Setting Up a Company in Sri Lanka by Foreigners

If you are a foreigner and you want to start a company in Sri Lanka, you must comply with the Foreign Exchange Act and the regulations issued under it, in addition to the Companies Act No. 7 of 2007.

Recently the Registrar of Companies has requested foreign companies to obtain approval from the relevant line ministry or authority before commencing business. Your company may also be required to obtain Exchange Controller approval depending on the nature of the business.

Business activities limited for foreign shareholders

Permission in respect of shares in a company carrying on, or proposing to carry on, any of the following businesses is limited to 40 per cent of the stated capital of that company, unless special approval is granted by the Board of Investment of Sri Lanka:

• Production of goods where Sri Lanka’s exports are 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-renewable 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.

Businesses closed to foreign shareholders

Foreign shareholders are unable to engage in the following businesses:

• Pawnbroking.
• Coastal fishing.
• Retail trade where the capital contributed by persons resident outside Sri Lanka is less than USD 5 million.

Before you begin: check the name

How we help

We handle the full incorporation, BOI liaison and Exchange Controller documentation for foreign-owned companies, including line ministry approvals where these are required.

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