Sri Lanka pitches tax holidays, ‘next Dubai’ vision to attract UAE investors

Sri Lanka is offering tax holidays of up to 15 years and positioning Colombo Port City as a new financial and trade hub as it seeks to attract UAE investors amid renewed political and economic stability, a senior minister said.

Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe told Gulf News that the government is streamlining investment approvals and incentives to make Sri Lanka a predictable and competitive destination for foreign capital.

“We have two broad investment opportunities – the Colombo Port City, which is being developed as a regional financial hub, and projects under the Board of Investment,” Abeysinghe said on the sidelines of the Invest Sri Lanka Investor Forum in Dubai.

“Some investments qualify for tax holidays of up to 15 years, along with other incentives. With the new Investment Promotion Act, all of this will be streamlined and made clearer.”

Abeysinghe said Sri Lanka’s political neutrality and expanding trade access make it attractive for Middle Eastern businesses looking to establish a regional base.

“Sri Lanka can trade and work with any country. We engage with China, the US, India and the Middle East,” he said, noting that the country’s neutral foreign policy gives investors access to global trade and investment routes.

Abeysinghe pointed out that Sri Lanka already enjoys preferential access to European markets and is negotiating further trade agreements.

The deputy minister highlighted agriculture, tourism, maritime logistics and renewable energy as priority sectors for foreign investors.

“Agricultural transformation is a major opportunity, particularly in crops that are unique to Sri Lanka,” Abeysinghe said. “There is also strong potential in luxury tourism, especially for Middle Eastern travellers, as well as in ports and maritime investments connecting East–West trade routes.”

Renewable energy, including green hydrogen and long-term energy storage, was another focus area, he said.

On his first visit to Dubai, Abeysinghe outlined the government’s ambition to draw lessons from Dubai’s economic transformation.

“The trajectory is clear. Stability is in place and reforms are under way,” he said. “We talk about Vietnam, South Korea and India’s turnaround. We talk about how Dubai came up, and next is going to be Sri Lanka.”

Abeysinghe acknowledged Sri Lanka lost growth opportunities over the past three decades due to delayed reforms, policy inconsistency and corruption, but said the situation has changed since 2022. 

“Our economy is now stable and predictable. Key reforms are being implemented, policies are consistent, and the legal framework for investment is being strengthened,” Abeysinghe said.

Sri Lanka has exceeded its fiscal and macroeconomic targets for 2024 and 2025, while land policy reforms and the digitisation of government services through GovPay are removing long-standing investment bottlenecks, he added.

“This is no longer a gamble. Investors can be part of Sri Lanka’s growth journey as long-term stakeholders,” Abeysinghe added.