Port City has issued 14,300 visas and cannot vouch for all of them, Parliament's finance committee is told

The Colombo Port City Economic Commission has issued 14,300 visas to foreign employees of Port City businesses but “cannot vouch for all of them”, Parliament’s Committee on Public Finance (CoPF) was told this week, the Daily FT reported.

The Commission polices that regime with a total staff of 16. Chairman Harsha Amarasekera, PC said it monitors visa holders through monthly reports submitted by the businesses themselves and random periodic visits by Commission officials. A committee member observed that the visa count averages about 200 for each business of strategic importance (BSI), and asked why some firms needed that many given what they do.

Why the committee is asking

CoPF Chairman Dr. Harsha de Silva said the issue runs past the Commission’s own remit into financial sector stability, anti-money-laundering compliance and the country’s reputation. Citing official data, he said first-quarter 2026 arrivals rose 458% from Myanmar, 258% from Vietnam and 70% from Cambodia — three countries widely associated with cyber scam compounds. He pointed to statements issued by the Vietnamese and Chinese embassies, the Chinese one on 29 May 2026, and to damaging headlines in foreign newspapers.

Amarasekera said that, to the best of the Commission’s knowledge, no scamming is taking place within the Port City, and no regulator had told it otherwise.

That assurance sits awkwardly against this newsroom’s own recent reporting. Two days before the committee met, police arrested a 39-year-old Chinese national over an alleged extortion racket targeting Port City investors, recovering four passports and 42 SIM cards; investigators later named him and said he is linked to cybercrime offences, and China asked for his deportation. Neither Daily FT filing mentions that case. The chairman’s claim is carefully bounded — it concerns scamming carried out within the zone, and the alleged extortion targeted investors in it — but the distinction is not one either filing draws.

The two suspended Authorised Persons

The Commission earlier suspended visa recommendations for two Authorised Persons (APs) after five Chinese nationals linked to them were detained and deported. Amarasekera said the suspension ran three weeks to a month while Commission and immigration officials inspected both businesses, and that — subject to correction — the five were turned away at the point of entry after failing to explain their purpose satisfactorily.

This is the same thread this desk reported in May, when Port City was in talks with police and immigration over whether visas routed through its licensed companies had been misused. Dr. de Silva made a pointed observation about how those cases end: in the absence of specific regulations, deportation orders are being issued for visa violations rather than on scam-related grounds.

One structural gap has survived the five months between those two hearings intact. In May, counsel for 37 Chinese nationals told a court their clients held Port City visas but worked from a Koswatte address because no offices had been built inside the zone. In October, Dr. de Silva asked whether business process outsourcing firms — required to operate from Grade A office space not yet available within the Port City, and currently working from various locations — are adhering to their agreements and not over-employing.

The committee asked the Commission to report within two weeks on how many recently Gazetted BSIs have brought in foreign workers, how many are in the country, their nationalities, length of stay and scope of work, and what share of each firm’s projected foreign hiring has actually been used.

Freehold title on leased land

In a companion filing, the Daily FT reports the committee is seeking the Attorney General’s opinion on whether Port City apartments can lawfully be sold freehold when the underlying land is held on 99-year leases.

Amarasekera said Section 38 of the 2021 Act empowers the Commission to lease or transfer condominium parcels on a freehold basis, and that because the Commission must join in each conveyance to the end purchaser, the provision closes a gap rather than creating one. Opposition MP Ravi Karunanayake disputed that, arguing Sri Lanka had told the world the Port City was available only on 99-year leases and that converting this to freehold creates a risk for the country. Dr. de Silva said that if the problem lies in the Act, amending it is Parliament’s job, not the Commission’s. A Government member noted the Attorney General’s Department had vetted the Bill before Parliament approved it.

Dollars in, rupees out

The funding rules drew equal scrutiny, and they are asymmetric. The entire construction cost of a primary project must be met in foreign currency raised outside Sri Lanka, and cannot be financed through foreign currency deposits or foreign currency loans from local banks. The apartments, however, may be sold in rupees — even entirely to local buyers. Foreign purchases must route through an Inward Investment Account. Developers that fail to bring in the full construction cost in foreign currency lose their exemptions under the Act.

Dr. de Silva cited one developer’s public claim that 50% of its units had sold before launch and that the project was worth $300 million. It is gazetted at $152 million, of which Amarasekera said the $110 million construction component must arrive as foreign currency. The Commission said it would audit actual construction costs rather than rely on disclosed figures.

Dr. de Silva listed where the regime falls short of global practice: presales face no restriction ahead of construction milestones, developers need not publicly disclose balance sheets, and beneficial ownership is not always clear. He urged escrow accounts so presale money is used for its intended purpose. The Commission said escrow had been discussed and that it is reviewing its condominium management regulations with the Legal Draftsman with a view to adopting such practices in the next revision.

On reporting, the Act requires annual returns, due at end-October under an expanded schedule. Amarasekera said the Commission obtains sales and inflow updates almost monthly anyway. Dr. de Silva questioned whether annual reporting is adequate.

$2,500 buys strategic status

The committee’s own review of the 68 secondary BSIs gazetted in April found most listed no parent company and many were incorporated in the British Virgin Islands. Some had invested as little as $2,500 yet qualified for BSI status and a 7.5% tax rate.

Amarasekera could not say what one business gazetted with a $10,000 investment actually does, but said each application is examined before approval. Where no parent company is listed, the Commission said, the applicant is owned by individuals who are screened as beneficial owners; beneficial ownership information is collected at application, and provisions from this year’s Companies Act amendments have been made mandatory in annual returns.

Earlier approvals have also faltered. Of 10 the committee reviewed, Dr. de Silva counted five withdrawn, though the Commission said some he named had never been gazetted. One withdrawn project had promised a seven-star hotel and a vertical art gallery aimed at a Guinness World Record; its investor paid only a $10,000 application fee and is believed to have forfeited a token deposit.

Dr. de Silva urged the Commission to reconsider appointing a full-time legal head. Amarasekera said it relies on the Attorney General for substantive advice, and that its Director-Commercial, who has a legal background, was recently authorised to sign off as Director-Legal — with no Director-Legal salary being paid.

Members also raised a question nobody could answer: where Port City residents would vote in local government elections. The Commission said it would seek advice.

Not reported

Neither filing gives the date of the committee session, names the developer whose $300 million claim was questioned, or identifies the two suspended Authorised Persons or the businesses behind them. Neither says how many of the 14,300 visa holders are currently in the country, how many have left, or how the 14,300 splits between the primary and secondary BSIs.

Neither reports a response from the Attorney General’s Department, the Department of Immigration and Emigration, the Central Bank or the Financial Intelligence Unit, and neither says when the AG’s opinion on the freehold question is expected. There is no indication of what action, if any, follows if the two-week report shows firms have brought in far fewer workers than their visa allocations imply.

Both filings come from the same newsroom, so this account rests on one verified domain. No other verified outlet had published on the session at the time of writing.

Sources: Daily FT — visa count and oversight gaps, Daily FT — freehold, pre-sales and BSI ownership.