Business entities in Sri Lanka in 2024

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Healy Consultants will assist our Clients with Sri Lanka business setup. There are several ways to do business in Sri Lanka, the most common being the setup of a Sri Lanka limited liability company. A public limited company can also be an attractive vehicle for our Clients willing to raise capital in the country. Foreign companies can alternatively register a branch in Sri Lanka, or a representative office if they do not plan to conduct commercial operations.

The Sri Lanka limited liability company (LLC)

This is the most common business entity in Sri Lanka. Setting up a Sri Lanka LLC requires at least one director and two shareholders, who can be of any nationality. No minimum share capital is required. In accordance with the Companies Act of 2007, article 5, the company owners must however appoint an individual ordinarily residing in Sri Lanka as company secretary. Healy Consultants can provide our Clients with a company secretary, as well as a registered address in Sri Lanka which is also required to complete setup of a company in Sri Lanka.

The Sri Lanka public limited company (PLC)

The Sri Lanka PLC does not require minimum share capital for the incorporation of the company. Only two shareholders and two directors, who are not required to be Sri Lanka nationals, must be appointed. After Sri Lanka company setup, its directors must file annual returns and submit its audited accounts and financial statements every year.

Sri Lanka Free Zone Company

Sri Lanka has a network of 14 free zones, industrial parks and export promotion zones. See this page for details of an excellent solution for international trade.

The Sri Lanka branch office

A Sri Lanka branch office can be 100% foreign owned. The scope of operations for this entity will be defined by the parent company. The branch office will have an independent management team and corporate bank account based in Sri Lanka. It must however register with the Ministry of Finance and Planning and, in addition to standard taxes, is also subject to a 10% branch tax levied on profits remitted abroad its parent company.

The Sri Lanka representative office

A representative office is neither allowed to make direct sales nor to conduct productive operations within Sri Lanka. The representative office can be 100% foreign owned but a resident company secretary must be appointed. It must also have a local registered address and a corporate bank account in Sri Lanka.

Table of comparison between Sri Lanka entities

LLC PLC Branch Representative office Free Zone Company
How long to setup the Sri Lanka legal entity? 7 weeks 8 weeks 8 weeks 8 weeks 7 weeks
How long to open corporate bank account? 4 weeks 4 weeks 4 weeks 4 weeks 8 weeks
Legal liability? Limited Limited Unlimited Unlimited Limited
Wholly foreign-owned? Yes Yes Yes Yes Yes
Minimum paid-up share capital? US$1 US$1 N/A N/A N/A
File annual tax return? Yes Yes Yes Yes Yes
Corporate bank account? Citibank Standard Chartered HSBC Bank of Ceylon Citibank
Does our Client need to travel? No No No No No
Resident director/representative required? No No Yes Yes Yes
Minimum directors allowed? 1 1 1 1 1
Minimum shareholders? 2 2 1 1 1
Resident company secretary required? Yes Yes N/A N/A Yes
Corporate shareholders allowed? Yes Yes Yes Yes Yes
Standard corporate tax rate? 24% 24% 24% N/A 14-24%
Annual financial statements required? Yes Yes Yes Yes Yes
Statutory audit always required? No Yes Yes Yes Yes
Allowed to issue sales invoices in Sri Lanka? Yes Yes Yes No Yes
Allowed to sign contracts with Sri Lanka entities? Yes Yes Yes No Yes
Allowed to import and export goods? Yes Yes Yes No Yes
Can rent an office in Sri Lanka? Yes Yes Yes Yes Yes
Can own equity in other Sri Lanka companies? Yes Yes Yes No Yes
Total Sri Lanka business setup costs in Yr. 1 US$12,550 US$13,550 US$13,450 US$11,300 Contact us
Subsequent annual costs (incl. accounting and tax fee) US$7,450 US$9,450 US$7,450 US$1,100 Contact us
Sample engagement fee invoice View invoice PDF View invoice PDF View invoice PDF View invoice PDF Contact us

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For additional information on our business setup services in Sri Lanka, please contact our in-house country expert, Mr. Seth Ochieng, directly:
Director of Client Engagements - Seth
  • Mr. Seth Ochieng
  • Director of Client Engagements
  • Contact me!