As the Colombo Port City will be insulated from the domestic financial system there will be a more lax approach to foreign exchange controls in the special economic zone. The Foreign Exchange Act will not be applicable to Colombo Port City.
Central Bank of Sri Lanka Deputy Governor Yvette Fernando noted that though specific details are yet to be announced the Port City zone will not be subject to the foreign exchange controls that entities outside the zone but within Sri Lanka are. The Port City is currently not subject to foreign exchange controls. The framework governing Port City are yet to be made into legislation.
Fernando was speaking on yesterday at the Press Conference following the Monetary Policy Announcement at the Central Bank Head Office.
The Central Bank of Sri Lanka shall not have direct regulatory oversight of institutions registered in the Port City. A Bank registered in the Port City zone will not fall under the purview of the regulations of the Central Bank.
Foreign investors and individuals of Sri Lanka descent who are eligible due to the nature of their proceeds (e.g. earnings from work overseas) will be able to bring in said funds to the Port City for investment purposes. There will be a highly limited capacity for the government to forcefully appropriate the proceeds made to the special economic zone.
