Establish your business in Sri Lanka

Incorporate your Business in Sri Lanka 

Incorporating a business in Sri Lanka involves several steps and requires compliance with the country’s legal and regulatory framework. Here is a general overview of how a business can be incorporated in Sri Lanka.

Choose a Business Structure

Decide on the type of business entity you want to establish. Common options include:

1. Sole Proprietorship
2. Partnership
3. Privet Limited Liability Company (LLC)
4. Public Limited Company (PLC)

Incorporating as a Company 

1. Name Reservation

Choose a unique name for your business and check its availability with the Registrar of Companies. Reserve the name if it is available.

2. Drafting the Articles of Association and Memorandum of Association

Prepare the Articles of Association and Memorandum of Association for your company. These documents outline the company’s objectives, structure, and rules.

3. Register with the Registrar of Companies:

Submit the required documents, including the Articles of Association and other incorporation forms, to the Registrar of Companies. You can find the necessary forms on the Department of Registrar of Companies website. Once pay the prescribed registration fees to the Registrar of Companies your registration process will be commenced. 

Obtain Necessary Approvals and Permits

Depending on the nature of your business, you may need to obtain specific permits or approvals from relevant government authorities. For example, if you plan to engage in certain regulated industries, such as banking or telecommunications, you will need approvals from the respective regulatory bodies.

Register for Taxes

Register your business for taxation with the Inland Revenue Department. You will need to obtain a Tax Identification Number (TIN) and comply with Sri Lanka’s tax regulations.

Open a Bank Account

Open a business bank account in the name of your company. You will need this account for financial transactions related to your business.

Comply with Employment Regulations

If you plan to hire employees, ensure that you comply with Sri Lanka’s labor laws and regulations regarding employment contracts, social security contributions, and employee benefits.

Business Licenses and Permits

Depending on your business activities, you may need additional licenses and permits from local authorities or sector-specific regulators.

Maintain Corporate Records

Maintain proper corporate records, including accounting books, minutes of meetings, and financial statements.

Annual Filings

Comply with the annual filing requirements by submitting annual financial statements and other required documents to the Registrar of Companies.

Compliance and Reporting

Be aware of and comply with all relevant laws and regulations pertaining to your business sector, including taxation, employment, and industry-specific regulations. It is advisable to consult with a local business consultant in Sri Lanka to navigate the specific requirements and regulations applicable to your business type and industry. The process and requirements may vary based on factors such as business size, location, and industry sector.

Incorporating a company Under BOI Law 

Incorporating a company in Sri Lanka under the Board of Investment (BOI) can be a relatively straightforward process. The BOI is the primary government agency responsible for promoting and facilitating foreign investments in Sri Lanka. Here are the general steps you need to follow to incorporate a BOI company in Sri Lanka:

1. Select Your Business Activity: Determine the nature of your business and the sector in which you intend to operate. Make sure your business activities align with the BOI’s investment priorities.
2. Eligibility Check: Ensure that your business meets the eligibility criteria for BOI approval. Generally, BOI promotes foreign investment and certain specific sectors, so your business plan should align with these criteria.
3. Reserve a Company Name: Choose a unique name for your company and check its availability with the Registrar of Companies. 
4. Appoint a Company Secretary: Appoint a qualified company secretary who is registered with the Registrar of Companies. 
5. Prepare the Articles of Association and Memorandum of Association: Draft the articles of association and memorandum of association for your company. These documents outline the company’s internal regulations and objectives.
6. Capital Investment: Determine the initial capital investment required for your business. The minimum capital requirements can vary depending on the sector and the size of your business. 
7. Open a Bank Account: Open a local bank account in the name of your company and deposit the required capital.
8. Apply for BOI Approval: Prepare a comprehensive business plan that outlines your investment, projected income, and employment generation. Submit your application for BOI approval along with the required documents. The BOI will review your application and may request additional information.
9. Obtain BOI Approval: Once your application is approved, you will receive a BOI Certificate. This certificate allows you to proceed with the company incorporation process.
10. Incorporate the Company: With the BOI Certificate in hand, you can now proceed with the company incorporation process. This includes submitting the necessary documents to the Registrar of Companies, such as the articles of association, memorandum of association, and other relevant forms. You’ll also need to pay the required registration fees.
11. Tax Registration: Register your company for tax purposes with the Inland Revenue Department and obtain a Tax Identification Number (TIN).
12. Obtain Other Permits and Licenses: Depending on your business activity, you may need additional permits and licenses from relevant authorities.
13. Employment Visas and Work Permits: If you plan to employ foreign workers, you’ll need to obtain employment visas and work permits for them.
14. Compliance with Labor Laws: Ensure that your company complies with Sri Lanka’s labor laws, including minimum wage and working hour regulations.
15. Post-Incorporation Requirements: After incorporation, you’ll need to fulfill ongoing compliance requirements, such as filing annual returns, financial statements, and tax returns.

It’s crucial to consult with advisors with expertise in Sri Lankan company law and BOI regulations to ensure compliance throughout the process. The specific requirements and regulations may change, so it’s essential to verify the most up-to-date information from the BOI and relevant government authorities during your company incorporation process.