Four Colombo Port City projects over US$ 1bn granted strategic status

By Nishel Fernando

Colombo Port City Economic Commission has formally designated four major real estate development projects as Primary Businesses of Strategic Importance, signalling a significant step forward in the development of the special economic zone. 

The designations, formalised through gazette notifications issued on July 14, 2025, by President  Anura Kumara Dissanayake in his capacity as the Minister of Finance, Planning and Economic Development, unlock a series of exemptions and incentives for the investing companies.

The four companies receiving this status are IFC Colombo 1 (Private) Limited, Ceylon Real Estate Holdings (Private) Limited , Clothespin Management and Development (Private) Limited , and ICC Port City (Private) Limited. These designations are based on the recommendation of the Colombo Port City Economic Commission and have received approval from the Cabinet of Ministers.The projects collectively represent a substantial foreign direct investment influx into Sri Lanka, aimed at creating a vibrant commercial, residential, and tourist hub within the Port City.IFC Colombo 1 (Private) Limited is a subsidiary of CHEC Port City Colombo (Private) Limited, which is owned by China Harbour Engineering Company (CHEC), will undertake real estate development on a 12,561.60 sqm plot. The company plans to invest approximately US$ 142.71 million, with US$ 94.98 million allocated for construction and US$ 47.73 million for the land investment, all sourced from foreign direct investment. The project aims to create a thriving real estate ecosystem by integrating commercial, retail, and residential elements.

Ceylon Real Estate Holdings (Private) Limited is a subsidiary of Browns Investments PLC, the strategic investment arm of LOLC Holdings PLC, will develop a business and commercial city complex on a 30,629.92 sqm mixed-use plot. The project includes an investment of approximately US$ 320.4 million for construction, US$ 90.6 million for other costs, and Rs. 32.16 billion for the land investment. It will feature Grade A office space, retail space, and high-end residential units, with the office spaces expected to create 4,000-6,000 jobs.

Clothespin Management and Development (Private) Limited Is set to develop the “Clothespin Towers,” a twin-tower marvel on a 24,324 sqm plot. The project involves a total investment of US$ 540.1 million, with US$ 75 million for the land lease and US$ 465.1 million for construction and pre-operative expenses. The development will feature luxury residences, a seven-star hotel, high-end retail, elite office spaces, and the world’s largest vertical art gallery. The structure is also aiming for a Guinness World Record as the world’s largest art piece.

ICC Port City (Private) Limited is established by International Construction Consortium (Private) Limited (ICC), a major player in Sri Lanka’s construction industry, this entity will develop a premier luxury residential project on a 13,945 sqm plot. The investment for this project is pegged at US$ 66 million and Rs. 13.8 billion, covering land and development costs. The project will consist of two luxury apartment towers and five luxury villas.Under the Colombo Port City Economic Commission Act, No. 11 of 2021, these Primary Businesses of Strategic Importance are granted significant fiscal incentives. For the first twenty-five years, all income, profits, dividends, and payments will be exempt from taxes under the Inland Revenue Act and the Withholding Tax. Following this period, a 50 percent incentive on the prevailing corporate tax rate will be provided for ten years.Furthermore, these businesses will receive exemptions from the Value Added Tax Act, Finance Act No. 11 of 2002, Finance Act No. 5 of 2005, Excise (Special Provisions) Act, Customs Ordinance, Ports and Airports Development Levy Act, and the Sri Lanka Export Development Act for imports and local purchases of business-related goods and services as approved by the Commission. The validity of these exemptions commences on July 14, 2025, with the tax holidays extending up to July 13, 2060, for the Inland Revenue Act and July 13, 2050, for most other enactments.The gazettes stipulate that the “Primary Business of Strategic Importance” status will be invalidated if the companies fail to enter into their respective land lease agreements with the Colombo Port City Economic Commission within six months from the date of the gazette’s issuance. The rationale behind these designations, as stated in the gazettes, is to advance the national economy and ensure the success of the Colombo Port City by attracting foreign direct investment, promoting tourism, and creating significant employment opportunities. One gazette, No. 2445/04, also rescinded a previous gazette from September 21, 2024.