Sri Lanka - Establishing an OfficeSri Lanka - Establishing an Office
Potential investors should initiate discussions with the Board of Investment (BOI) prior to establishing a company or a liaison office in Sri Lanka. One-hundred-percent foreign ownership is allowed with certain exceptions. The list of the regulated areas where foreign ownership is limited or requires approval of the statutory agencies can be obtained at www.boi.lk.
A foreign company registered under the Companies Act of 2007 may carry on business in Sri Lanka as a branch, project, liaison or a representative office subject to the terms and conditions published in the Foreign Exchange Regulations Gazette 1 of 2017.
The Inland Revenue Act of 2017, implemented April 1, 2018, includes concessionary corporate tax rates for investments in specific sectors and capital allowances (depreciation) on capital investments. The BOI Act provides for two types of investment approvals, one allowing concessions and the other without concessions.
Following BOI approval, the investor is required to form a limited liability company. Companies must register with the Department of Registrar of Companies. The proposed name of the company must be approved by the Registrar of Companies. Searching for a unique company name can be done online at www.drc.gov.lk. The application for registration should be accompanied by Articles of Association, consent from initial directors and general secretaries (Form 18 and Form 19), and the application in the prescribed form (Form 1). Companies approved under section 17 of the BOI law are required to include a primary objective approved by the BOI in the Articles of Association. The registration fee is approximately $100. The application forms can be downloaded from www.drc.gov.lk. According to Article 2 of the Companies Act of 2007, every company must have a Company Secretary. Companies need to give public notice of incorporation through the government gazette and newspaper advertisements and register with the Inland Revenue Department and the Department of Labor. A foreign company such as a liaison office or a representative office needs to remit funds required for the setting up and maintenance through an Inward Investment Account (IIA.)
A foreign company can set up a branch office under the same name. The following documents need to be submitted for review: a certified copy of the charter, statute or memorandum, and articles of association of the company, a certified copy of the incorporation of the company, a list of directors, a statement containing the full address of the registered or principal office of the company and principal place of business within Sri Lanka, a valid power of attorney authorizing a resident in Sri Lanka to act on behalf of the company, and a certified extract of a resolution of the shareholders confirming the activities of the branch office. A foreign branch office, project office or a similar office needs to invest a minimum of USD 200,000 or equivalent, out of remittances channeled through an Inward Investment Account (IIA.) The registration fee for registering a branch office is approximately $370.
Once the documents are in order, registration of a new company takes approximately three days. Registration of a branch office takes two to four weeks.
For more information contact the Registrar of Companies, "Samagam Medura," 400 D.R. Wijewardane Mawatha, Colombo 10, Phone: 94-11-268-9212; Fax: 94-11-268-9211. Email: registrar@drc.gov.lk Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
A foreign company registered under the Companies Act of 2007 may carry on business in Sri Lanka as a branch, project, liaison or a representative office subject to the terms and conditions published in the Foreign Exchange Regulations Gazette 1 of 2017.
The Inland Revenue Act of 2017, implemented April 1, 2018, includes concessionary corporate tax rates for investments in specific sectors and capital allowances (depreciation) on capital investments. The BOI Act provides for two types of investment approvals, one allowing concessions and the other without concessions.
Following BOI approval, the investor is required to form a limited liability company. Companies must register with the Department of Registrar of Companies. The proposed name of the company must be approved by the Registrar of Companies. Searching for a unique company name can be done online at www.drc.gov.lk. The application for registration should be accompanied by Articles of Association, consent from initial directors and general secretaries (Form 18 and Form 19), and the application in the prescribed form (Form 1). Companies approved under section 17 of the BOI law are required to include a primary objective approved by the BOI in the Articles of Association. The registration fee is approximately $100. The application forms can be downloaded from www.drc.gov.lk. According to Article 2 of the Companies Act of 2007, every company must have a Company Secretary. Companies need to give public notice of incorporation through the government gazette and newspaper advertisements and register with the Inland Revenue Department and the Department of Labor. A foreign company such as a liaison office or a representative office needs to remit funds required for the setting up and maintenance through an Inward Investment Account (IIA.)
A foreign company can set up a branch office under the same name. The following documents need to be submitted for review: a certified copy of the charter, statute or memorandum, and articles of association of the company, a certified copy of the incorporation of the company, a list of directors, a statement containing the full address of the registered or principal office of the company and principal place of business within Sri Lanka, a valid power of attorney authorizing a resident in Sri Lanka to act on behalf of the company, and a certified extract of a resolution of the shareholders confirming the activities of the branch office. A foreign branch office, project office or a similar office needs to invest a minimum of USD 200,000 or equivalent, out of remittances channeled through an Inward Investment Account (IIA.) The registration fee for registering a branch office is approximately $370.
Once the documents are in order, registration of a new company takes approximately three days. Registration of a branch office takes two to four weeks.
For more information contact the Registrar of Companies, "Samagam Medura," 400 D.R. Wijewardane Mawatha, Colombo 10, Phone: 94-11-268-9212; Fax: 94-11-268-9211. Email: registrar@drc.gov.lk Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.