Company Registration in Sri Lanka. Service offer

The company registration procedure in Sri Lanka includes the following steps:

1. Check the proposed company name with the Registrar

It is necessary to obtain approval for the use of the name (by submitting Name search form – A16; you may also be requested to provide more information about the name, what the abbreviation stands for, etc.).

If the name is approved, an Approval Number is issued to the company.

A name can be reserved for 3 months from the application date.

2. Prepare the Articles of Association and enter the details of the company, directors, shareholders and secretary

It is necessary to submit forms (Forms No. 1, 18, and 19) together with two copies of the Articles of Association, which Articles must include a full and detailed description of the company’s activity and details of all its members.

3. Pay government fees

4. Obtain a Certificate of Incorporation

5. Publish a notice in the Gazette

The company is required within 30 working days of incorporation to make publications in the official government Gazette, which is published in three languages – Sinhala, Tamil, and English, stating the name of the company, registered office address, place of business, etc.

6. Obtain a Board of Investment (BOI) approval – for companies with foreign investors

There are cases where companies with a foreign investor can be incorporated without such approval.

*To find out whether your company will need a Board of Investment approval, please contact a GSL Law & Consulting consultant.

7. Register with the Inland Revenue Department and obtain a Tax Identification Number (TIN)

For registration purposes, it is necessary to fill in Form C152 for the assignment of a TIN.

8. Register for Value Added Tax (VAT)

The registration for VAT (if required) is performed by the Inland Revenue Department. The VAT number is allocated on the basis of the assigned TIN.

9. Pay Stamp Duty

Stamp duty is levied on financial instruments, real estate, and other transactions prescribed by the Stamp Duty Act, and upon issue of shares.

10. Register with the Department of Labor and obtain an EPF number

Once the company is formed it is needed to register for Employees’ Provident Fund and Employees’ Trust Fund.

The Employees’ Provident Fund / EPF was established under the EPF Act, No. 15 of 1958. The aim of the EPF is to assure financial stability of the employees in their retirement. According to the EPF Act, an employee is required to contribute a minimum of 8% and the employer a minimum of 12%, of the total earning of the employee’s monthly salary.

The Employees’ Trust Fund Board / ETF Board was established under the Act No. 46 of 1980. All private sector employees are members of this Fund while their employers are required to remit 3% of the gross earnings of their employees to the Fund, monthly. Hence, unlike the EPF, only the employer makes a contribution on behalf of the employee/member.

No separate registration is needed to register with the ETF, to be able to pay contributions. Contributions to the ETF are made using the EPF number.

The standard rate of corporate income tax in Sri Lanka is 30%.

But there are concessions, for example:

• supply of services to exporters of goods or to a foreign principal of such exporters directly is taxed at a reduced rate of 12%;
• if the taxable income of a company, other than the holding company, a subsidiary company or an associate company of a group, does not exceed LKR 5 000 000 (~ USD 17 200), the tax rate is 12%.

Foreign companies are taxed at the same tax rate as local companies.

The standard VAT rate is 18% (as from 2024), but there are also exemptions that reduce the rate to 0% (e.g. for direct exports of goods and some services).

A company may take a loan from non-residents and the interest on the loan paid to non-residents will be exempt from Sri Lankan withholding tax.

In addition, Sri Lanka has remittance tax: 1/3 of the amount remitted abroad.

There is also tax on imports chargeable at the rate of 12.5%.

• a company is required to keep accounting records so that its financial position can be determined at any time;
• a company is required to annually file an Annual Return with the Registrar of Companies;
• a company is required to prepare audited financial statements and file them with the Inland Revenue Department once it starts doing business.

Company incorporation

Annual maintenance (starting from the second year)

Additional services

Compliance fee

[1] The fees are valid as of January 2024.