Colombo Port City Economic Commission (Amendment) Act 2026

Th is Act may be cited as the Colombo Port City

Economic Commission (Amendment) Act, No. 1 of 2026.

Section 27 of the Colombo Port City Economic

Commission Act, No. 11 of 2021 (in this Act referred to as the “principal enactment”) is hereby amended by the insertion immediately aft er subsection (2) thereof, of the following new subsection: -

“(2a) Unless a licence and a certifi cate of registration are issued to an applicant as required under the provisions of subsections (3) and (4) of section 26, the Commission shall not charge any fee, including a land use fee, other than the fee specifi ed in subsection (2) from such applicant.”.

Section 35 of the principal enactment is hereby repealed and the following section is substituted therefor: -

35. (1) A person to whom a registration, licence, authorisation or other approval has been issued or granted prior to the date of commencement of this section by the

Commission to engage in business in and from the Area of Authority of the Colombo Port City, may employ any person, whether a resident or a non-resident, and such employee shall be remunerated in a designated foreign currency, other than in Sri Lanka Rupees.

For the purposes of subsection (1), for a period of three years commencing from the month immediately following the month in which this section comes into operation-

any employment income of a resident employee employed by a person referred to in subsection (1) shall be exempt from income tax and shall be deemed to be a permissible credit to a personal foreign currency account of such resident employee; and

any employment income of a non-resident employee employed by a person referred to in subsection (1)

Any employment income of a resident employee and a non-resident employee of a person to whom a registration, licence, authorisation or other approval has been issued or granted by the Commission on or after the date on which this section comes into operation shall be liable to income tax.”.

Section 36 of the principal enactment is hereby amended by the substitution for the words “to a designated foreign currency in such manner and subject to such conditions as shall be prescribed.”, of the words and fi gures “to a designated foreign currency as may be prescribed under the provisions of the Foreign Exchange Act, No. 12 of 2017.”.

Section 42 of the principal enactment is hereby amended as follows: -

by the repeal of subsection (1) of that section and the substitution therefor, of the following subsection: -

by the repeal of subsection (2) of that section and the substitution therefor, of the following subsection: -

in subsection (3) of that section, by the substitution for the words “grant a licence under the Banking Act”, of the words “grant a licence under this Act”.

The following new sections are hereby inserted immediately after section 42 of the principal enactment and shall have effect as sections 42A, 42B, 42C, 42D, 42E and 42F of that enactment: -

42A. (1) The Central Bank shall carry out the regulation and supervision of a person to whom a licence has been issued to carry on offshore banking business under this Part.

“Application of international banking standards

Colombo Port City Economic Commission

For the purposes of subsection (1), the

A person to whom a licence has been issued to carry on offshore banking business under this

For the purposes of subsection (2), the international standards shall include, but not be limited to, the requirements on capital adequacy, liquidity, risk management, supervisory review, and market discipline.

A person to whom a licence has been issued to carry on offshore banking business under this Part shall make periodic public disclosure including, but not limited to, of its fi nancial position, capital adequacy, and liquidity, subject to the directions issued by the Central Bank in accordance with the international standards adopted from time to time.

Such disclosure shall be in a form and manner as may be specifi ed by the Central Bank by way of directions.

fails to comply with any provision of this Act or any regulatory requirement imposed thereunder;

engages in any fraudulent, unsafe or unsound banking practices; or

carries on its operations in a manner which the Central Bank is of the view that it would be detrimental to the preservation of fi nancial stability, the Central Bank may require such person to take such corrective measures as it may consider necessary, or impose such penalties and restrictions as it may determine:

Section 43 of the principal enactment is hereby repealed and the following section is substituted therefor: -

43. (1) A licence to carry on offshore banking business in and from the Area of Authority of the Colombo Port City in terms of this Part may be suspended, revoked or cancelled by the

Minister assigned the subject of Finance on the recommendation of the Central Bank:

Provided that prior to the suspension, revocation or cancellation of a licence under this section, the Minister assigned the subject of

Finance shall afford the licensee an opportunity of being heard in its defence.

The Minister assigned the subject of

Section 45 of the principal enactment is hereby repealed.

Section 46 of the principal enactment is hereby repealed and the following section is substitute therefor: -

“Suspension, revocation or cancellation of a licence

46.

“Nature of business that may be conducted by a person issued with a licence to carry on offshore banking business

Any person to whom a licence has been issued to carry on offshore banking business under this Part may conduct any of the following businesses: -

accept savings, time and demand deposits from any non-resident in any designated foreign currency;

borrow any sum in a designated foreign currency from any non-resident;

extend accommodation to any non-resident in any designated foreign currency;

engage in any transaction in any designated foreign currency with any other offshore unit;

engage in any other transaction in any designated foreign currency with a non-resident;

engage in any other transaction in any designated foreign currency, as may be envisaged under this Act; or

engage in any other transaction in any designated foreign currency, authorised by the Commission with the concurrence of the Central Bank.

Without prejudice to the provisions of subsection (1), a person to whom a licence has been issued to carry on offshore banking business under this Part may accept savings, time and demand deposits from, or lend to any authorised person or resident in any designated foreign currency, subject to the prior written approval of the Central Bank:

to the objects of the Central Bank under the provisions of the Central

to effectively carry out the prudent and effective management of offi cial international reserves under the provisions of the Central Bank of Sri

Without prejudice to the other provisions of this section, a person to whom a licence has been issued to carry on offshore banking business under this Part may, subject to such terms and conditions as the Central Bank may consider necessary, borrow in any designated foreign currency from banks licensed under the

Nothing contained in this section shall prevent a person to whom a licence has been issued to carry on offshore banking business under this Part from opening and maintaining a non-interest-bearing rupee account in any licensed commercial bank in Sri Lanka for the purposes of meeting expenditure relating to its operations, and credit to such account shall be through conversion of foreign currency remitted into Sri Lanka.”.

Section 48 of the principal enactment is hereby repealed and the following section is substituted therefor: -

48. (1) The Central Bank shall-

issue by way of a direction, a list of qualifi ed auditors to audit the accounts of a person to whom a licence has been issued to carry on offshore banking business under this Part;

cause such person to appoint an auditor from among such auditors;

require such person to submit the report of the auditor for the review of the

require such further audits by the same auditor or such other auditor from the list, as may be required, if in the opinion of the Central Bank, the audit report submitted under paragraph (c)

A person to whom a licence has been issued to carry on offshore banking business under this Part shall cause a copy of such audit report as referred to in subsection (1) to be served on the Commission at the same time such report is submitted to the Central Bank.”.

Section 49 of the principal enactment is hereby repealed.

The following new section is hereby inserted immediately after section 51 of the principal enactment and shall have effect as section 51A of that enactment: -

51A. Nothing contained in this Part shall apply to banks licensed under the Banking Act that carry out their operations in and from the

Area of Authority of the Colombo Port City with the approval of the Central Bank under the

Banking Act.”.

Section 52 of the principal enactment is hereby amended as follows: -

in subsection (2) of that section, by the substitution for the words “may identify businesses,”, of the words “may identify businesses according to the criteria as may be prescribed,”;

immediately after subsection (3) of that section, by the insertion of the following new subsection: -

by the repeal of subsection (5) of that section and substitution therefor, of the following new subsections: -

by the repeal of subsection (7) of that section and the substitution therefor, of the following subsection: -

The following new sections are hereby inserted immediately after section 52 of the principal enactment and shall have effect as sections 52A, 52B, 52C, 52D and 52E of that enactment: -

52A. (1) The Commission shall, from time to time as it deems appropriate in respect of any project, evaluate the ex-post monitoring of key performance indicators, and disclose the outcomes and fi scal impacts of the Businesses of Strategic Importance to the public by publication on its offi cial website.

“Ex-post monitoring of

Businesses of Strategic

Importance

Colombo Port City Economic Commission

Where any authorised person of Businesses of Strategic Importance fails to comply with the approved key performance indicators, the Commission shall issue a notice of non-compliance to the authorised person, which shall include—

the nature of the non-compliance;

a specifi ed time frame for corrective action;

a directive requiring immediate compliance and recommendation to take any other remedial or enforcement action as may be necessary to ensure compliance; and

a requirement to submit a compliance plan, where appropriate.

Where any authorised person of

restrict, suspend or revoke any or all exemptions or incentives granted under this Act in respect of the Businesses of

impose administrative penalties to recover the loss incurred in that connection.

The Commission shall, before taking action specifi ed in paragraph (a) or (b) of subsection (3) of section 52A, issue a notice in writing to the authorised person of the Businesses of Strategic Importance, specifying the grounds for the action.

A notice under subsection (1) shall require the authorised person of the Businesses of Strategic Importance to show cause within a period of one month from the date of receipt of the notice, as to why the actions specifi ed in paragraph (a) or (b) of subsection (3) of section 52A should not be taken.

The authorised person of the Businesses of Strategic Importance shall be afforded a reasonable opportunity to be heard, either in person or through an authorised representative, before a fi nal decision is made.

Upon the consideration of any representations made by the authorised person of the Businesses of Strategic Importance or his representative, the Commission may, for the reasons to be recorded in writing, restrict, suspend, or revoke any or all exemptions or incentives granted under this Act in respect of the Businesses of Strategic Importance.

Section 53 of the principal enactment is hereby amended by the repeal of paragraph (c) of subsection (2) of that section and the substitution therefor, of the following paragraph: -

“(c) the proposed date of commencement and the date on which such exemptions or incentives shall cease as prescribed;”

.

Section 71 of the principal enactment is hereby amended in subsection (2) of that section as follows: -

by the repeal of paragraph (o) of that subsection;

by the repeal of paragraph (p) of that subsection and the substitution therefor, of the following paragraph: -

Section 75 of the principal enactment is hereby amended as follows: -

by the insertion immediately after the defi nition of the expression “business”, of the following new defi nition: -

by the insertion immediately after the defi nition of the expression “Government Marketable

In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.

Colombo Port City Economic Commission