#ECSS
INCORPORATING A NEW COMPANY IN SRI LANKA
Choosing the Right Business Structure for Your Idea is an exciting venture, but it requires careful planning and decision-making. However, this decision will have significant financial, legal, and operational impacts, so it's important to take the time to consider your options.
There are several business structures to choose from in Sri Lanka. At ECSS, we understand that choosing the right business structure can be overwhelming. That's why we offer a wide range of company registration services to help you make informed decisions and get your business off to a successful start.
Private Limited Company
(with only local shareholders)
Incorporation of Private Limited Company in Sri Lanka needs minimum of one Director and one Shareholder. Nature of business such as Manufacturing, Trading, Services, Agriculture etc. are not required to define as objectives under the Articles of Association since any type of business are allowed under a Private Limited Company with Sri Lankan shareholders. A minimum investment has not been prescribed by law and the registered place of business could be anywhere in Sri Lanka.
Private Limited Company
(With only foreign shareholders)
Incorporation of Private Limited Company in Sri Lanka with foreign shareholding needs minimum of one Director including foreign director and one Shareholder. Nature of business such as Manufacturing, Trading, Services, Agriculture etc. are required to be defined as objectives under the Articles of Association and there are restrictions to hold shares for certain nature of business for non-citizen of Sri Lanka. Minimum investment has not been prescribed by law other than investment through Board of Investment. A Sri Lankan address is required for a Private Limited Company with foreign shareholders as the Company address and local address of foreign shareholders & directors
Private Limited Company
(With both Local and Foreign shareholders)
A Private Limited Company can be incorporated with Sri Lankan and Foreign shareholders with restrictions imposed under the Land Alienation Act and Exchange Control Act. Under the Land Act foreign shareholdings are restricted to 49% and under the Exchange Control Act certain types of businesses are not allowed or restricted to 40% of shareholdings of a Company.
Registration of Foreign Branch Office
We offer comprehensive guidance on registering a branch office in Sri Lanka, whether it's for business or non-business purposes. Our expertise spans beyond just Company law – we cover all applicable laws necessary for registering and operating a branch office in Sri Lanka.
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In addition to registration services, we provide a range of supplementary offerings. These include assistance with securing a local address, appointing a nominee authorized person, facilitating the opening of bank accounts, and handling registrations required under labor laws.
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Moreover, we offer support with visa applications, work permits, and other administrative processes to ensure a smooth and compliant operation for our clients. With our holistic approach, we aim to provide end-to-end solutions for establishing and running a branch office in Sri Lanka.
Registration of Guarantee Limited Company
A company limited by guarantee is required to have articles of association that outline two key aspects:
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(a) The objects of the company: These are the purposes for which the company is established and operates. The articles should clearly define the objectives and goals that the company seeks to achieve.
(b) The amount which each member undertakes to contribute to the assets of the company in the event of liquidation: Each member of the company commits to contributing a specified amount towards the company's assets in case the company goes into liquidation.
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If the Registrar is satisfied that an association is formed as a company limited by guarantee to promote various purposes such as commerce, art, science, religion, charity, sport, or any other useful object, and intends to utilize its profits or other income for promoting its objectives while prohibiting the payment of dividends to its members, the following provisions apply:
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(a) The Registrar may, by license, direct that the association be registered as a company limited by guarantee without the addition of the word "Limited" to its name.
(b) The association may be registered accordingly and upon registration, it shall enjoy all the privileges subject to the provisions of the Companies Act. This includes the legal recognition and benefits of being a company limited by guarantee, without the requirement to use the word "Limited" in its name.
Off-Shore Company in Sri Lanka
In Sri Lanka, a company, whether registered within or outside the country, has the option to register itself as an offshore company to conduct business outside the jurisdiction of Sri Lanka. This process involves making an application to the Registrar to be registered as an offshore company. In the case of a company incorporated abroad, this registration also deems the company to be incorporated in Sri Lanka, as if it had been established under the provisions of the Companies Act.
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Upon registration, the offshore company is issued a certificate of registration, which exempts it from complying with certain provisions of the Companies Act. This exemption streamlines the regulatory requirements for offshore companies, facilitating their operations and ensuring compliance with relevant legal frameworks.
Not sure what type of company suited for you ?
Get in touch with us for a 1 hour free consultation and we will help you make the right choice.