Sri Lanka’s economic recovery is paving the way for a fresh focus on investment, innovation, and digital transformation. At Disrupt Asia 2025, leaders from the Central Bank, government, and global partners highlight the importance of regulatory reforms, targeted incentives, and collaboration to attract capital, grow startups, and build a competitive, future-ready economy.
Central Bank of Sri Lanka Governor Nandalal Weerasinghe on its role in driving Sri Lanka’s future economic and digital transformation
“We will soon publish a Payments and settlement Systems (PSS) roadmap, which will provide a clear direction for infrastructure, APIs, and regulatory enablers, inspired by models like India’s UPI.”
Sustainability
Sustainable growth, in my view, must be driven by reform and digitalisation, not traditional models.
The Central Bank is committed to enabling this transition. One critical area is capital account liberalisation. During the crisis, we had to impose strict controls, but today we are carefully relaxing these restrictions in line with stability indicators. We are developing mechanisms, together with the Board of Investment (BOI), EY, and so on that allow startups to invest abroad. This is vital for helping Sri Lankan tech companies scale and compete globally.
Regulatory Changes
We’re also reforming our regulatory environment to be more innovation-friendly. Following the rigidity of 2019’s FinTech regulatory sandbox, we have begun removing those barriers to make it easier for startups to test and scale financial technologies.
Beyond that, we are also focused on building a strong digital payments ecosystem. Adoption in everyday services, such as transport, tolls, and retail, needs to increase. To support this, we will soon publish a Payments and Settlement Systems (PSS) roadmap, which will provide a clear direction for infrastructure, APIs, and regulatory enablers, inspired by models like India’s UPI.
Chief Advisor to the President of Sri Lanka on Digital Economy and Chairman of ICTA, Hans Wijayasuriya on how policymakers can help future-proof the digital economy
“Over the next decade, Sri Lanka must move from a cost-based outsourcing model to one anchored in intellectual property (IP), trust, and AI-driven value creation. The global ICT market has moved on, and our policies must reflect that reality”
Resilience
Policymakers must prioritise building a resilient, innovation-ready digital economy that shifts from surviving regionally to competing globally. Over the next decade, Sri Lanka must move from a cost-based outsourcing model to one anchored in intellectual property (IP), trust, and AI-driven value creation. The global ICT market has moved on, and our policies must reflect that reality.
A key priority is removing structural barriers that prevent local companies from scaling internationally. We must allow for capital mobility, including the redeployment of FDI for overseas expansion, while also ensuring companies retain their IP and headquarters within Sri Lanka. Legislative reforms, such as local IP revenue recognition and enabling capital flows, are already underway, and more must follow.
Practice and Planning
Sri Lanka must operationalise a dual-entity approach: the newly created GovTech will drive execution, while a Digital Economy Authority will define long-term strategy and governance. This model must be backed by a Cabinet-level subcommittee to ensure cross-ministerial coordination.
On the regulatory front, Sri Lanka should aim for a minimalistic, standards-based model, emphasising data-sharing protocols, open APIs, and ethical AI frame-works. Overregulation must be avoided, especially in high-growth sectors.
Additionally, enabling virtual incorporation and digital-first special economic zones, as seen in Estonia and Singapore, is essential. The BOI already supports this, so policymakers must now ensure that implementation is swift, legally secure, and investor-friendly.
Finally, enacting the Limited Liability Partnership (LLP) law and enabling tax-transparent investment vehicles, such as those regulated under the Collective Investment Scheme (CIS) framework, is necessary for Sri Lanka to attract onshore venture capital and retain its most promising startups.
In essence, the next ten years must be about creating a permissive, globally aligned, innovation ecosystem. Sri Lanka must become a launchpad, not a waypoint.
Senior Economic Advisor to the President, Country Managing Partner of EY Sri Lanka & Maldives, Duminda Hulangamuwa on balancing economic recovery with competitiveness
“On the legal reform side, we’re working on introducing key frameworks such as the LLP law, which is crucial for attracting venture capital and enabling stratup growth”
Prudence vs. Generosity
Striking the right balance between economic recovery, competitiveness, and long-term development is a complex but essential priority for Sri Lanka. We’re emerging from a severe economic crisis, so fiscal prudence prevents us from being able to afford overly generous incentives that may jeopardise macroeconomic stability.
However, to attract meaningful foreign investment and position Sri Lanka as a regional hub, particularly in tech and services, we must offer smart, targeted incentives within well-governed frameworks, such as we did with the Colombo Port City Economic Commission Act.
We’re also revising laws like the Strategic Development Projects (SDP) Act to offer incentives for investments above $50 million, though these are more moderate and time-bound than before.
On the legal reform side, we’re working on introducing key frameworks such as the LLP law, which is crucial for attracting venture capital and enabling startup growth. This will be accompanied by tax reforms to prevent double taxation on LLPs.
Committing Public Assets
The BOI has launched two IT parks in Galle and Kurunegala as plug-and-play zones near skilled labour pools. We’re also exploring repurposing government-owned land and buildings in Colombo, though a full assessment is pending.
A key challenge is the government valuation requirement for public assets, which often makes prices too high for private investors. To overcome this, we’re developing a transparent policy to allow discounted valuations for public-interest projects, including tech parks, schools, and hospitals, while ensuring accountability and avoiding past undervaluation issues.
Ultimately, this is about coordination: aligning our legal, fiscal, and infrastructure reforms to support long-term competitiveness while remaining responsible stewards of the economy. Instead of short-term giveaways, we have to build a resilient and attractive investment ecosystem grounded in transparency, innovation, and strategic public-private collaboration.
Country Manager for Sri Lanka & Maldives of World Bank Group, Gevorg Sargsyan on aligning its efforts with the government’s digital economy goals
“Sri Lanka does not need to reinvent the wheel. We are drawing lessons from successful international examples, such as Estonia’s digital ecosystem, Brazil’s fintech-friendly payments platform, and our regional neighbours, to adapt proven models to local conditions.”
Universal Development
Building on our longstanding engagement in areas like STEM education, university incubators, data protection, and support for female tech entrepreneurs, we are focused on three key pillars to ensure effective implementation: skills development, policy enhancement, and digital infrastructure.
To begin with, it is critical that we address the skills gap. Sri Lanka benefits from a relatively high digital readiness, but there remains a significant shortage of appropriately skilled professionals, particularly in backend IT roles. Traditional education systems cannot adapt quickly enough to meet the rapidly evolving demands of the digital sector. Therefore, we are committed to facilitating critical reskilling and upskilling initiatives, including establishing digital accelerator spaces that focus on emerging technologies and social data.
Next, policy development is a cornerstone of our support. We work closely with the government to strengthen frameworks around data protection, cybersecurity, and the strategic use of data for decision-making. Although internet penetration rates around 60% are promising, they fall short of bench-marks like China’s, so policies that promote wider connectivity and digital inclusion are vital.
Finally, digital infrastructure forms the foundation of this transformation. In collaboration with the Ministry of Finance, we are finalising programmes to build robust digital identity systems and government service portals that create an integrated ecosystem. This approach enables various stakeholders to plug into shared platforms, fostering innovation and efficiency.
Old Lessons, New Moves
Importantly, Sri Lanka does not need to reinvent the wheel. We are drawing lessons from successful international examples, such as Estonia’s digital ecosystem, Brazil’s fintech-friendly payment platforms, and our regional neighbours, to adapt proven models to local conditions. By adopting and perfecting these approaches, Sri Lanka can confidently accelerate its digital transformation and create a vibrant, inclusive digital economy.