So how do you register a BOI company in Sri Lanka as a foreign individual or a company incorporated overseas? First, decide whether a section 16 or section 17 BOI company is appropriate for your foreign direct investment. Send in your BOI application with a project proposal, draft Articles of Association, and proof of foreign inward remittance to the BOI’s Investment Appraisal Committee. Once you receive preliminary approval, submit the BOI-approved Articles and incorporation forms to the Registrar of Companies (ROC) to register your foreign-owned company.
We had a client last month wanting to set up a branch office or subsidiary company in Sri Lanka for import and B2B sale. As with any foreign direct investment in Sri Lanka, this kind of fully foreign owned company set up had to go through Board of Investment of Sri Lanka. Government Gazette (Extraordinary) No. 2213/35 dated 03 February 2021 blocks 100% foreign ownership in retail trade unless the total foreign investment exceeds USD 5 million. But in this case, we clarified that the client company would be strictly B2B, no direct sales to consumers, so that retail trade restriction didn’t apply. Our Secretarial team guided the client on preparing detailed project proposal and draft Articles to be submitted with Section 16 BOI application for Investment Appraisal committee approval.
Below I will share the steps to register your BOI company in Sri Lanka.
1. Identify whether your project qualifies under Section 16 or 17 of the BOI Law
The first step to registering a BOI company in Sri Lanka is to determine whether your project falls under Section 16 or Section 17 of the BOI law. You can register a BOI company under Section 16 with a minimum investment of USD 250,000 to allow foreign shareholding up to 100% or to transfer or issue new shares in an existing non-BOI company to foreign investors. Projects that meet the minimum investment threshold of USD 3 million or more can register a company under Section 17 of the BOI law to be eligible for enhanced capital allowances and exemptions from Customs duties, PAL, and CESS.
2. Submit your BOI application
There are two different BOI applications, one for Section 16 and one for Section 17. Fill out the relevant application form and submit it with the appropriate fee to the Director (Investment) / Senior Deputy Director (Investment), Investment Department, Board of Investment of Sri Lanka, 24th Floor ,West Tower, World Trade Centre, Echelon Square, Colombo 01.
The application can be submitted either by a shareholder of the proposed BOI company or by a representative who holds a letter of authority from a shareholder.
In your application, you’ll need to provide detailed investor profiles, including each investor’s name, address, citizenship, NIC or passport number, contact details, and proposed equity contribution both in USD and as a percentage. If there are more than two investors, you can include the additional details on a separate sheet.
The project profile section should clearly describe the type of venture—whether it’s a new company, an expansion, a foreign or local entity, or a joint venture. For Section 16 companies, specify if it’s a new company or involves issuing/transferring shares of an existing company. The Section 16 application must be filed according to either Part 3 or Part 4 of the schedule attached to the application form. Also include the project location address and land ownership details, specifying whether it’s private or state-owned land; if state-owned, mention the responsible agency. If you plan to bring foreign expatriates, indicate the number of foreign and local employees expected.
If your project involves remittable liabilities like royalties or technical service fees, you’ll need to explain how these are calculated, whether based on turnover, net sales, or another method, and when payments will be made (monthly, quarterly, annually, etc.).
Your project implementation programme should outline the timeline from BOI approval, how many months it will take to begin construction or financing, and when you expect to start commercial operations. This helps the BOI understand your project’s rollout schedule.
You’ll also need to provide a detailed breakdown of your proposed investment for the first two years, including fixed capital, working capital, share capital, and loan capital. For each category, specify whether the funds come from foreign or local sources. If your investment plan extends beyond two years, attach a separate annex with those details.
In addition, submit a revenue forecast for the first year showing expected income from exports and local sales, broken down by product or service, with quantities and estimated values.
Outline your anticipated employment needs across different categories: managerial staff, technical and supervisory staff, clerical and other workers, skilled workers, and unskilled workers.
Finally, include a detailed implementation timeline showing how many months each key activity will take from the date the BOI agreement is signed. Typical activities include construction, machinery installation, trial production, and the start of commercial operations.
If you have a local contact person who will assist or coordinate the project, include their name, address, phone number, fax (if applicable), and email.
The application must be signed by the shareholder or their representative, confirming that all the information provided is true and accurate. Remember, the BOI can withdraw its approval at any time if they discover any false or misleading information in the application.
3. Annex a Project Proposal and Supporting Documents
BOI project proposal
Your BOI application should acompany a project proposal detailing the project acitivities to align with the draft Articles of Association. This helps the BOI understand the nature and scope of your operations. For example, if your company plans to engage in software development, KPO, BPO, or any other service or manufacturing activity, these should be clearly described in the proposal.
Letter of authority
If someone is applying on behalf of the shareholders, attach a letter of authority authorizing them to act as a representative. This letter should also confirm the individual foreign equity contribution of each foreign collaborator.
Marketing, investment & source of finance details
Prepare a short annexure outlining how you plan to market your product or service, your total investment breakdown, and the expected sources of funding.
Draft Articles of Association
You’ll need to submit a draft version of your company’s Articles of Association for BOI review. Make sure the objects clause clearly outlines the specific business activities you plan to carry out in Sri Lanka. This helps the BOI understand your business scope and determine whether it aligns with their approved sectors.
Shareholder & director information
You’ll need a signed statement with the names of all proposed shareholders and the number of shares each person will hold. Include a list of proposed directors along with their addresses. This document must be signed by the applicant.
Proof of inward remittance
Include evidence of the inward remittance of funds through an IIA(Inward Investment Account), along with the bank credentials of the proposed investors.
If a representative of the proposed new shareholders files the application, they should submit a copy of a letter of authority to act on their behalf which shall also indicate of individual, foreign equity contribution of each foreign collaborator.
4. Letter of acknowledgement of Business Activity (Preliminary approval)
Investment Appraisal Committee of the BOI will grant letter of acknowledgment of Business Activity after Project Screening Committee review your application and grant environmental/engineering clearance in principal and Land Committee approval allocating BOI/Zone lands. BOI will assign a project officer to assist you with the Site Approval process.
5. Reserve your Company name
Check the availability of your proposed company name on the eROC website and reserve your company name.
6. Begin your company incorporation
Once company name is approved, fill out the eROC incorporation forms along with BOI approved Articles of Association and the draft Articles of Association for ROC approval to register your company.
7. Obtain necessary Line Agency Approval
When your company incorporation is pending approval from ROC, obtain the relevant approvals from line agencies such as preliminary clearance for the project activity, environmental protection license (EPL), NMRA approval, preliminary clearance for sourcing of raw materials, rules of origin certificate, import control license(ICL), or preliminary planing clearance for building.
8. Open corporate bank account and IIA for each shareholder
Once you receive the incorporation certificate, open a corporate bank account for the company and Inward Investment Account for each shareholder. You can open both the company bank account and IIAs while holding a valid business visa. However, if shareholders or directors wish to access international debit or ATM card facilities, a resident visa is required. To assist with this, the BOI facilitates visa support by recommending investors, shareholders, and directors for several visa categories: a 30-day entry visa, a one-year multiple entry business visa, a one-year residence visa (from the date of arrival), or a special residence visa, commonly granted to those entering Sri Lanka on an ETA or individuals of Sri Lankan origin (e.g., former citizens or children born in Sri Lanka).
9. Final letter of approval
Upon obtaining line agency approvals, you will receive the formal letter of approval from BOI.
You can learn more about what is BOI approval in Sri Lanka here.
10. Collect the draft BOI Agreement
While site approval and preliminary planning clearance for the building are pending, you can collect and review the draft BOI agreement.
11. Sign the BOI agreement
This is an agreement between your company and the BOI. When site approval and planning clearance for building is granted, you can sign the agreement.
12. Commence project implementation
The BOI agreement specifies a project implementation period (PIP) and your company needs to commence implementation by,
- Obtaining Development Permit (Building Approvals)
- Utilities
- Electricity (Ceylon Electricity Board)
- Water (National Water Supply & Drainage Board)
- Telecommunication (Sri Lanka Telecom/Private Company)
- Registration for VAT/TIN (Inland Revenue Dept.)
- Import Export Registration (Sri Lanka Customs Registration)
- Work Permit & Residence Visa (Ministry of Defense & Dept. of Immigration & Emigration) -Recommendation for Work Permits Residence Visa can be obtained from the Investment Appraisal Dept of the BOI.
- Import (Duty-Free Items)/ Export -BOI Approval from Investment Appraisal Dept/ Engineering Dept of the BOI.
- Registration with Investor Services Dept of BOI.
13. Certificate of Confoirmity and EPL
Once you implement the required actions within the specified project implemention period, you will receive the Certificate of Conformity (COC) Environment Protection License (EPL).
14. Commence Commercial Operations
Your BOI company can begin operations after receiving the COC and EPL.
Timeline for BOI company registration in Sri Lanka
The BOI registration process is pretty straightforward. BOI grants preliminary approval within a week after submitting your application to the Investment Appraisal Committee. The full BOI approval process typically takes about 4 to 6 weeks. However, for EPL and other line agency approvals, the processing times can be slower.
BOI Registration fees in Sri Lanka
Register your BOI company in Sri Lanka
At Counselit, we make the BOI process simple. Our Registered Company Secretaries act as your local agent, helping you draft your BOI Articles, prepare your application and obtain the necessary line agency approvals to get things moving faster.
Thinking of registering a BOI company in Sri Lanka? We’ll help you get it done right. Call us at +94 760011066 or email at contact@counselit.com to book an appointment.
How much time does a BOI company have to implement its project before starting operations? What happens if the project implementation period exceeds the time allowed by the agreement?
The project implementation period (PIP) usually ranges from 6 months to 2 years, depending on the project. This is agreed upon at the time of signing the BOI agreement. Once the agreement is signed, the BOI’s Project Implementation Department actively engages with the investor, especially if there are delays with line agency approvals. The BOI generally allows an extension to the project implementation period if the project is performing well.
In what capacity does the BOI assist investors once company is set up in Sri Lanka?
Once your BOI company is set up, the BOI continues to support your operations, especially when it comes to import and export activities. BOI facilitates the full import/export documentation process through an automated system that’s integrated with Sri Lanka Customs’ ASYCUDA system. This means faster processing and fewer delays. The BOI also helps with issuing and authorizing CUSDECs, conducting cargo inspections, and handling document verification.
You’ll find BOI documentation and verification centers located at the main export processing zones-Katunayake, Koggala, Biyagama, and Pallekele as well as at the Central Verification Terminal in Orugodawatta and the Air Cargo Terminal in Katunayake.
What are the key prospsetive sectors for FDI in Sri Lanka?
IT services, apparel and textile, rubber-based products, Ceramic and glass, Pharmaceutical and medical device manufacturing are some of the key prospective sectors for FDI in Sri Lanka. Once a foreign investor registers with BOI, the agreement is valid for the lifetime of the project.
What is the procedure for obtaining long term Business isa, Work visa and Residence Visa for BOI companies?
BOI visa recoomendation policy is one of the main incentives offered by the BOI to BOI-registered companies. BOI visa recommendations are available for:
Investors under long term visa facility– Up to 5 years
Directors, Senior Management – Typically 2 years
Expatriate workers– Usually 1 year (renewable)
Once your BOI company submits a visa application through the BOI’s online visa management system, the process usually takes around two weeks. The BOI coordinates with the Department of Immigration to facilitate approvals.
What are the facilities provided by BOI for companies set up inside a BOI zone?
BOI zones are designed to support uninterrupted industrial operations with dedicated infrastructure and essential services. Companies set up within a BOI export processing zone (EPZ) can benefit from:
Uninterrupted 24-hour power supply
Reliable water supply dedicated to the zone
Centralized wastewater treatment—industrial effluents are treated at a common facility, helping companies meet environmental compliance and easing the process of obtaining an EPL (Environmental Protection License)
On-site social infrastructure, including medical centers with doctors, 24-hour nursing and public health services, child care centers, banking facilities, insurance and cargo handling services.
How to find a suitable land in Sri Lanka and what is the process for foreing invesor to obtain land to set up a business in Sri Lanka?
Generally, land is made available to foreign-owned businesses on a long-term lease basis, not outright purchase. There are three main types of land accessible to foreign investors in Sri Lanka.
1) BOI-owned land – These are pre-developed plots within BOI zones, equipped with reliable infrastructure. BOI offers them on long-term leases to approved projects.
2) State-owned land – These lands are managed by government agencies such as the Land Commissioner’s Department. The BOI can assist foreign investors in securing long-term leases for state land, especially for large-scale or strategic projects.
3) Privately owned land – Foreign investors can lease up to 50 acres of private land for approved BOI projects. If you’re looking for private land, the BOI can help identify suitable plots and facilitate the transaction.
Regardless of the land type, foreign investors are generally required to structure the arrangement as a long-term lease, in line with Sri Lanka’s land laws.
How long does it take for foreign investors to set up a BOI company?
After you retain a Registered Company Secretary, the first step is to prepare and submit your Articles of Association along with the BOI application.
Once submitted, the BOI will review your application and, within 7 business days, issue preliminary approval to proceed with company incorporation.
After the company is incorporated, the BOI will issue the final letter of approval based on your Articles and the original application.
Within one month of receiving that final letter of approval, the BOI and the newly incorporated company will enter into a formal BOI Agreement, enbling newly incorporated BOI-approved company to commence operations in Sri Lanka.
How can we bring the foreign money into Sri Lanka to be used as capital prior to incorproating the company?
Open an Inward Investment Account (IIA) with a Sri Lankan commercial bank or its agent overseas. You can transfer the required capital through the IIA account before incorporation.
