Sri Lanka is a country with thriving corporate settings. The government has implemented policies that make it easier for businesses to register and operate in the country. Registering a company in Sri Lanka has several benefits, including access to a large and growing market, a skilled workforce, and a favorable tax regime.
One of the main benefits of registering a company in Sri Lanka is access to a large and growing market. The country has a population of over 21 million people, with a growing middle class that is increasingly interested in consumer goods and services. Another benefit of registering a company in Sri Lanka is access to a skilled workforce. Now that you are aware of the advantages of registering a business in Sri Lanka, it is time to look at the procedures involved in doing so.
Company registration process
The following are the main steps of company registration in the country.
Choose a unique name
When it comes to choosing a corporate name for filing in Sri Lanka, it is important to select a unique and memorable name that accurately represents your business. A good business name can help attract customers and create a strong brand identity. It is recommended to conduct a thorough search of existing corporate names and trademarks to ensure that your chosen name is available for registration.
Obtain a digital signature certificate
To obtain a digital signature certificate for company registration in Sri Lanka, you must first apply for one through a certified service provider. This certificate is necessary for digitally signing documents and transactions related to your corporate setup. It is important to ensure that your digital signature certificate is valid and up-to-date to avoid any delays or complications during the filing process.
Draft the articles of association
The Article of Association is a legal document that outlines the rules and regulations governing the internal affairs of the company. It must include the name of the company, the objectives of the company, the authorized share capital, the number of shares issued, and the rights and obligations of the shareholders. Once the Article of Association is drafted, it must be submitted along with other necessary documents such as the Memorandum of Association, Form 1, and Form 18 to the Registrar of Companies.
Pay the required fees
To register a business in Sri Lanka, you must submit the required capital in a corporate account and also submit the related fees. The required capital amount varies depending on the type of firm. For sole proprietorships and partnerships, the minimum capital requirement is LKR 50,000. For private limited companies, the minimum capital requirement is LKR 500,000. Additionally, other charges such as registration fees, stamp duty, and legal fees must be paid.
Registration fees for a sole proprietorship or partnership range from LKR 3,000 to LKR 10,000. Private limited companies have a higher registration fee of LKR 15,000. Stamp duty is calculated based on the amount of share capital and is usually around 1% of the capital amount. Legal fees for drafting the necessary documents and registering the firm can range from LKR 10,000 to LKR 50,000.
Obtain tax identification number
To start a corporation in Sri Lanka, it is essential to obtain a tax identification number (TIN). This number is used to identify the firm for tax purposes. To obtain a TIN, the corporate owner must apply to the Inland Revenue Department. The application must include the corporate registration certificate, identification documents of the corporate owner, and other relevant documents. Once the application is approved, the firm will receive a TIN, which must be used in all tax-related transactions.
Obtain permits
The permits required for business registration depend on the type of business being enlisted. For example, a restaurant will need a food service permit, while a construction company will need a building permit. The permits can be obtained from the relevant government agencies, such as the Ministry of Health and the Department of Buildings. It is important to ensure that all necessary permits are obtained before starting the business to avoid any legal issues.
