Step by Step Guide to How to register a company in Sri Lanka as foreigner 1

How to register a company in Sri Lanka as a foreigner?

If you’re a foreigner looking to register a company in Sri Lanka, you may have questions about the types of businesses open to you, the percentage of shares foreigners can own, whether a foreign shareholder can serve as a company director, and what documents you need to file for incorporation.

In this guide, we’ll walk you through everything you need to know about registering a company in Sri Lanka as a foreigner—step by step.

Here’s what you’ll learn.

Understanding Company Registration in Sri Lanka for Foreigners

A foreign individual or a foreign incorporated company can register a company in Sri Lanka either as a:

Joint venture (between two foreign companies or a foreign and Sri Lankan company)
Private limited liability company with sole ownership (for businesses that allow 100% foreign ownership)
Private limited liability company with at least two shareholders (for businesses with a cap of 40% foreign ownership and 60% or more local ownership)

Before you incorporate your company with the Registrar of Companies, there are four key considerations to keep in mind.

Percentage of foreign shareholding– The percentage of company shares you can own depends on the industry. Some sectors are reserved for Sri Lankan nationals, while others allow 100% foreign ownership. In certain industries, foreign ownership is limited.
BOI approval– Foreign-owned companies in certain industries need to register with the Board of Investment in Sri Lanka (BOI) before they can be incorporated as a company.
Local Registered Company Secretary– It is mandatory for all foreign-owned companies to have a local company secretary who resides in Sri Lanka.
Local Address– When submitting Form 1 for incorporation, the Registrar of Companies (ROC) will require you to provide a local address for your company.

Legal Requirements for Foreign-Owned Companies in Sri Lanka

Can foreigners own a company in Sri Lanka?

Yes, foreigners can register a company and own shares in it or an existing company, however, subject to restrictions under the Foreign Exchange Act, No. 12 of 2017.

Government Gazette (Extraordinary) No. 2213/35 dated 03 February 2021 sets out the exclusions, limitations, and conditions for the investing, acquiring, and holding of shares by foreign incorporated companies and individuals resident outside Sri Lanka.

Sectors Reserved Exclusively for Sri Lankan nationals:

Pawnbroking
Coastal Fishing
Retail Trade with a capital under USD 5 million

This means that as a foreigner, you cannot invest in or carry on a business in these sectors, even with a local business partner.

Money lending is no longer a sector reserved for Sri Lankan nationals only. Branches of foreign banks registered in Sri Lanka under the Banking Act are carrying on money lending activities. However, overseas companies are prohibited from carrying on a business in money lending.

Sectors with a 40% Foreign Ownership Cap:

Foreigners investing in the following industries can own shares only up to 40% of the issued capital of the company.

Education
Travel Agencies
Mass Communication
Freight Forwarding
Shipping Agencies
Deep-sea fishing
Timber-based Industries utilizing local timber
Mining and Primary processing of Non-Renewable Natural Resources
Agriculture-related Industries (Growing and processing of Tea, Rubber, Cocoa, Spices, Rice, and Sugar)
Production of Goods where Sri Lankan Exports are Subjected to Internationally Determined Quota Restrictions

If you want to own more than 40% of the shares as a foreigner, you can apply to the Board of Investment of Sri Lanka (BOI) for approval. The BOI will assess your case and inform you of the percentage of shares you may own beyond the 40% cap.

Sectors Requiring Line Ministry Approval

These sectors require special approval from the Government of Sri Lanka or any legal or administrative authority established for the approval of foreign investment in these businesses.

The permissible percentage of foreign ownership in these sectors is subject to the ministry’s discretion.

Air Transportation
Coastal Shipping
Large-scale mechanized Mining of gems
Lotteries
Manufacturing arms, ammunition, explosives, military vehicles and equipment aircraft, and other military hardware
Producing currency, coins, or security documents
Manufacturing poison, narcotics, alcohol, dangerous drugs, and toxic, hazardous, or carcinogenic materials

Sectors that can have 100% Foreign Ownership

All sectors not explicitly listed above generally allow 100% foreign ownership. Examples include:

• IT
• Tourism and Hospitality
• Construction

What is boi approval in Sri Lanka?

The Board of Investment of Sri Lanka is the main regulatory body responsible for approving Foreign Direct Investments (FDI). BOI is governed by the Board of Investment Law No. 4 of 1978. Under section 17 of this law, the BOI has the authority to make agreements with foreign investors of proposed companies to grant exemptions from certain laws, such as the Foreign Exchange Act.

However, not all companies with foreign shareholders require special approval from the BOI.

So, when do you need BOI approval?

Setting up a new company with 100% foreign shareholding where 100% foreign ownership is not permitted
Transferring shares or issuing new shares in an existing non-BOI company (except retail and trading) to only foreign investors beyond the permitted 40% cap

The minimum investment threshold for BOI approval is US$ 250,000.

For a step-by-step guide on BOI company registration in Sri Lanka, read our blog on How to register a BOI company in Sri Lanka.

What is a Local Registered Company Secretary

It is mandatory for all foreign-owned companies in Sri Lanka to have a registered local company secretary who lives in Sri Lanka to manage compliance matters and maintain company records.

Your local secretary can be an individual, such as an attorney-at-law or accountant, or a law or accounting firm that holds a valid Certificate of Practice issued by the Department of the Registrar of Companies.

Local Business Address

To manage your company operations, you will need a physical business address for your company. This can be the local address of someone you know in Sri Lanka, your local business partner, or your company secretary. You’ll need a physical local address when opening a business bank account (we’ll cover that later).

You can also pay for a co-working space that will give you a physical address, however, it is not the most practical or cost-effective choice for a foreigner—especially if you don’t have any employees in Sri Lanka. Instead, investing in a virtual mailbox with a permanent business address for your company makes much more sense.

Step-by-Step Guide to Registering a Company in Sri Lanka as a Foreigner

Here are the steps you need to follow when registering a company as a foreigner in Sri Lanka.

Step 1: Reserve your Company name

Visit the eROC Sri Lanka website to check the availability of your desired company name and you can file a name reservation application with the Department of the Registrar of Companies using the eROC website. It typically takes 5 business days to get your company name approved.

Your company name should comply with the naming requirements in section 6 and restrictions on names in section 7 of the Companies Act No. 7 of 2007.
The name should not be too similar to existing company names of companies registered in Sri Lanka..

To learn how to file a name reservation application read our article on company registration in Sri Lanka.

Step 2: Appoint a local Registered Company Secretary

All foreign-registered companies in Sri Lanka are required to appoint a resident company secretary who has a valid Certificate of Practice (COP).
You should appoint a secretary before registration, as consent of the secretary (Form 19) is needed to be submitted during the company registration process.

Step 3: Obtain a local address for your company

Your company must have a local business address within Sri Lanka (no P.O. Box).
If you do not have a local team or employees working with you, renting a virtual office address or using a house address of your local business partner is a cost-effective option for you.

Step 4: Complete and submit company registration forms (eROC forms)

Once you receive company name approval, start filing for incorporation on the eROC website.
Fill in the company name, address, objectives, and stakeholder details, and download the following forms. You need to place your handwritten signature on the printed forms. Then upload scanned copies of the duly signed forms to the eROC.
- Form 1: Company Registration Form (includes company name, address, type, directors, and number of shares)
- Form 18: Consent of Director (director details and appointment date)
- Form 19: Consent of Secretary (company secretary details)

Step 5: Prepare the Articles of Association

The Articles of Association (AOA) is the document that sets out the rules relating to the internal administration of your company. The Articles describe your company’s objectives, appointment and removal of directors, directors’ duties, how board meetings are held, board resolutions, recording of minutes, and holding of AGM.
Articles should comply with the Companies Act No. 7 of 2007. You can follow the Model Articles in Schedule 1 of the Companies Act or your Company Secretary will help you prepare a fully customized Articles of Association for your company.

Step 6: Issue a Public Notice (for Guarantee and Public Limited Companies)

If you’re forming a Guarantee Limited Company or a Public Limited Company, you are required to publish a public notice after incorporation.
The notice should appear in at least three local newspapers and include the following information:
- Company name
- Registered address
- Description of company
- Registration number

Step 7: Apply for TIN registration online

Every company needs to register for income tax after receiving the company incorporation certificate. You can apply for TIN registration online using the IRD e-services.

Step 8: Open a local Business Bank Account and Inward Investment Account (IIA)

Once you incorporate your company and commence business operations, you will need a bank account to manage company transactions.

To open a corporate bank account, you’ll need a copy of your company’s incorporation certificate, the TIN certificate, and copies of eROC Form 1, Form 20 (applies when you have made changes to a Director or Secretary), and the articles of association. These should be certified by the ROC and re-certified by your company secretary.

You’ll also need to provide an extract of the board resolution to open the bank account, signed by the directors and certified by the company secretary

The bank will ask for your passport, and proof of foreign residency.

According to Gazette No. 2213/35, all funds required for capital investments need to be remitted through an Inward Investment Account opened and maintained with a licensed commercial bank. You can open an IIA either in foreign currency or LKR. This means each shareholder of your company should open an Inward Investment Account (IIA) to route their investment funds to the company bank account.

Types of Companies Foreigners Can Register in Sri Lanka

A private limited company is the most common structure foreign individuals use when setting up a company in Sri Lanka. In addition to pvt ltd companies, foreigners can also form guarantee companies, public limited companies, or off-shore companies.

1. Private Limited Liability Company

The Private Limited Company (Pvt Ltd) is ideal for one-person companies (single-shareholder companies) or smaller companies with multiple shareholders. There is no minimum share capital requirement, except for certain regulated industries, such as retail trade which requires a capital contribution of more than 5 million USD.

2. Offshore Company

Foreigners can register offshore entities in Sri Lanka. However, these entities are usually restricted from conducting business within Sri Lanka, except in the Colombo Port City Special Economic Zone.

Companies registered within the Port City are permitted to operate within its designated boundaries.

3. Company Limited by Guarantee

A Company Limited by Guarantee is a limited liability company typically used for forming non-profit organizations and charitable institutions. Guarantee companies require a minimum of two shareholders.

4. Public Limited Company

Foreigners can incorporate a public limited company (PLC) and obtain CSE approval if the company meets the eligibility criteria for listing on the Colombo Stock Exchange

5. Joint Venture

A Joint Venture is a collaboration between two or more companies. This can be between two foreign companies or a foreign company and a company registered in Sri Lanka. The joint venture can be structured as a separate legal entity or through a contractual agreement.

Documents required to register a company in Sri Lanka as a foreigner

If you’re a foreigner registering a company in Sri Lanka, you need to submit scanned copies of the following documents to the eROC online registration portal.

Valid Passport
Address Proof Document for Local Address of the proposed company
Articles of Association signed by each initial shareholder
If local shareholding is required, NIC of the local individual or certificate of incorporation of the local company
Form 1 Application form signed by initial directors, shareholders, and secretary
Form 18 Notices of Consent and Certificate of Director signed by initial directors
Form 19 Notice of Consent and Certificate of Secretary signed by the secretary

Costs and Fees for Foreign Company Registration in Sri Lanka

Company Incorporation Fees

As per the revised company registration fees published by the Department of Company Registration in Gazette No. 2303/07 (dated October 25, 2022), the incorporation fee for a private limited company in Sri Lanka is 16,613 LKR. This includes 18% VAT and convenience fees. This covers the name reservation fee of 2,761 LKR and the company registration fee of 13,852 LKR.

For a detailed breakdown, check out our comprehensive guide to company incorporation fees in Sri Lanka.

Annual Compliance Fees

Every registered company in Sri Lanka must file an Annual Return (Form 15) with the Registrar of Companies (ROC). The cost to submit the annual Return (for companies other than those limited by guarantee) is 6,000 LKR + 8% VAT.

FAQs about Company Registration in Sri Lanka as a Foreginer

Can a foreigner own 100% of a company in Sri Lanka?

Yes, in most industries a foreigner can register a single shareholder company and fully own its shares. Some sectors like retail and small-scale trade have restrictions requiring local partnerships.

Do I need a local partner to start a company in Sri Lanka?

You do not need a local business partner unless the proposed business activity falls within a restricted industry with limited foreign shareholding.

Do I need a local director to start a company?

No, a foreigner can be the sole director and shareholder of their company.

Where to register a company in Sri Lanka?

In Sri Lanka, you can register a company with the Department of Registrar of Companies (ROC). Registration can be done online using the eROC Sri Lanka website after creating your eROC log-in.

How to do a company registration name check?

Visit the eROC Sri Lanka website home page and type in your desired name on the search bar to perform a company registration name check. If the name is available, you can sign up to create an eROC log-in and proceed to reserve your company name.

What are company registration documents?

Complete and upload scanned copies of the following company registration documents to the eROC portal.
1. Articles of Association
2. Form 01- Application for company registration
3. Form 18- Notice of consent of the director
4. Form 19- Notice of consent of the secretary
5. Passport
6. Local address proof document

Where to collect the company registration certificate?

Once the company registration application is approved, the Registrar of Companies will send an email to you confirming approval of your incorporation request with an attachment of the company incorporation certificate.

How Long Does It Take to Register a Company in Sri Lanka?

The time frame for registering a company in Sri Lanka is generally 10 business days. Name approval generally takes 5 business days. Incorporation can take approximately 5 business days.

What are the Minimum Capital Requirements for Company Registration as a foreigner?

There is no minimum stated capital to register a company under Companies Act No. 7 of 2007. However, to list a public limited company on the Colombo Stock Exchange, you need to comply with the Float Adjusted Market Capitalization, Public Holding Percentage, and Number of Public Shareholders (collectively known as ‘Minimum Public Holding Requirement’).

What are tax incentives for foreign investors in Sri Lanka?

The standard corporate income tax(CIT) rate is 30%. A higher CIT rate of 45% will apply to betting and gaming businesses and the sale and import of liquor and tobacco products w.e.f April 2025.
Pharmaceutical manufacturing and textile manufacturing in dedicated economic zones enjoy tax holidays.
Companies exporting services will be taxed at 15% instead of the standard corporate income tax rate w.e.f April 2025.
Additionally, foreign investors can enjoy enhanced capital allowances (ECA) for a period of 10-25 years depending on the amount of investment in addition to the normal depreciation allowance.
Other tax incentives include custom duty, port and airport levy, and CESS exemptions for export and non-export-oriented businesses manufacturing capital goods (Plant, machinery & equipment) and construction items during PIP for the enterprise.
VAT reductions/exemptions/deferments are also available for export and non-export-oriented businesses manufacturing capital goods.

Can I apply for a visa as a foreign investor or business visitor to Sri Lanka?

Yes, you can apply for an ETA (Electronic Travel Authorization) under the “Business Purpose” or “Investor” category via https://eta.gov.lk through the Department of Immigration.
A Business Purpose Visa allows foreign nationals to visit Sri Lanka for short-term business activities and can be granted for single, double, or multiple entries.
Foreign investors who invest at least $100,000 (or the equivalent in foreign currency deposited into an IIA account and confirmed by a bank statement) in a new or existing business can apply for an investor visa. With a $100,000 investment, you’ll get a five-year renewable visa, and with $200,000, you’ll be eligible for a ten-year renewable visa.

What are the annual compliance requirements for foreign-owned companies?

Within 18 months after incorporation, you need to file the Form 15 annual return with the Registrar of Companies (ROC) and an Annual income tax return before November 30th to the Inland Revenue Department (IRD).

Register your company in Sri Lanka with Counselit Today

Registering a company in Sri Lanka as a foreigner can be definitely challenging. Not only is it harder to file and manage your legal paperwork when you’re not physically present, but you also have to figure out everything from regulatory approvals to incorporation and post-incorporation compliance.

At Counselit, we make the process easier by offering expert incorporation support and registered company secretary services for business owners worldwide. Call us at +94760011066, email contact@counselit.com, or book an appointment online—we’d love to help you get started.