Thinking about setting up shop in Sri Lanka? This guide will outline the process for foreign businesses looking to register a company in Sri Lanka as of March 2024.

Important Note: The information in this article is based on current regulations and may change. It’s recommended to consult the Department of Registrar of Companies (https://www.drc.gov.lk/) website for the latest updates.

Restricted Areas and Ownership Limitations

While Sri Lanka welcomes foreign investment, there are some restrictions to be aware of:

• Fully Reserved for Sri Lankans: Certain industries are off-limits to foreign ownership, including money lending, pawnbroking, coastal fishing, and retail trade (unless the investment exceeds $5 million USD).
• Limited Ownership (40% or Less): Foreign ownership is capped at 40% in industries such as shipping, travel, education, forestry, and processing of specific agricultural products (tea, cocoa, etc.).
• Ministry Approval Required: Large-scale mining, lotteries, certain manufacturing (e.g., firearms), and coastal shipping require special permission from the relevant ministry.

BOI Approvals

The Board of Investment (BOI) approval is not mandatory for all businesses. However, it’s necessary for operations in sectors like manufacturing, retail (above the $5 million threshold), and branch offices. To secure BOI approval, a minimum investment of $5 million USD is required.

The BOI approval process involves:

• Scheduling a meeting with the BOI to discuss your business goals.
• Submitting an application for approval.
• Opening a corporate bank account.
• Verifying company information with the Registrar of Companies.
• Obtaining approval for your Articles of Association.
• Providing a copy of the share certificate.

Company Name Approval

The first step is to get your desired company name approved by checking its availability on the Department of Registrar of Companies website. Having a few alternative names ready is recommended in case of conflicts.

Filling Out Registration Forms

Once your name is approved, you’ll need to complete the following forms:

• Form 1: Company details (type, address, directors)
• Form 18: Director information (names, appointment dates)
• Form 19: Company secretary details

Important: Handwritten forms are not accepted. All forms must be printed.

Articles of Association

The Articles of Association define your company’s rules and regulations. These govern changes to company name, directors, shareholders, and share capital, as outlined in the Companies Act No. 7 of 2007.

Public Notice and Bank Account

After successful registration, you must publish a public notice in at least three local newspapers. This notice should clearly state your company name, business type, location, and registration number.

Finally, open a corporate bank account for your business operations. This will allow you to access funds for running your business.

Congratulations! You’ve now successfully registered your foreign company in Sri Lanka.