Post-civil war, economic growth and strategic location are only few factors for anyone to make a decision to set up a business in Sri Lanka. With a lot of opportunities, Sri Lanka aims to become a middle income country with long term plans and sustainable development. With Sri Lanka’s growth over the years, many businesses and investors have expressed their interest to set up businesses within the country and therefore government put up a plan to support the investors in every way possible.

There are multiple ways to set up entities, however here is a basic guide to follow.

Understand the industries of ownership

Different industries have specific and different regulations when it comes to ownership, there are some industries which is specifically reserved for Sri Lankans, some allow up to 40% ownership and there are certain industries which allow 100% ownership for a foreigner. It is important to identify which industry to step into considering the assets and resource pool that the country has to offer. There are government and regulatory bodies which would support large scale projects, while there are experts such as ExroAsia who would support the decision with research, documentation and managing the entire process.

Understand the different business entities in Sri Lanka

It is important to understand the different business entities in Sri Lanka and the process before starting on the documentation. There are unincorporated business types as well as incorporated business types in Sri Lanka. Many go with incorporated business i.e. private limited companies, public limited companies and companies limited by guarantee. Many foreign companies look into opening subsidiaries or branches in Sri Lanka which makes the process easier. Choosing the right type is important, once that is done the next step would be to register the name of the company.

Getting the right documents and incorporating the business entity

Once the legal status is classified under the Sri Lankan law, the capacity of the company, scope and details then begins the registration process. It is necessary to get a company secretary designated within the country before the company registration. Every company needs to have a company secretary and a director once that is sorted, it is required to submit documents to the Registrar of the department of companies. Next begins the entire process of tax process, documentation, and register with tax authorities and obtain a tax identification numbers and Inland Revenue department. Registering with labor department, obtaining EPF, ETF numbers are mandatory to start.

If you need guidance for setting up a business in Sri Lanka, ExroAsia can support with the entire process taking away your hassle. Inbox us if you need an appointment.

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