10 steps to incorporating in Sri Lanka in 2021
- Consultation phase: Healy Consultants discusses our Client’s requirements and highlights i) any potential licensing requirements and ii) whether any changes to the model articles and memorandum of association are advisable;
- Planning phase: We draft a detailed engagement plan for our Client, detailing each step of the process until completion, including i) the incorporation and business registration procedures ii) document requirements iii) tax implications and iv) obtaining any necessary licenses. The engagement plan optimizes work transparency, sets Client’s expectations and helps ensure effective execution;
- Company structure: Healy Consultants and our Client discuss and agree on the following points:
- Company name: A company must apply for a name for approval by the department of the Register of Companies. A name which is similar to an existing company name or that breaks any regulation regarding the choice of a name is not allowed. Clients can verify the availability of the name by searching for existing names registered with the Sri Lanka government.
- Company secretary: Every company must appoint a resident secretary according to laws in Sri Lanka. Healy Consultants provides secretarial services to our Clients as part of our incorporation services;
- Registered address: Companies are also required to provide a local registered address in order to be able to incorporate a company in Sri Lanka. Healy Consultants includes the use of our registered address in our incorporation service plan;
- Company constitution: Companies must prepare an Article of Association according to the rules of the Companies Act No7 of 2007. It must contain i) the objects of the company, ii) the rights and obligations of the shareholders of the company and iii) the management and administration of the company.
- Documents preparation: Once the structure of the company is finalized, our Client must fill in the following forms: i) Form 1 Registration of a Company, ii) Form 18 Consent and Certificate of Director, iii) Form 19 Consent and certificate of secretary/secretaries. All forms are available at the Department of Registrar of Companies’ website.
- Document submission: Once the documents are completed, Healy Consultants submits the incorporation package for approval by the Department of Registrar of Companies;
- Incorporation approval: The amount of time required for the incorporation of a company in Sri Lank is around 7 weeks. Once the process is approved, Healy Consultants will immediately email our Client with the certificate of incorporation.
- Public notice: Within 30 working days of the incorporation, every company has to give a public notice of its incorporation stating the name and company number, as well as the address of the company’s registered office. The notice should be published at the Government Gazette and any daily newspaper in English, Sinhala and Tamil. Proof of the publication should be submitted to the Registrar of Companies;
- Bank account opening: Once a company is incorporated, it can apply for a corporate bank account. Healy Consultants will assist our Client in selecting the bank and type of account that better satisfies their needs;
- Licenses and registrations: Following the incorporation process, companies then have to complete the following registrations:
- Register as a taxpayer: All companies have to register and obtain a Tax Indication Number (TIN) from the Inland Revenue Department. The registration form can be obtained at the IRD’s website;
- Register for VAT: All companies also have to register for VAT with the Inland Revenue Department;
- Stamp duty: A company has one month from its incorporation to issue the shares assigned to each shareholder. A stamp duty has to be paid to the Inland Revenue Department for each share issued;
- Employees provident fund: Within 15 days of hiring the first employee, a company must register to obtain an Employees Provident Fund (EPF) number. The registration must be made with the Employees Provident Fund department;
- Licenses applications: If necessary, Healy Consultants will assist our Client with the application of other specific licenses for their business activities.
- Engagement completion: Following the issuance of all necessary approvals, certificates and licenses, Healy Consultants couriers a full company kit to our Client, including original corporate documents, unopened bank correspondence and a Client feedback survey.