How to register a business in Sri Lanka?
Starting up a business in Sri Lanka is a simple and straightforward process. Be it as a local or a foreigner, you can register your business in Sri Lanka in a few simple steps. You need to complete all of the necessary documents and legal procedures in order to start your venture. Here you can find out all of the steps that you need to compete in order to establish a business in Sri Lanka. It covers everything from registering the business to building a website and promoting.
Business registration procedure
There are several types of business registrations in Sri Lanka. Each type has a set of procedures that need to be followed in order to be registered.
Sole proprietorship business registration in Sri Lanka - Local
If the business is conducted under a name other than the owner’s full name, then it needs to be registered. This can be done by filling out an application form that can be collected from the Divisional Secretariat Office. The respective Provincial Council Registrar is responsible for authorizing the business name. This application form for business name registration should be submitted within 14 days of starting the sole proprietorship.
Here is a list of what you need to do for sole proprietorship business registration in Sri Lanka.
- Obtain an application form to register the business name from the Divisional Secretariat Office.
- Obtain a certified report from the Grama Niladharee with regard to the business name registration.
- Hand over the above forms along with the registration fee, determined by the respective Provincial Council, to the Divisional Secretary.
- Provided the above forms are filled completely and approved, the Divisional Secretary will issue a certificate of business name registration which you need to display at the business location.
Sole proprietorship business registration in Sri Lanka - Foreign
Business registration in Sri Lanka is also possible as a foreigner. It is a simple and straight-forward process. Here is what is required to establish a sole proprietorship business in Sri Lanka as a foreigner.
- A proper name for the business and a place to operate the business in Sri Lanka are both necessary initially. Check the availability of the company name by visiting the website of the Department of the Registrar of Companies (DRC).
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Next, the below documents need to be submitted to the Registrar of Companies.
- A certified copy of the memorandum and articles of association. This needs to include the scope of the operations conducted by the business.
- Information on the main office of the company and the place of business operation in Sri Lanka.
- Name list of Sri Lankan residents who are authorized to accept service related documents for the company.
- Copies of documents with proof of the incorporation of the company. These copies should be certified of recent date.
Document verification can be done via the e-registration component (eRoC) of the DRC website.
The initial investment for a foreign company to carry out operations in Sri Lanka, is USD 2000,000. The payment should be made via a “Securities Investment Account” (SIA) opened in any one of the commercial banks in Sri Lanka. These funds need to be recorded and maintained until the business operates in the country. Evidence of this needs to be submitted to the Registrar of Companies within a period of 30 days after registration.
Partnership business registration in Sri Lanka - Local
Here are the steps that you need to follow for a partnership business registration in Sri Lanka.
- Obtain an application form to register the business name from the Divisional Secretariat Office.
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Submit the following documents along with the above application.
- A copy of the National Identity Card (NIC)
- A copy of the deed of the land the business is operated from (if the land is owned by you)
- Lease agreement (if it is a rented land)
- Trade permit (This can be obtained from the Municipal Council or divisional council that is nearest to the business location)
- A copy of the business partnership agreement
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Obtain a certified report from the Grama Niladharee of the division where the business place is located. You need to submit the following documents to the Grama Niladharee in order to obtain this report.
- Deed of the land if the business is run in your own house.
- Letter of consent if the land is owned by another.
- Lease agreement under your name if you are running the business in a rented building.
- Submit all of the above documents to the Divisional Secretariat Office.
Partnership business registration in Sri Lanka - Foreign
Business registration in Sri Lanka as a partnership is also possible for foreigners. The following a list of the necessary documents and information to carry out this procedure.
- There needs to be a proper name for the business and also a place to operate the business in Sri Lanka. Check the availability of the company name by visiting the website of the DRC.
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Next, the following documents need to be submitted to the Registrar of Companies.
- A certified copy of the memorandum and articles of association. This needs to include the scope of the business operations conducted by the company.
- Information on the main office of the company and the place of business operation in Sri Lanka.
- List of partners
- Name list of Sri Lankan residents who are authorized to accept service related documents for the company.
- Copies of documents with proof of the incorporation of the company. These copies should be certified of recent date.
Document verification can be done via the e-registration component (eRoC) of the DRC website.
The initial investment for a foreign company to carry out operations in Sri Lanka, is USD 2000,000. The payment should be made via a “Securities Investment Account” (SIA) opened in any one of the commercial banks in Sri Lanka. These funds need to be recorded and maintained until the business operates in the country. Evidence of this needs to be submitted to the Registrar of Companies within a period of 30 days after registration.
Private Limited Company business registration in Sri Lanka - Local
Here is how to do a Private Limited business registration in Sri Lanka.
- Obtain approval for the business name. Find a unique name for the business. This can be done by searching the website of the DRC, which will show if the name has been taken. Reserve the name with the Registrar of Companies. The reservation is valid for 3 months and costs Rs. 2,000 + 8% VAT.
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Submit the following forms to the DRC. (Should be printed or typewritten and not handwritten)
- Form 1 – Company Registration Form (R. 4,000 + 8% VAT)
- Form 18 – Consent and Certificate of Director (Rs. 2,000 + 8% VAT)
- Form 19 – Consent and Certificate of Secretary (Rs. 2,000 + 8% VAT)
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Submit Articles of Association in either way as given below. Two copies of these documents should be submitted. (Rs. 2,000 + 8% VAT)
- Adopt the standard set of Articles of Association in Table A of the Companies Act of Sri Lanka.
- Draft Articles of Association of its own.
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Give public notice of company incorporation. It has to be published on at least one issue of a gazette and at least one issue of a local newspaper in all three languages. The notice should include the following details.
- Registration number of the company
- Name of the company
- Registered address of the company
Once all of the above steps are completed the business registrations certificate will be given within a period of two to three weeks.
Private Limited Company business registration in Sri Lanka - Foreign
A private limited company business registration in Sri Lanka is possible for an overseas company as well. With the correct information in hand, it is a very straight-forward process. Let’s look at what is required to establish an overseas company in Sri Lanka.
- First there needs to be a proper name for the business and also a place to operate the business in Sri Lanka. Check the availability of the company name by visiting the website of the DRC.
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Next, the following documents need to be submitted to the Registrar of Companies.
- A certified copy of the memorandum and articles of association. This needs to include the scope of the business operations conducted by the company.
- Information on the main office of the company and the place of business operation in Sri Lanka.
- List of company directors along with the number of shares.
- Name list of Sri Lankan residents who are authorized to accept service related documents for the company.
- Copies of documents with proof of the incorporation of the company. These copies should be certified of recent date.
Document verification can be done via the e-registration component (eRoC) of the DRC website.
The initial investment for a foreign company to carry out operations in Sri Lanka, is USD 2000,000. The payment should be made via a “Securities Investment Account” (SIA) opened in any one of the commercial banks in Sri Lanka. These funds need to be recorded and maintained until the business operates in the country. Evidence of this needs to be submitted to the Registrar of Companies within a period of 30 days after registration.
Once all documents are submitted, the registration process takes at least 21 days for a private limited company.
The following types of businesses are not permitted as foreign direct investment into companies.
- Pawn brokerage
- Money lending
- Coastal fishing
- Provision of security services
- Retail trade with a capital less than USD 1 Million. (With the exclusion of overseas companies that sells in bulk to distributors and not to the end customer.)
Once the company is registered, the next step in the process is to register as a tax payable company as per the Sri Lankan law. Let’s look into this process in detail.
Tax registration procedure
Every company in the country should obtain a Taxpayer Identification Number (TIN) from the Inland Revenue Department (IRD). Here is an overview of the process.
- Obtain a registration form from the IRD office. It can even be downloaded from the IRD website.
- Fill in the form and post/ hand over to the IRD office along with the required supporting documents. You can even upload online via the IRD website.
- Depending on how the form was submitted, the TIN certificate will be provided on the spot or by post.
Now that the company is registered for the purpose of paying taxes, it is time to start building up on the business online.
Create an online presence
Establishing a sound online presence is of utmost importance in this era. Here are the steps required for this.
- Get hosting and domain name from a web hosting company. An .lk or .com domain can be obtained for this purpose.
- Get a company-branded email address. This is preferred over a free email account as it is believed to be more credible.
- Design a website or outsource this part to a web design company in order to help promote the business online. A combination of good graphics and content is crucial along with the speed as it is essential for the website to load its pages fast.
Finally, advertising and promotional activities need to be done adequately to expand the customer base. Popular methods for this include advertising via Google AdWords and Facebook, email marketing, blog posts and Search Engine Optimization (SEO) etc.
These are basics steps in starting an online business in Sri Lanka. It is truly a simple and straightforward process which can be easily done with proper knowledge on the related procedures.