Complete Guideline for Foreign Company Registration in Sri Lanka

Everyone thinks starting a foreign company is a complicated task. It is difficult because there is not enough information about the online incorporation of a foreign company. If you aspire to join and bring foreign direct investment (FDI) in Sri Lanka; here is a step by step process.

What do you need best?

If a foreign company is excited to invest in Sri Lanka, you can register a foreign company in Sri Lanka. You can choose to work as an "affiliate". This is the place where the same activity, part of the parent company, generates income. The company can be established as a "project office". The execution of the project in Sri Lanka represents the mission and vision of the parent company. A "liaison office" or a "representative office" could be set up. The sole purpose is to serve as a collaboration between the new company and the headquarters/group. There is no revenue generated here.

Submitting company registration forms

Once you have set up your headquarters to operate in Sri Lanka, you will need to visit the Company Register. Here is the list of documents you need.

A certified copy of the memorandum and articles of association. You will need to define the scope of operations performed by the new company.
Form 44 - Data with the registered office or with the main office and place of business in Sri Lanka
Form 45 - List of directors
Form 46 - Name of the person/person’s resident in Sri Lanka authorized to accept the service
Documents on behalf of the company
Photocopies; certificate of recent date, of any supporting documents Incorporation of the company.

Initial investment

If a foreign company intends to operate in Sri Lanka, there is at least an initial investment of $ 200,000. This also applies to an equal amount in other designated foreign currencies. You will need to make the payment through a "Securities Investment Account" (SIA) opened at a commercial bank in Sri Lanka. You will need to register and keep these funds in your company's books until this company ceases business in Sri Lanka.

Provide proof of this referral to the company registrar within 30 days of registration.

Industries with barriers to FDI

The Sri Lankan government has set its own boundaries when it comes to the involvement of foreign companies. Foreign direct investments in companies that carry out the following activities are not allowed;

Loan of money
Pawnbrokers
Retail with a capital of less than $ 1 million(Excluding if a foreign company does not deal with the final customer and sells bulk to distributors.)
Coastal fishing
Providing security services, including security management,
Assessment and consultation of individuals or private organizations

Foreign direct investments in the following businesses have a limit of 40% of the declared capital of the company. This does not apply to companies with a higher threshold of foreign ownership. This applies if there is permission granted by the Investment Board (BOI);

Production of goods in which exports from Sri Lanka are subject to quota restrictions
Primary growth and processing of tea, rubber, coconut, cocoa, rice, sugar, and spices
Mining and primary processing of non-renewable national resources
Timber based industries using local timber
Deep-sea fishing
Mass communication
Education
Shipment of goods
Travel agencies
Shipping agencies

Approvals from relevant government authorities are essential for investments in:

Airline
Shipping
Industries involved in the manufacture of weapons, ammunition, explosives, military vehicles, military hardware, poison, narcotics or security documents.
Large-scale mechanized stone mining
lotteries
Additional mandatory requirements when registering a foreign company

Every foreign registered company must draw up financial statements. Each year, you will need to hand over certified copies of these documents.

You will need certified copies of the parent company statement. Note, the appointment of directors is not applicable, as the company is not a corporate body. Also, it is not necessary to prescribe a number of employees. Make sure that the secretaries and appointed lawyers of the foreign company live in Sri Lanka.