Setting up a company by foreigners in Sri Lanka

Setting up a company by foreigners in Sri Lanka

If you are a foreigner and you want to start a company in sri lanka , you have to comply with the Foriegn Exchange Act and the regulations in addition to the Companies Act.

Recently the registrar of companies requested foriegn companies to take approval from the relevant line ministry / authority before the commencement of the business. Further your company might be required to take exchange controllers approval.

Following list will be the limited business nature for foriegn shareholders

Permission in respect of shares in a company carrying on or proposing to carry on any of the following business will be only able to have upto 40 per cent of the stated capital of such company or special approval been granted by the Board of Investment of Sri lanka

• Production of goods where Sri-Lanka’s exports subject to internationally determined quota restrictions.
• Growing and primary processing of tea, rubber, coconut, cocoa, rice, sugar and spices.
• Mining and primary processing of non-renewa ble national resources.
• Timber based industries using local timber.
• Deep sea fishing (as defined by the Ministry assigned the subject of Fisheries).
• Mass communication.
• Education.
• Freight forwarding.
• Travel agencies.
• Shipping Agencies.

Foriegn shareholders will be unable to engage in the following business

• Pawnbroking;
• Coastal Fishing;
• Retail trade where a capital contributed by persons resident outside Sri Lanka will be less than USD 5 Million.

Feel free to call us on +94 71 660 6000 or +94 76 601 6009 for any clarification on this regard.