Everyone thinks of starting a business in foreign countries. But most of the people don’t know the appropriate process. There is not enough information online that can guide you to incorporate an overseas business. Keeping that in mind this article is designed for people who want to start a business in Sri Lanka.
The government of Sri Lanka is providing more opportunities & facilities for foreign investors. Recently Sri Lanka launched a one-stop online shop to help the foreign investor to obtain all official approvals.
However, to help foreign investors to set up a business in Sri Lanka, we start our services. Our services are new company registration in Sri Lanka, accounting, income tax, and business advisory.
As Sri Lanka foreign company registration, formation service provider, we guide as FDI law and Company Act to foreigners register a company.
- 1 Company Formation Sri Lanka- Part 1
- 2 Company Formation Sri Lanka- Part 2
- 3 Timeline of company Registration in Sri Lanka
- 4 Condition for Incorporating Business in Sri Lanka
- 5 At a glance of company registration in Sri Lanka
- 6 Company Registration in Sri Lanka
- 7 How to register a company in Sri Lanka
- 8 Branch Office open in Sri Lanka
- 9 Income Tax Sri Lanka
- 10 New company registration fees in Sri Lanka
- 11 Company registration pros and cons in Sri Lanka as foreign investors:-
- 12 Related information is as follows
Company Formation Sri Lanka- Part 1
Name Registration: For company formation in Sri Lanka, the first task is to apply for company name approvals to the Department of Company Registration. The company name will not be approved if the company name is similar to an existing company.
Company Secretary: According to the laws of the Sri Lankan Government, every foreign company must appoint a Sri Lanka Secretary. S&F consulting service is providing secretarial service to their client since 2012.
Address Registration: The next steps are to register on the local address. Every foreign company is required to provide the documentation of local registered address to incorporate the business.
Business Constitution: You need to prepare an Article of Association to maintain the rules and regulation of Companies Act-7 of 2007. The article must contain the objectives of your business, rights & obligation of shareholders and information about the management & administrative body of the companies.
However, some additional supporting papers are needed to be prepared and submitted to MOA. The supporting papers needed to be attested by the person of government body. Not only company incorporation but some other license also requires to register a private limited company, which depend on the type of business.
Company Formation Sri Lanka- Part 2
News Paper Advertisement: According to the company Acts, every company needs to publish their information into three newspapers. All information shall be cleared in the newspaper such as business address, company name, contact number, company registration number, and company type, etc.
BOI Approval: Not all business needs BOI approval to conduct their business. However, some business needs. In case of an environmental certificate, visa of directors/ workers, company set up in the tax-free zone, foreign investor’s service and others are services area of BOI.
SEC permission: New business can be incorporated without the approval of the SEC if the company is private limited & have a small number of capitals. Companies who are registered with stock exchange and have public shares needs approval from SEC, Sri Lanka.
Timeline of company Registration in Sri Lanka
It takes around 21 days to complete the process of privately limited company registration in Sri Lanka. From our experience of company registration in Sri Lanka— it may take around 3 weeks to 3 months to complete the entire registration process of a business (including export, import, other licenses). Mainly the time of registration depends upon the number of permissions you need to incorporate a business in Sri Lanka.
Condition for Incorporating Business in Sri Lanka
Foreigners are not allowed usually to incorporate a retail business in Sri Lanka unless meets the condition of remittance of US$ 1 million. In case of starting a wholesale business, you will not be issued to invest US$ 1 million (depend on authority motive).
100% Foreign-Owned Company
100 % foreign ownership company is allowed to register a business in Sri Lanka. In cases of joint venture companies’ local partner should hold at least 51 % shares and other 49% shares can behold by foreigners. 100% ownership company needs to appoint nominee director (must be Sri Lankan Citizen) upon condition with no shares of the company.
Export Import business in Sri Lanka
According to the Sri Lankan Business policy, to start export and import business it requires the US $ 1 Million. The following papers are required to apply for import & export license in Sri Lanka
- Application form of export license (available in office)
- Two copies of Performa bill
- Company certified incorporation copies
- Passport/ National ID card of applicant
- Testimonial from relevant department of Goods.
However, the current FDI position of Sri Lanka is US$ 925,280,499 (+/-) that indicates its FDI is growing day by day. Most of the foreign direct investment come from come from India and nearby countries.
Government Fees & Consultancy fees
Government annual fee is SLRs 60,000 to renew licensing and return filing. The consultancy fee for company registration in Sri Lanka is not fixed but approximately SLR 120,000 to SLRs 200,000 which varies upon types of business and investment capital.
At a glance of company registration in Sri Lanka
|Name approval time||1-2 days|
|Form you need to fill||Form 1, 18 and form 19|
|What is form 1?||About Company registration information|
|What is form 18?||Certificate of the directors|
|Memorandum & Article of Association||As Company Act- 2007 under 7|
|Paper advertisement||Placing information, contact number, parent company place and must publish in one English newspaper including local language newspaper.|
|Government Fees||SLRs 15,000 (approximately)|
|Consultancy fees||US $ 800, 1000 and 1200 as nature of business|
|company registration duration||10 days max|
|Corporate tax rate||35 %|
Company Registration in Sri Lanka
As process of company registration in Sri Lanka, at first physical office has to have that will be addressed and published in newspapers. In that case, virtual office rent (only address rent) is not allowed.
- Those investors who wish to register their company in Sri Lanka must follow the Company Act No. 07 of 2007 which is necessary to get a business name reservation as first step of company formation.
- Investors provide public notice of its incorporation specifying the name and company number of the company and the address of the company’s registered office within thirty working days of its incorporation under this Act in Sri Lanka.
- At least one issue of the Gazette and one issue of a daily newspaper in the Sinhala, Tamiland English (three papers) languages, circulating in the area should be given in the public notice which represents the place of business of the company.
Steps of online registration
- After receiving name approval other documents as Form no. 1, Form 18, Form 19 and Memorandum & Article of Association have to be printed;
- All documents have to submit to the counter of Registrar Office with registration fees of Rs nineteen thousand nine hundred eighty and VAT;
- Within 30 working days of incorporation, a company shall publish in newspapers.
Note: As section 3 if companies do not violate limitation then BOI approval issue will not come in picture otherwise BOI approval is required for the foreign investors.
How to register a company in Sri Lanka
It’s required all
- Such companies cannot offer public share.
- As membership limitation maximum fifty shareholders are allowed as
privatelimited company in Sri Lanka.
Joint Venture Company Registration in Sri Lanka
Branch Office open in Sri Lanka
Income Tax Sri Lanka
New company registration fees in Sri Lanka
Company registration fees in Sri Lanka is given as chart
|As Form 1||Rs. 15,000 (Government fees)|
|For, Form 18||Rs. 1000 (Government fees)|
|For, Form 19||Rs. 1000 (Government fees)|
|For, article of association||Rs. 1000, (Government fees)|
Note: Fifteen percent VAT will be applicable on all above fees.
Company registration fees in Sri Lanka as package
|Company registration fees category “A”||Rupees 120,000 to 200,000 (for small size company).|
|Company registration fees category “B”||Rupees 120,000 to 250,000 (for medium size company).|
|Company registration fees category “C”||Rupees 120,000 to 300,000 or above (for big size company).|
Company registration pros and cons in Sri Lanka as foreign investors:-
Who is the authority (government body) of company registration in Sri Lanka?
Answer: Registrar of Company, Sri Lanka;
Who is the authority (government body) of export/ import business in Sri Lanka?
Answer: Export and import control, Sri Lanka
Who is the authority (government body) of visa, business set up tax free zone in Sri Lanka?
Answer: BOI (Board of Investment, Sri Lanka
Who is authorized person to apply for company formation in Sri Lanka?
Answer: Company Secretary, license secretary who is professional and have experience on this field
Can a foreigner start export/ import business in Sri Lanka?
Answer: Yes, they can start same business.
Related information is as follows
- You may know information
ofwork permit requirement in Sri Lanka as foreign investors.
- Required business License in Sri Lanka to start a business.
- Find the process of income tax return
- Do/ Do NOT
startinga business in Sri Lanka.
- Business registration fees in Sri Lanka (Private limited, Branch office).
- Find Foreign Direct Investment (FDI) opportunity in Sri Lanka.
- Do you like to know how to start a business in Sri Lanka as