The Pottuvil Area Coordination Committee meeting on Thursday unanimously passed a resolution to take action to remove the Pottuvil Shabad House, which has become centre point of controversy in the area and led to tight security following bomb scare last year.
Chabad House is a religious and cultural centre run by the Chabad-Lubavitch Movement, an ultra-Orthodox Jewish group based in New York, aimed at serving Jewish travellers, specially Israeli tourists, visiting the island nation.
However, there has been rising concerns over the Chabad House in this area, which is near a Muslim mosque and the U.S. Embassy in Colombo issued a travel alert level over possible terrorist threats in the Eastern coastal tourism hotspot.
A. Adambawa, a ruling National People’s Power (NPP) Parliament member and the chairman of the District Coordination Committee said there was a decision taken to discuss the way forward to remove the Chabad House without any disruption to tourism activities.
“We decided to discuss the way forward to remove the Chabad House without any disruption to tourism activities and conflicts among different religious people,” Adambawa MP said.
“There has been tension within the community surrounding this Chabad House and they have been also complaining that it has been operating without a valid registration. So, at the meeting, we decided to look into all these aspects and discuss the removal with the respective Government officials.”
Sri Lanka has seen a sharp rise in the number of Israeli tourist arrivals, with around 25,000 Israeli visitors in 2024 from 9,300 two years ago. Many gravitate to coastal hotspots such as Arugam Bay and Hikkaduwa, drawn by surfing culture and budget travel appeal.
In response, several Chabad Houses—Jewish religious centres offering kosher meals, prayer spaces, and community services—have been established in these locales, often unregulated and without formal Government approval.
Alongside these, numerous Israeli-owned restaurants and surf camps have sprung up, some offering services exclusively in Hebrew and reportedly catering only to Israeli clientele. Government official say most of these business entities violate local rules for company registration and visa.
Visa misuse, informal business
Local communities voice unease over Israeli operations that appear outside visa rules and business norms, including Israelis working on tourist visas or leasing land for unlicensed enterprises.
The growing presence of Israeli nationals in Sri Lanka—especially in tourist hotspots such as Arugam Bay, Ella, and Hikkaduwa—has sparked controversy due to alleged misuse of tourist visas for business purposes and illegal or unregulated business operations.
There’s anger over “foreign-only” restaurants and surf camps that exclude locals, driving up property prices and sidelining Sri Lankan entrepreneurs.
In Muslim-majority areas such as Arugam Bay, reports of Israeli tourists wearing pro-military symbolism and Hebrew signage near mosques have heighted cultural friction, especially amid Gaza conflict tensions.
Many Israelis enter Sri Lanka on tourist visas but some are engaged in business activities such as running hostels, cafés, or surf shops. Under Sri Lankan law, a tourist visa does not permit employment or business activity. There are reports of Israeli-owned businesses operating informally without proper business registration or tax compliance.
Some restaurants, cafés, and guesthouses are believed to be catering exclusively to Israeli tourists, undermining local businesses in the respective areas. They operate without proper permits, business licences, or BOI (Board of Investment) approval and do not contribute taxes, depriving the local economy of revenue.
These businesses are often advertised only on Israeli apps, forums, and private WhatsApp groups, avoiding local visibility and scrutiny.
Local business owners and communities in tourist areas have expressed concerns that Israelis are undercutting local businesses using unregulated operations. Some Israeli-only places exclude non-Israelis, creating tension in mixed communities. The Chabad Houses and restaurants, sometimes, operate in Muslim-majority areas, leading to religious and cultural sensitivity.
Sri Lankan immigration authorities have, in recent months, deported some Israelis for overstaying or visa violations and increased scrutiny of tourist visa holders believed to be engaged in business.
Though the authorities have investigated the Chabad Houses and Israeli-run businesses and visa irregularities, political pressure and tourism lobbying have sometimes made enforcement inconsistent.
The controversy is amplified due to Israel’s war in Gaza, which has increased hostility towards visible Israeli activities, especially in Muslim-majority parts of the country. Chabad Houses and Israeli businesses have been seen as symbols of foreign influence, prompting calls for more oversight.
Chabad Houses in Sri Lanka
Chabad Houses are informal Jewish community centres designed for religious worship, kosher meals, and support for Jewish travellers.
In Sri Lanka, these include branches in Arugam Bay, Colombo, and Hikkaduwa. While they serve visitor needs, many were built or operated without formal planning permits or immigration authorisation, prompting concerns over legality.
A Parliamentary Sectoral Oversight Committee on Economic Development and International Relations has been informed that only two out of the five Chabad Houses established in Sri Lanka have been registered under the Companies Act.
However, in its official website, Chabad Sri Lanka says it operates only four Chabad Houses in Sri Lanka: Colombo at Ananda Coomaraswamy Mawatha, Arugam Bay at Mafaza Mosque Road, Weligama at Buhari Masjid Road, and Ella at Club Villa.
A BBC report in October last year reported how the Chabad-Lubavitch Movement celebrated ‘Israeli heroism’ in the war and how the Chabad House in Arugam Bay put up pictures of dead Israelis out in its notice-board outside.
Despite all these, Chabad Houses and some individuals in them are given special security at the expense of Sri Lanka taxpayers’ money.
In January, Prime Minister Dr. Harini Amarasuriya told Parliament that that no Government institution has granted authorisation for the construction of Israeli religious centres or similar establishments in the country. She acknowledged the existence of such centres but added that they are being maintained without Government authorisation. She also promised necessary action to address the matter.
Growing Israeli-only restaurants
Arugam Bay and other coastal towns now feature a surge of Israeli-run eateries, guesthouses, and surf camps. These often display Hebrew menus, hire Israeli staff on tourist visas, and reportedly cater exclusively to Israeli or Jewish tourists, reducing opportunities for local participation.
Locals contend that such operations evade taxation, undercut local businesses, and weaken community ties, as Sri Lankan partners lack oversight or payment of dues. The phenomenon has been described as emerging “tourist enclaves” leading to exclusion and marginalisation.
Tensions have erupted on multiple fronts between locals and Israelis including surfing altercations, cultural friction, Legal grievances: Locals accuse Israeli-run businesses of violating visa laws and siphoning foreign currency without contributing to Sri Lanka’s economy.
Government response
Facing growing public and parliamentary pressure, the Government has pledged action. Prime Minister Dr. Amarasuriya said that no official permission was granted for Israeli religious sites or unauthorised businesses and vowed to shut them down and enforce visa regulations.
Police have launched an investigation into tourists operating businesses or religious centres on tourist visas, with hotels urged to report suspect activity.
Nonetheless, rights groups note delays in enforcement, with visa-overstay crackdowns reportedly deprioritised due to perceived security considerations
Sri Lanka is navigating a delicate balance: the economic benefit of rising Israeli tourism versus mounting social and legal risks. While Israeli visitors contribute to tourism revenues, hosts worry about unchecked cultural enclaves, visa abuse, and erosion of local norms.
The number of Israeli tourists has almost tripled in the two years through to 2024. The debate ties into broader geopolitical sympathies—Sri Lanka has voiced support for Palestine at the UN, making Israel-linked presence symbolic and charged.
To uphold sovereignty and social cohesion, the Government must implement consistent law enforcement, ensure regulatory compliance, and foster dialogue between communities, tourism stakeholders, and local authorities. Only then can the economic upside of tourism coexist with respect for local rights and cultural plurality.
Sri Lanka now faces a crossroads: welcoming tourism or risking social rupture. The response will be a test of governance, cultural sensitivity, and economic pragmatism in a rapidly globalising tourism landscape.
