Sri Lanka is an excellent choice among many South Asian countries in terms of establishing a foreign-owned company. This is one of the countries which have well documented and establishing procedures for registering a business.
The economy of this country has dramatically increased in the last few years; this is why more foreign investors are willing to start a business there.
However, most of the foreign investors don’t know the procedure of setting up business in the country.
Therefore, to help them understand the registration procedure, this article is going to guide them from start to end on –how to register a company in Sri Lanka.
Company Name Approval
Company name registration is the 1st steps of registering a company in Sri Lanka. The searching of the company name can be done on the website of “Department of the Registrar of Companies.”
We recommend to select at least four unique names of your business; this will reduce the chance of name cancellation. Remember the company name will not be approved if it found to be similar to another existing company.
You need to fill the company name registration FORM-A16 with appropriate information and submit it to the Register of Companies. If everything is all right, it will take around three business class days for company name approval.
Company Registration Forms
Once the company name is approved, you need to submit FORM-1,18 and 19. All the FORMS needs to be printed (section 475).
The registration of companies will not allow any hand-written FORMS. The table below shows the required information that you need to fill up above forms–
|Form 1||Section 4(1) of Companies Act No. 7 of 2007 (“the Act”)||No. of Company Types of Company Name of proposed company Registered address Name approval number Directors information (including passport details) Number of shares (signature of shareholders)|
|Form 18||Section 203 of the Companies Act No. 7 of 2007||No. of Company Company Name Name of Director, Occupation Resident Address Passport number, date of appointment email address, phone number|
|Form 19||Section 221(2) of the Companies Act No. 7 of 2007|| No. of Company Company Name, |
Articles of Association
Every company in Sri Lanka should be governed by the rules and regulation of articles under Company Act 7 of 2007.
As Company Act 7 of 2007, the private limited company shall follow the rules and policy of– how to register a company in Sri Lanka:
- Private limited company shall not offer public sharing.
- Number of partners shall be limited to fifty
More information on article of association can be found on– The Department of Register of Companies.
Once everything is done with company registration, now it’s time to give public notice. Public notice shall be published within 30 (thirty) days of company registration.
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.
Its very easy to open a bank account in any local bank as all of them are friendly. Though Foreign banks create some issues, but it’s not very complex to open an account.
However, no credit/debit card are given by banks, only cheque and internet banking facilities are open for the foreigners. It takes around 5 to 7 days to open a corporate bank account.
Not all business needs BOI approval to conduct their business. However, some business needs. Board of Investment (BOI) approval is not required if the company is private limited and have no intention to hire foreign staffs.
Companies like manufacture, retail, branch office, etc. required permission from BOI. It takes around USD 5 million to obtain Board of Investment (BOI) approval.
For obtaining BOI approval, the client is instructed in each legal aspect of the projects, with the following—
- The client needs to have initial discussion with the official of BOI about the project’s proposal, investment value, target and employment.
- The client needs to prepare an application for the approval of the BIO.
- Client must open a corporate Bank account
- In order to carry out the project, coordination and liaison with the BIO is necessary.
- You must conduct the name check of the companies with the “Registrar of Companies”
- Get the approval of the “Article of Association” by the legal department depart of board of Investments.
- The issue of shares and share certificate.
Required Documents to Be Forwarded
- Fill up article of association in English language
- Input the list of the directors of the company
- Authorized person’s name and address of company who will deal registration procedure.
- Clearly mention address of the company and principal name of company.
Required Investment Capital for Business in Sri Lanka
According to the law of Sri Lanka, no foreigners can incorporate a retail business. However foreign investors are allowed to start a wholesale business if they deposit at least US $ one million in Sri Lankan Bank account. Besides, BOI permission might be required.
You must deposit $ 200000 to set up a branch office or any parent company in the country. To register a branch office, you need the following documents– certified company registration papers, income tax documents, audited accounts directors’ consent & business activities.
Company Registration Cost
It takes around SLR 120,000 for company registration which includes company name approval, incorporation, board meeting resolution, 1-year secretary service, and business address use.
You need to pay us 50% in advance and rest of payment after company incorporation. You can also contact us for office rent; we can provide a ready office within SLR 25 thousand. The customer can use as a corporate office and can hold any business meeting.
Frequently Asked Question
Q: How much times it takes to obtain company name approval?
- It takes around three days to obtain company name approval.
Q: How many directors are needed to incorporate a private limited company?
- You can incorporate your business with one director, but we recommend at least two.
Q: Is it mandatory to use local address to register a business Sri Lanka?
- According to the law of Sri Lanka, it is mandatory to use local address to register a business.
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