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Business Setup in Sri Lanka

Company Setup ---

Business Setup Services

Sri Lanka's prime position along key shipping routes in South Asia and the Far East, combined with a well-educated workforce, makes it an attractive destination for businesses seeking new market opportunities. The government further enhances this appeal with various incentives and preferential tax policies.

When it comes to establishing a foreign business in Sri Lanka, several options are available. Bingo can guide you through these choices, helping you select the most suitable entity for your needs. Our experienced representatives will then support you through every step of the setup process.
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Simplify your business establishment

Limited liability company

In Sri Lanka, the most popular entity for foreign investors is a limited liability company (LLC). Establishing an LLC requires at least one director and two shareholders, who can be of any nationality. However, a resident company secretary must be appointed, and a registered business address is necessary. Notably, there is no minimum share capital requirement for setting up an LLC in Sri Lanka.

Public company

To establish a public limited company in Sri Lanka, you need at least two shareholders and two directors. This type of company is appealing for foreign investors looking to raise capital locally, as public companies can be listed on the stock exchange. Before commencing operations, a business commencement certificate is required. Additionally, directors of public companies in Sri Lanka are obligated to file annual returns and submit annual audited accounts and financial statements. However, a resident company secretary must be appointed, and a registered business address is necessary. Notably, there is no minimum share capital requirement for setting up an LLC in Sri Lanka.

Offshore company

Foreign companies can register their presence in Sri Lanka. However, offshore companies are prohibited from conducting business activities within the country.

Subsidiary

A frequently chosen option for foreign investors in Sri Lanka is to establish a subsidiary. These subsidiaries must adhere to all the regulations applicable to local companies.

Joint venture

A joint venture involves a business collaboration between two or more companies. It can be formed with another foreign company or a local company in Sri Lanka. Joint ventures can either be incorporated or operate as unincorporated partnerships. These structures are especially favored in export-oriented businesses.

Branch office

Branch offices in Sri Lanka can be entirely foreign-owned. The parent company determines the scope of the branch office's operations. These branches have their own management team and corporate bank account in Sri Lanka. Registration with the Ministry of Finance and Planning is mandatory. Besides paying standard taxes, branch offices are subject to an additional 10% tax on profits remitted abroad to the parent company. The parent company is responsible for all liabilities of the branch office.

Representative office

Setting up a representative office in Sri Lanka is straightforward for activities with limited scope. However, such offices cannot engage in commercial operations, generate profit, or make direct sales in Sri Lanka. They are also prohibited from participating in trading or investment activities. Representative offices can be wholly foreign-owned but must appoint a resident company secretary. Due to their restricted activities, these offices are not subject to taxation.

Procedure for establishing a company in Sri Lanka

  • Obtaining approval for your name. We can search for a unique name for your company via the Department of the Registrar of Companies. Names that are too similar to existing company names or that violate regulations will not be approved. We can search for the availability of your preferred name with the Sri Lanka government. We can also help you obtain a related domain name.
  • Appointing a company secretary.  Sri Lanka law requires a local resident secretary to be appointed. The secretary must be appointed before incorporating the business because one of the forms that is necessary for incorporation is a secretary’s consent form. We can help appoint a suitable candidate for this position.
  • Registering an official address. You must have a local registered address to set up a business in Sri Lanka. We can register an address for you.
  • Prepare company registration forms.  There are certain statutory forms that you must prepare and submit to the Sri Lanka government.
  • Prepare articles of association.  You must prepare articles of association that comply with the local regulations. This document must include information about the scope of the company, rights and obligations of shareholders and management of the company. Alternatively, you can adopt the standard set of articles of association.
  • Submit documents.  We submit all relevant documents to the Department of Registrar of Companies. If any supplemental documents are required to incorporate your business, we can assist with these documents as well.
  • Provide public notice. Within 30 days of incorporating your business, you must provide a public notice of incorporation that is published in the Government Gazette and a daily newspaper. Your notice should state the name of your business, the registered address and your company number.
  • Open a corporate bank account.  Once your incorporation is complete, you can apply for a corporate bank account in Sri Lanka. We can help you determine which type of account is best suited for your business.
  • Register for tax liability. We can help you register and obtain a Tax Identification Number and register your business for Value Added Tax.
  • Pay stamp duty. You will need to pay a stamp duty to the Inland Revenue Department for each share of your business you issue. This must be completed within one month from your incorporation date.
  • Register for an EPF number. We can help your company register for an Employees Provident Fund number, which must be completed within 15 days of hiring your first employee.
  • Obtain necessary licenses. You may have additional licenses that you need to obtain, based upon the nature and location of your business. Horizons’ local experts can assist you with this process.
  • Obtain BOI approval. If your company requires BOI approval to conduct business, we can help you with this process.
  • Obtain SEC approval. If your business is a public company, we can help you register and receive approval from the SEC in Sri Lanka.

You will also need to submit various fees during several steps throughout this process.

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Bingo Technology: Your Trusted Partner

Receive expert guidance from our seasoned business consultants well-versed in all facets of business setup in the Sri Lanka. From registration and licensing to legal processes, we provide comprehensive assistance tailored to your needs. Schedule an appointment with us today to kickstart your entrepreneurial journey hassle-free!

Contact us via phone at +94 77 191 9032 or email us at Agency@bingotechnology.com

Get in touch with Bingo

Bingo is recognized as one of the top business consultants in Sri Lanka, offering reliable assistance for company setup services and corporate services. Their expertise spans across various aspects of business consulting, ensuring that clients receive comprehensive support throughout the process of establishing and managing their companies in Sri Lanka.

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