Sri Lanka, with its dynamic business environment, offers exciting opportunities for foreign entrepreneurs. Establishing a business in this vibrant market requires understanding the registration process thoroughly. Here’s a step-by-step guide to help you navigate the Sri Lanka company registration process smoothly and efficiently.

Key Considerations for Foreign Entrepreneurs

Before diving into the company registration steps, there are crucial factors to consider:

• Local Company Secretary: It’s mandatory to appoint a local company secretary. This individual will help you navigate the regulatory requirements and ensure compliance with local laws. Choose a qualified professional or firm that provides comprehensive support.

Understanding the Rules and Restrictions

1. Restricted Industries: Some sectors are reserved exclusively for Sri Lankan nationals. These include money lending, pawnbroking, coastal fishing, and security services. Retail trade is restricted if the investment is below USD 5 million.

2. Foreign Ownership Limits: Foreign ownership is restricted in certain industries to 40% or less. These include shipping, travel and tourism, mass communication, freight forwarding, and processing industries such as tea, rubber, and sugar.

3. 100% Foreign Ownership: In sectors like software development, hotels, BPO services, and business consultancy, 100% foreign ownership is permitted.

4. Approval Requirements: Some businesses may need special approvals from the relevant Line Ministry for sectors like large-scale mining or lottery operations. The required approvals depend on the discretion of the ministry.

5. Board of Investment (BOI) Permission: Businesses involved in manufacturing, retail, or branch offices may need approval from the Board of Investment (BOI). Ensure you check if your business falls under BOI’s jurisdiction.

Step-by-Step Registration Process

1. Secure a Unique Company Name

   • Search and Verify: Visit the Department of Registrar of Companies’ website to ensure your desired company name is not already in use.
   • Prepare Alternatives: Have at least four unique names ready to avoid rejection due to similarity with existing names.

2. Complete the Required Forms

   • Form 1: Provide details about the company name, registered address, number of directors, and share information.
   • Form 18: Include director details and appointment dates.
   • Form 19: Provide information about the company and the company secretary.

3. Draft the Articles of Association

   • Understand Regulations: These documents govern your company’s operations under the Company Act No. 7 of 2007.
   • Seek Expert Advice: Consult with professionals to ensure compliance with legal requirements and to address any administrative issues.

4. Public Notice and Open a Bank Account

   • Public Notice: Publish a notice in at least three Sri Lankan newspapers. The notice should include your company’s name, address, and registration number.
   • Corporate Bank Account: Open a bank account in the company’s name to facilitate financial transactions and obtain a chequebook and Internet banking services.

Final Tips

To ensure a smooth registration process, conduct thorough research and seek guidance from legal and financial experts familiar with Sri Lankan regulations. Being well-prepared and informed will help you navigate the complexities of setting up a business in Sri Lanka and position your venture for success in this promising market.

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