The expansion of Colombo Port City’s services economy through 68 Secondary Businesses of Strategic Importance could help Sri Lanka retain talent and attract foreign capital. But it could also create an uncomfortable economic divide between a highly dollarized enclave and the wider rupee-based economy.
That possibility deserves far greater attention as the government moves to legally establish the new framework.
Cabinet approved the designation of 68 businesses on March 30, 2026, under the Colombo Port City Economic Commission Act No. 11 of 2021. The enabling regulations were published in an Extraordinary Gazette on April 10 and are now scheduled to go before Parliament.
The businesses span information technology, consultancy, BPO, logistics, infrastructure, hybrid business models and other commercial activities.
Their strategic importance lies not simply in what they sell, but in how they are expected to operate.
Foreign direct investment will provide the principal capital pipeline, while qualifying companies can remunerate employees in foreign currencies. Combined with tax and regulatory concessions, this creates an economic environment markedly different from the conventional Sri Lankan business landscape.
Supporters argue that this is precisely what Sri Lanka needs.
A country struggling to attract foreign currency and retain skilled workers could use Port City to establish an international services hub. Technology specialists, lawyers, consultants, financial professionals and other skilled workers could potentially earn internationally competitive salaries without leaving the country.
That could slow the brain drain while generating additional economic activity.But there is another side to the equation.
A rapidly expanding dollar-based enclave could develop its own labour market, pricing structures and commercial ecosystem, increasingly disconnected from the wider economy. Workers earning foreign currencies would possess significantly greater purchasing power than many employees whose incomes remain denominated in rupees.
Over time, that could intensify inequality.
Property, services and professional salaries inside and around the zone could rise faster than elsewhere, potentially creating a premium economic corridor accessible primarily to internationally connected businesses and high-income workers.
There is also a regulatory challenge.
The more Port City operates under special rules and exemptions, the greater the responsibility placed on the Colombo Port City Economic Commission to ensure that the enclave does not become vulnerable to money laundering, illicit financial flows, tax avoidance or other forms of international financial scrutiny.
The issue is not whether Port City should have special rules. International financial centres routinely operate with specialised regulatory frameworks.
The real question is whether those rules will be sufficiently transparent, robust and internationally credible.
Sri Lanka cannot afford to build a successful financial and services hub only to see its reputation damaged by regulatory weaknesses.
The government’s reported success in attracting an additional US$600–900 million through the 68 businesses, taking secured investment to approximately US$2.1 billion, is encouraging. But it remains far below the transformative scale originally associated with the Port City vision.
That makes the next phase critical.
The 68 businesses must become gateways connecting the international economy with Sri Lanka—not walls separating a dollar-rich enclave from a financially constrained nation.
If managed properly, Port City could become a powerful engine for foreign exchange, exports and skilled employment. If poorly managed, it could instead produce two economic realities within one country: one dollarized, globally connected and heavily incentivised, and another still struggling under the weight of the national economy.
The government’s real challenge now is not simply attracting companies.It is ensuring that Port City’s prosperity ultimately spreads beyond its boundaries.