Register a Business in Sri Lanka: A Complete Guide for 2025
Sri Lanka offers a strategic gateway to South Asia, boasting investor-friendly policies, a skilled workforce, and a streamlined company registration process. Whether you're a local entrepreneur or a foreign investor, understanding the steps to register a business in Sri Lanka is crucial for a successful venture.
✅ 1. Strategic Geographic Location
Situated at the crossroads of major shipping routes in the Indian Ocean, Sri Lanka offers direct access to South Asian, Middle Eastern, and Southeast Asian markets. This makes it an ideal hub for logistics, manufacturing, and trade.
✅ 2. Investor-Friendly Government Policies
The government of Sri Lanka actively promotes foreign direct investment (FDI) through tax incentives, BOI-approved projects, and simplified procedures to register a business in Sri Lanka. New reforms have made it easier than ever to incorporate a company online via the eROC system.
✅ 4. Free Trade Agreements (FTAs)
Sri Lanka enjoys preferential market access through several FTAs with countries like India, Pakistan, and Singapore, as well as GSP+ privileges with the EU. This opens up massive export opportunities for businesses registered in Sri Lanka.
✅ 6. No Restrictions on Repatriation
Foreign investors can remit dividends, profits, and capital gains freely in foreign currency—making Sri Lanka an attractive location for international entrepreneurs looking to register a business in Sri Lanka with ease of exit.
Main advantages of registering a business in Sri Lanka
Requirements to Register a Business in Sri Lanka
1. Company Name Reservation
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You must reserve a unique company name through the Department of Registrar of Companies (ROC) using Form A16.
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Names should not be identical or similar to existing entities listed in the Sri Lanka company register.
2. Minimum Number of Directors and Shareholders
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At least one director and one shareholder are required.
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Directors and shareholders can be individuals or corporate entities.
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There are no residency or nationality restrictions, allowing full foreign ownership in most sectors.
3. Registered address in Sri Lanka
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Every business must have a physical registered office address in Sri Lanka where official communications can be received.
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This address will be listed on the company registration certificate.
4. Legal Documents
You’ll need to prepare and submit the following:
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Form 1 – Company Registration form
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Form 18 – Consent and Certificate of the Director
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Form 19 – Consent and Certificate of the Secretary
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Articles of Association – Standard or customized
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Copies of valid ID or passport of directors/shareholders
5. Share Capital
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No official minimum capital requirement.
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It is recommended to declare a reasonable amount of authorized and issued share capital during incorporation.
6. Tax Identification Number (TIN)
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Once the company is incorporated, apply for a TIN at the Inland Revenue Department.
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A TIN is required to operate legally and file taxes.
Key Legal Requirements (Summary)
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Most of these steps can be completed online or remotely with the help of a professional service provider such as Consultrio, making it easier than ever to register a company in Sri Lanka from abroad.
Sri Lanka Company Registration Cost
Company Name Reservation
Set of Corporate Documents
Company Registration
Registered Address in Sri Lanka
Whats included in essential
Priority Support
Local Bank Account
Tax and VAT registration
1. Private Limited Company (Pvt Ltd)
The most popular and flexible option for both local and foreign entrepreneurs to register a business in Sri Lanka.
Key Advantages of Sri Lanka Pvt Ltd Structure:
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Separate legal identity from owners.
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Limited liability for shareholders.
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Minimum 1 director and 1 shareholder.
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Foreign ownership is allowed.
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High credibility with clients and banks.
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Can raise capital through private investment.
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Ideal for startups, SMEs, and foreign-owned entities.
2. Public Limited Company (PLC)
Designed for larger businesses planning to raise capital from the public.
Key Features:
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Can issue shares to the public.
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Requires a minimum of 7 shareholders and 2 directors.
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Subject to higher compliance under Sri Lanka’s Companies Act.
Advantages:
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Access to public capital markets.
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Enhanced corporate visibility and credibility.
3. Sole Proprietorship
A simple structure for individual entrepreneurs offering full control.
Key Features:
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Owned and operated by one person.
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Easy and inexpensive to set up.
Advantages:
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Minimal compliance.
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Full control over decision-making.
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Low setup and operational costs.
4. Overseas Company / Branch Office
For foreign entities wanting to establish a business presence in Sri Lanka without full incorporation.
Key Features:
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Must register with the Registrar of Companies.
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Must appoint a local authorized representative.
Advantages:
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Easier market entry for testing or limited operations.
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Not a separate legal entity—parent company retains full liability.
Tax System in Sri Lanka: What Businesses Need to Know
When you register a business in Sri Lanka, understanding the local tax regime is crucial for compliance and financial planning. Sri Lanka offers a relatively straightforward tax structure for companies, with special incentives for certain industries and exporters.
1. Corporate Income Tax (CIT)
The standard corporate tax rate in Sri Lanka is:
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30% – General corporate income tax rate.
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Reduced Rates:
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14% for small and medium enterprises (SMEs).
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14% for exports of goods and services.
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18% for manufacturing businesses.
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Note: Newly registered businesses that fall under strategic sectors may qualify for additional tax incentives.
2. Value Added Tax (VAT)
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Standard Rate: 18%
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Registration Threshold: Mandatory VAT registration if turnover exceeds LKR 3 million per quarter.
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Applies to both goods and services, especially for businesses engaged in trading, manufacturing, or professional services.
3. Withholding Tax (WHT)
Withholding tax is applicable on certain payments such as:
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Dividends: 14%
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Interest: 5% – 15%
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Rent, royalties, and service fees to non-residents
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It is the responsibility of the paying party (often the business) to withhold and remit this tax to the Inland Revenue Department.
4. Personal Income Tax (for Directors/Employees)
Withholding tax is applicable on certain payments such as:
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Dividends: 14%
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Interest: 5% – 15%
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Rent, royalties, and service fees to non-residents
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It is the responsibility of the paying party (often the business) to withhold and remit this tax to the Inland Revenue Department.
5. Tax Incentives & BOI Privileges
If you register a company under the Board of Investment (BOI) of Sri Lanka, you may benefit from:
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Tax holidays (up to 5–10 years depending on the project).
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Duty-free imports for capital goods.
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Exemptions from dividend tax for BOI-approved companies.
Sri Lanka Business Registration Process
01
Business Name Reservation
Our team begins with reserving and searching your company name in Sri Lanka Company Registry . Ensuring your chosen name is unique and compliant is crucial. This helps avoid conflicts and aids in smooth company in registration in Bermuda.
02
Application form and Submission to Registrar (3-4 days)
Next, we prepare and file all necessary documentation. This includes creating the Memorandum and Articles of Association. These documents lay the foundation for your company's structure.
03
Approval and Issuance
Once the application meets all requirements set by Sri Lanka Companies Registry, your corporate documents will be issued shortly.
04
Bank Account Opening
We assist in opening offshore bank accounts tailored to your international business needs for your Sri Lanka Company.
05
Ongoing Support
From regulatory compliance to operational guidance, Consultrio remains your trusted partner for continuous business support. Ongoing obligations and compliance should be understood. Keeping the company in good standing requires meeting these obligations. Awareness of these responsibilities is critical to avoid penalties.
