📈 Port City & BOI Target Gulf Investments Amid Policy Gaps

Sri Lanka is positioning the Port City Colombo and the BOI to capture capital inflows from the Middle East, specifically targeting BPO and disaster recovery operations from the UAE. While the current regional climate presents an opportunity, the Committee on Public Finance (CoPF) has flagged critical execution delays. • Investment & Approvals 70 pending investment applications were cleared following the January 2026 Port City Act amendments. A two-year extension (until May 2028) has been Cabinet-approved for Port City businesses to operate from interim locations outside the zone. The Government has committed approx. Rs. 10.5 Bn for utility infrastructure up to the Port City boundary, including Rs. 7 Bn for water supply. • Critical Constraints Lack of a formal coordination mechanism between the BOI and the Port City Commission. Regulatory bottlenecks in offshore banking (pending CBSL clearance) and manual administrative processes. Concerns over "market distortions" due to differing tax incentive structures between the two investment bodies. • Strategic Focus The outreach aims to leverage diplomatic channels in the Gulf to attract firms seeking regional alternatives. However, CoPF warns that the window of opportunity is limited unless "single-window" digitized workflows are urgently implemented to streamline approval timelines. _Data based on CoPF proceedings as of March 2026._