ECONOMYNEXT – Sri Lanka will amend Strategic Development Projects Act and Colombo Port City Economic Commission Act to boost Foreign Direct Investment (FDI) into the island nation, President Anura Kumara Dissanayake said while presenting 2026 budget.
Dissanayake in his capacity as the country’s Finance Minister said the aim of creating an investor friendly climate is to ensure long term prosperity for all Sri Lankans.
“Legal-based incentives for both local and foreign investors will be given,” he said.
“Amendments will be brought in to Strategic Investment Act and Colombo Port City Economic Commission Act. These amendments will be brought in and passed in the first quarter of the next year.”
“Through these amendments are expected to streamline the foreign direct investments, improve the transparency on incentives, and benefits for foreign investors.”
“Through these amendments, we expect a significant increase in the foreign direct investments into this country.”
The Strategic Development Projects Act in 2008 was intended to fast-track major investments through exemptions from key laws while the Colombo Port City Economic Commission Act in 2021 was to enacted to establish a special economic zone (SEZ) with up to 40-year tax holidays and regulatory autonomy to lure USD 15 billion in FDI by 2041.
However, Sri Lanka has largely failed to attract substantial foreign direct investment over the past decade amid the 2022 sovereign default and ensuing crisis.
Core reasons include chronic policy instability and regulatory unpredictability, with fragmented authority across agencies like the Board of Investment (BOI) causing lengthy approval processes, often exceeding months for reviews and bureaucratic red tape that frustrates investors, compounded by opaque procurement, court challenges over environmental impact assessments, and land acquisition hurdles under restrictive laws prohibiting foreign ownership. (Colombo/November 07/2025)
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