Sri Lanka

Starting a Business in

Sri Lanka

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Sri Lanka. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 189 economies. The most recent round of data collection was completed in June 2013.

Compare Sri Lanka to 188 other economies.

  • Standardized Company

  • Legal Form: Private Limited Liability Company
  • Paid in Minimum Capital Requirement: None
  • City: Colombo
No. Procedure Time to Complete Associated Costs
1 Reserve a unique company name

Searching for a unique company name can be done online via the website of the Department of the Registrar of Companies. The company name reservation is valid for 3 months.
2 days LKR 1,000 + 12% VAT
2 The company secretary signs a consent

According to Article 221(1) of the Companies Act (no7 of 2007), every company shall have a secretary.
The Company Secretary must be hired before incorporation because one of the requirements to incorporate is a consent form that the Company Secretary must sign saying he/she will be the secretary for the newly formed company.

There is no specific fee schedule. The fees vary from firm to firm, and are generally based on a quarterly retainer. The quarterly charges in the region vary between of USD$ 100 - 150 for private companies but some firms may charge up to USD 1000 annual fee for acting as a Company Secretary.
1 day There is no specific fee schedule for company secretaries. The fees vary from firm to firm, and is generally based on a quarterly retainer
3 Register at the Department of the Registrar of Companies

A company may draft or adopt the standard set of articles of association in Table A of the Companies Act of Sri Lanka. Professional charges are higher for drafting new articles of association than for adopting the standard articles.

The articles of association must be submitted in duplicate to the Department of the Registrar of Companies with the balance of documents for incorporation. No prior approval from the Registrar General is required for the articles of association. According to the new Companies Act, notaries are no longer required to witness the signing of the articles of association.

A flat fee of LKR 15,000 as the registration fee for Form 1, and LKR 1,000+ 12% VAT is charged of the other two forms 18 and 19 and the articles of association. The certificate of incorporation will be received in about 3 days.

Under the new Companies Act, it is no longer required to confirm the principal directors and the situation of the registered office of the company within 14 days of incorporation. Moreover, the common seal was rendered optional.
2 days LKR 15,000 as the registration fee for Form 1 and LKR 1,000 for each of Forms 18 and 19 and the articles of association + 12% VAT
4 Public Notice of Incorporation

According to Section 9 of the Companies Act No. 7 of 2007, public notice must be given within a month of the incorporation of a company. The notice of incorporation specifying the name of the company, registration number, date of incorporation, and address of the registered office should be published in the government gazette and in any daily newspaper in three languages: English, Sinhala and Tamil. The proof of publication should then be filed with the Registrar of Companies. The newspaper publications once handed over with the payment which depends on the size of the notice, will appear within 3-4 days. The publication in the gazette will appear within 2 weeks of submitting the request with the payment. The Registrar of Companies accepts a copy of the receipt issued by the Government Printer as proof of publication.
3 days LKR 7,000
* 5 Register with the tax authorities and obtain a Tax Identification Number (TIN)

The applicant or an authorized representative of the applicant must be physically present at the Inland Revenue Department to pick up and complete the application for a TIN number. The taxpayer identification number (TIN) and the VAT registration number (temporary) can be obtained in a day. To obtain permanent VAT registration, the applicant must submit documents proving turnover of LKR 2,500,000 per quarter or LKR 12,000,000 per year. This is done along with income tax registration. The procedure takes 1–3 days.
1 day (simultaneous with procedure 4) no charge
* 6 Register with the Department of Labor and obtain the EPF number

Companies must register with the Department of Labor to obtain the Employees Provident Fund (EPF) registration number. The fund is a government-owned and maintained by the Central Bank. No separate registration is required to register with the Employees Trust Fund (ETF). ETF uses the same EPF number for their monthly contributions. Companies must also pay gratuities to employees that have been employed for more than 5 years. The gratuity provisions do not apply to companies that have fewer than 15 employees. There is no pension scheme for private sector employees. Businesses that engage in activities of a dangerous nature should obtain special Factories Ordinance checkups.
1 day (simultaneous with procedure 4) no charge
* Takes place simultaneously with another procedure.

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