Updates From The Registrar Of Companies (ROC)

Though there were no minimum capital requirements for companies registered by foreign shareholders in Sri Lanka there had been such requirements under certain categories eg Banks, Insurance Companies, Companies engaging in retail trade in Sri Lanka, Companies registered with the BOI or Branches of foreign registered companies. However, a letter dated 11th of March 2021 addressed to the Registrar of Companies from the President’s Office required the Registrar of Companies to obtain clearance from the Board of Investment of Sri Lanka before incorporating Foreigner owned Companies. 

The Registrar of Companies through a notice on the 26th of October 2021 published in their website announced that the Ministry of Finance is proposing to amend the Foreign Exchange Regulations: (Regulations No 2 of 2021 issued under the Foreign Exchange Act No 12 of 2017) to require a minimum investment of US$ 50,000 for companies incorporated with foreign shareholding in Sri Lanka. Tech start-ups IT/TES and BPM businesses and companies to which industry-specific limitations /restrictions are applicable under the above regulations were exempted. 

As an interim measure till the proposed amendments were made the Company Secretaries were expected to provide proof of remittance of this minimum capital through an Inward Investment Account (IIA Account). This was done by uploading a bank confirmation into the EROC system. Only on submission of the bank confirmation the company would be incorporated and incorporation documents issued. 

However around March 2022, this notice on the ROC website was removed, and currently, there is no minimum investment threshold for companies with foreign shareholding. Therefore, foreign shareholders could now incorporate companies without remitting any minimum capital requirements.