/32) dated 7 July.
Two prospective groups of investors have been identified who will be able to avail themselves of these incentives and tax exemptions.
Businesses that invest $ 100 million per plot of land or a pro-rated investment in a subdivided plot of land according to the Colombo Port City (Development Control) Regulations or one that will make an investment of a minimum of $ 25 million in the plots of land for the Marina will be entitled to exceptions or incentives according to several schemes set out in the gazette.
These include an incentive of 50% of the prevailing corporate tax rate applicable for the respective year of assessment under the Inland Revenue Act, No. 24 of 2017 from all gains and profits and an incentive of an enhanced capital allowance of 300% of the expenses incurred on depreciable assets,
A second gazette issued on the same date stated companies can pay investors dividends or any other financial benefit on the investment in a designated foreign currency other than in Sri Lanka Rupees.
The Commission has leased out marketable land to a person or company under section 39 of the Act and a dividend or any other financial benefits accrues to the investor within a period of five years from the date of the lease paid,
It also set out that businesses operating within the Port City may accept payments in Sri Lankan Rupees in respect of any goods or services provided subject to several conditions including depositing it in a Rupee account of a licensed commercial bank and converting it to another currency through the same.
The gazette also identified investments that will be considered Secondary Businesses of Strategic Importance. These can include companies working in the areas of global and regional economic activity in international trade, shipping logistic operations, offshore banking and finance, IT etc ,
The initial 5-year roll-out plan envisages $ 5.6 billion in FDI which will fast-track Sri Lanka’s economic recovery, positioning both Port City and Sri Lanka as a leading player in the service export industry.
Overall, Colombo Port City envisages creating over 140,000 direct job opportunities and contributing $13.8 billion to Sri Lanka’s GDP annually.
Estimated fiscal revenue of $ 1.7 billion is expected at construction stage while a recurring revenue of approximately $ 700 million per annum is expected at the operational stage of the project.