How to register your business in Sri Lanka.
It is a good practice to register your business before it is late. There is a late fee from your local authorities if you leave it for too long.
Let the fine aside, neither banks, nor any organization will recognize you as a valid business entity without the business registration. Even if you run your business totally online there are lots of advantages when running it as a registered business.
Situations where you need the business registration.
*To apply for a credit card.
*To apply for a bank loan.
*To battle law suits. ( Beleive me this is a possibility no matter how clean you are.)
*To impress your in laws :D
This post has been written with the assumption that your only source of income is from the online/ offline business you are running.
I know lot of sri lankans who run web hosting, web developing, web marketing businesses never register their businesses. And most of the people who are running offline services businesses also forget this fact. If you come here from a google search, ” How to register a business in Sri Lanka” , the following is written solely for you.
There are 3 Types of practical entities you can start.
1. A sole trade business. – You are the only owner of the business.
2. A partnership – Ownership can be between 2-20 partners.
3. A private limited company – Refer your old “business studies” notes.
When you are first starting out, it is better to go with a sole trade or partnership type of business. In order to register your business, you need to go to your ” Provincial company Registration Authority”. For western province , it is located at Union place near Nawaloka Hospital.
For a sole trade, the registration fee is just Rs 500/= and you can get it within a day If you pay Rs1000/=. Otherwise they will mail you the registration within 2 weeks.
How To open a business account in Sri Lanka.
Once you have a business registration certificate in your hand, the next important step is to open a business account with a commercial bank. If you have to prove your income in any situation, ( To get a credit card, Apply for a bank loan.) your bank statements will come in to your rescue.
To open a business account also known as a current account, most of the banks require you to meet the bank branch manager directly. So do not waste your time with banking assistances and go to the person who you should meet.
If you are running an online business you might have to think of ways to explain the business plan to your bank manger. In Sri Lanka most of the people are not familiar with the concept yet.
I did not have to go through the trouble as I am running a offline business together with my web sites. But do not worry, they are good people and will listen to you. After all, they need your business.
I almost forgot, you need at least Rs 50,000 to open a current account in Sri Lanka. I do not know whether any bank has lower their minimum requirement but when I had to check last year , the minimum was in 50k to 100k range.
Once you have opened a business account, do not just leave it there. Financial Institutions make decisions based on the amount of transactions you have done and on the value of them. Consider this as a salary sheet. This is all you have as a legal document to prove your income. Do not go and ask for a loan with a blank bank statement. Just because you are running a registered business, no one will believe your earning capacity unless you have numbers to prove it.
So try to do all your business transactions through your bank accounts. Even pay your utility bills through this. Give your buddies cheques and get cash. Or vice a versa. Don’t tell anyone that you learn it here :D
How to apply for a Credit Card in Sri Lanka.
Once you have 3 bank statements with good numbers in it, you can apply for a credit card. The application form says that your business registration should be at least 2 years old but I have never seen anyone having problems if you have good numbers in your bank statement. I got my first credit card soon after I finish my A/L’s.
I do not know the exact situation behind Seylan bank at the moment. But one thing I know is they are super fast in approving your credit card. I have CC’s with 3 banks but Seylan service has been the best so far.
Keep Accounts in your start up business.
There are many small business accounting packages available. This is a very important factor for any business. I am not going to write the benefits of having a proper accounting system but keep in mind that it is a must. If you find it difficult to maintain accounts by yourself or if you do not have enough money to hire someone, at least keep records of your income and expenses. File all your invoices received and issued.
At the year end you can go to a small audit firm and ask them to prepare audited financial accounts for you. Do not worry; It will not cost you much. But the benefits are endless. Any bank will accept these audited financial accounts as a valid proof of your income.
Open an Income tax file.
Don’t put a face now! Having a income tax file is a great advantage. They are not going to rip you off. Most of the bad things you heard are spreaded by people who has never paid a single cent as income tax.
After deducting all the tax allowed expenses you do not have to pay a considerable amount anyway. You can get assistance from a tax adviser for a very small fee to determine how much you have to pay.
When you applying for a bank loan If you have a income tax file under your name the whole process will be much easier for you. They do not care whether you pay Rs 5000 or Rs 500000 as tax. But they will know that you are a credible person with a sound income.
In this article we have talked about how to start a business in Sri Lanka. The basic details regarding how to register your business?, how to open a business account?, How to apply for a credit card? And other areas related to small businesses in Sri Lanka have been briefly discussed. If you have further questions do not hesitate to ask them here at the comments section. I will do my best to answer them ASAP.
If you are determined to do something, yet do not know where to start, I always advice to start a internet business. It will only cost you few thousand rupees and you can use the earnings as a capital to start a solid offline venture. I know few dozen people who has successfully done it. Why not you?
Related Must Read Article.
How To start a web site to make money online?
[...] is the original: How To Start A Business In Sri Lanka. Share and [...]
[...] Read the original: How To Start A Business In Sri Lanka. [...]
[...] [...]
Thanks for the great post.
I need to know if i register a company, let’s say “ABC” …..
can i use ABC (Pvt) Ltd ? for my company
Thanks in Advance
@ Darshana,
If you need the (pvt) part in your company name you need to register it as a private limited company and not as a sole trade or partnership.
The last time I checked the cost was approximately around Rs 10000/=. Someone please confirm the new rates :D
The difference here from a sole trade is your liability is only limited to the share ownership under your name. In a sole trade, your liability is extended even to the private property owned by you. The process here is bit complicated and bit lengthy. But it is definitely worth it.
You can register any name if it has not been registerd by someone else already. And there are some name extensions that you cannot include in your company name as specified by the company registrar.
i.e National, President, Sri Lanka.
Hope this helps. Let me know If you need to anything else.
Great post. I had been sort of worried about all these registrations and stuff although my internet business has yet to bring in a cent. Definitely bookmarked this for reference when I get to that stage.
Also congratulation on doing a great blog specially geared to Sri Lankans interest5ed in internet business. It is very inspiring to see a Sri Lnakan has succeeded in the online world.
@ Charita
Thank you.
Still this blog’s Sri Lankan visitor base is less than 40% of the total visits. That is why most of my articles are non Sri Lankan oriented.
But I cannot forget the fact that this less proportion need my support the most. I will be starting a new blog specially designed to cater the needs of newbie sri lankan money makers :-)
That is cool, let us know when the new blog goes online. I hope we can build a community around it to help each other. It is about time we Sri Lankans got together and did something to help in the development of the country by setting up our own businesses. As you mention in the post internet business is the best place to start.
Keep up the good work and let us know what we can do to help.
Wow that is very informative, thanks for sharing.
I was looking for information on registering a sole trade in my area Kaluthara. Thank you so much for providing us with valuable details.
Thanks for giving this oppertunity to me. Im fresh to Business World. I would like to Start a Business. Then thease informations are help to develop my thinking.
I wanted to register a sole trade and when I did a search I ended up here. Thanks a lot for providing valuable information.
A very good subject, different ideas .. I formed a positive opinion .. Thank you for your nice comments and ideas.
I was looking for information on registering a sole trade in my area Kaluthara.
I like all of the pages. I appreciate the designers .
great article – I always find it interesting reading about starting a business in another country
hi,
to be frank, this is great. very useful information. thanks a lot
Please send me the detail of low in sri lanka to register a company.
Great post men very helpful
Thanks man
it’s very useful for me. thankyou
Hi there
Just wondering, as a Sri Lankan but having obtained residency somewhere else in the world, if I want to return to SL and start a business, how would that work? It will not involve any commercial dealings, hoping to establish it in the education/tutoring field. Any information as to the process will be very much appreciated.
Very impressed with your website – with all my searches online, there was nothing that gave the type of information that you provide.
Regards
Pami
@ Pami,
Thank you for the nice compliment.
No matter whether you want to operate as a commercial entity or not if you want to get accepted as a legal entity the procedure is same.
But you need to have an residence/ Official address in Sri Lanka and a national ID card. Otherwise the procedure for opening business for non residents is slightly different. Anyway there is no restriction in foreign ownership in this country unlike most other countries. Any foreigner can operate under 100% ownership.
But I beleive you will not fall under foreign category. Come and start contributing to the National Economy. Now that the war is over there will be many new opportunities.
Hi
Thanks for the information. Please tell me how i can get patents/ copy rights on an idea I have?
Thanks heaps Eranda
1] As a foreign passpor holder, how would one obtain a SL national id card? What documents need to be provided? What is the procedure?
2] Why would not I fall under foreign category? Pardon my ignorance, but can you please explain to me under what parameters can one, being a citizen of another country, operate in SL as a local and not fall into foreign category?
Any information would be sooo much appreciated – even if you can direct me to the right department, person or provide contact details, that would be very much useful for me.
Thanks again for taking the time to provide this service – it is invaluable for people such as I.
Kind regards
Pami
@ Pami,
I just got to know that your passport will be sufficient to register a business in Sri Lanka. No need of a National ID card.
Best wishes.
@ Eranda
That is great news. So I can take my overseas passport and register a business in SL as a local to operate under 100% ownership?
Do I need to show bank balances etc etc ??
Either way, I am on my way :)
Thanks again Eranda
I used to handle the Sri Lankan market for an American MNC out of its Singapore regional office in the 1980s. I fell in love with the island and always thought of it as the Pearl of the Indian Ocean. I promised myself that when the war is over I will bring my family to visit Sri Lanka and even start a small business here and possibly retire in Sri Lanka.
As a Chinese Singaporean can I start buy a home here in Sri Lanka and run a small business as a retirement job?
@ Anton,
Actually you have chosen a right time if you decided to do that. Next year will be ideal for you to do exactly that. I do not see any reason why you should not come here and run a business as your retirement. After all, the cost of living here is very low comparing with other countries.
Reach me through the contact page if you need any more specific assistance regarding your business here.
Dear Eranda:
This is an excellent website for understanding how to start a business in SL. It is brief, to the point and illuminating.
Can you tell me if there are any restriction by industries for foreigner starting a business in SL?
Anton
@ Anthony,
There are no restrictions for foreigners in 90% of the industries. As I said early a limited company can be started here with 100% foreign ownership not like most of the other Asian countries. If you are interested in opening a business relating to a specific industry, reach me via the contact page and I will find more details for you.
Wishing you all the best.
Dear Author,
Thank you for providing infomations on pre staring a business.
i want to star a business . If you could advice me what kind of businesses are profitable prestently in sri lanka. In order to star with some kind of details please
Thank you very much again
@ Farhan.
Service organizations tend to do well in Sri Lanka now a days. But any kind of business would be profitable if you do the basics right. Success does not depend on the type of business you are in but it will depend on your capabilities as a business person. Choosing a good business is one attribute of a good businessmen.
Dear Eranda,
Very useful information. Is there any webites that you know of that is looking for business partners in sri lanka.
Thanks
Im willing to start a business in Hatton/Nuwara Eliya region.
Please advice me the suitable business & the funding methods.
Thanks,
Praba
Please let me know that article of association and memorandum needed for an partnership business??
Hi guys,
I was working for a trading company and I quit last week,I wanna do my own business as part time while doing my studies. Initially, I need to register a company. Please advice me if anybody had experience on this and the steps I should follow, all I need at the moment is a company name and E mail address to start it.
Thnks,
Shaan.
Thanks a lot… I searched a lot to find how to register a Sole-trade or a Partnership. This is great.
I stay on rent.. Can I use my House address as the address for my Business registration.. and what will happen if I move into another province?
Yes, Your rented address can be used and you will have to notify the authorities when you change your location.
Hi Eranda,
If im to start up, from what sources can I get finacial help and is there a place in srilanka to go and get advice on sarting up a business… Will BOI help, or any particular bank…
Thank you
I am developing a website at the moment and hoping to register is as a partnership. Can my partner be a foreigner with the visa to work in Sri Lanka?
Thank you
Yes, I do not see any problem with that.
Dear,
My name is smith dare kayode,am citizen of nigeria.i ‘m plan to start business in sri lanka before i discover your site.i will like to know if i can process the business registration myself.
Looking to hear from you.
Smith
Yes smith, You may handle all the application work if you prefer.
Could a foreigner open a professional training center here. I mean sometyhing like providing education or visa service. what is the requirement for that ? Thanks for your attention
Dear Sir,
1st I would like to tell, this work is great and you all are doing some thing very rare but some selected people like us, needing these type of knowledge factory…this is great…………..
I HAVE five POINTS TO CLARIFY..
1. I am doing a sole trade business in silence(selling garment accessories to srilankan garment factories, taking orders from factories and get done by local printing plant and keep a margin for me and selling. ex. Printed tags, stickers, labels,)trust me this business is well for me and I am happy with it, but some times I am worried coz end of the day I am just a trader and I wont to be a manufacture now,
*SO PLEASE LET ME KNOW IF IAM STARTING A FACTORI (MANUFACTURING) WITH MY OWN MECHINE, IS THERE ANY NEW DOCUMENTATIONS TO DO FOR MY CURRENT BUSNESS?
2. I only paid some BTT as tax and I never paid income tax, coz I don’t know the procedure to tax register so give me the way to be a tax payer/
3. Do I need to be VAT register and let me know what key points for tax show in invoices are?
4.also I want to make my current company as a pvt.ltd coz I feel if so it will more prestige for our company, so what are the main criteria’s for do it?
If any possibility please let me know the government costs for the all documentation parts for my new company changing.
5. Will I have to change the bank accounts too if I make any amendments to my company name or can I link the same and amend the bank accounts to the same numbers.
May be my request is to lengthy but it would be great if you will clear my head with replying me,
Thanks a lot,
Malintha
Proprietor,
Excellence printing Lanka
I need to know how to register a partnership business…? is it need artcle of association or contract between partners to disclouse @ registration.? can U explain me steps to register business.?
Dear Malinth,
Your question covers a wide area so It will take an entire post to answer it properly. Please reach me through the contact page and I will give you my contact number. I will do my best to assist you.
Cheers for the excellent info.
dear Mr eranda , thank you for your wonderful information.i am an automobile spare parts manufacture ,whole seller ,exporter form India.as i am an Indian citizen can i start a business in srilanka with same formalities mentioned in this site.if you have any suggestions please tell me.once again thank you for your great work.
Yes, You can start a business here. And Sri Lanka have a good market for automobile spare parts.
what are the registration rates for sole trade business and partnership, and do I have to open an current account in the startup of the business
dear Eranda,
hope you can answere for my inquery
thanks
malintha
Hi Sir
Can i know from which place i can register my company (address and the name where i should get the forms , pay n register etc) . Logo, name and the company
Thanks for the very lovely article above ..really helpful
Dear Sir,
i am planning to import computers from Australia. i want to know the exact import procedure that i should follow and details regarding relevant documentation.
thank you
dear Sir,
i want to import some medical equipments from UK & Us .
could u please tell me, what should i do other than business registration for this.
please help me
thank you
Hi very informative website
We are form India and We wish to open a Sole Trade Business in Sri Lanka and we are interested to obtain a registration certificate for the same, we just want to register our firm as of this point and do not intend to start operation soon.
Can you provide reference to any person or firm/company who can assist us in registration we are ready to pay them the consultancy fees
Hi,
I shall be greatful if I can have a reply to my question:
I am an Indain national. I wish to start a company engaged in trading of constuction steel. i.e. I wish to import steel from India and sell it in Sri Lanka.
Can I open and run a sole ownership company in Sri Lanka?
Are there financial barriers for a non resident to set up business in Sri Lanka?
Wil I have to invest a certain amount of money in order to do business in the country?
Thanks,
Sunil Saigal
This is great,i have looked for ways to register on Sole-trade or a Partnership. Thanks for sharing this with us. This is a great information.
Yes, You can open your business as a sole trade and there is no minimum capital requirement for you. There are no financial barriers for you and there are many Indian banks operating here to assist your trade.
Great work and my heartiest congratulations to go ahead.You have done a great work as a human and as a sri lankan.Really I am so proud about you man.
I was searching on the net and fortunately i stopped here.Now my head is clear.No words to thank.
I will come back ASAP to see the site.
(I read all comments and I think that there are one or two comments mistakenly u have forgot to make replies.Think that u will kindly consider about it.)
exactly great work ..coz I also hope to start a construction enterprises & i was involved with lack of knowledge. after trough ur site I was inspired to study abut it
Very Useful information. Further Department for Sole Trade is located near Nawaloka Hospital, next to HSBC bank. Phone number is 011 2440187. You need only a copy of the National Identity card. Charges are 500 and it takes 2-3 weeks. Same day service is also available for a fee of Rs 1,000/=. Planning to go there and will give more information after that.
hi
Iam an Indian citizen
i plan to form a company in Srilanka
can anybody provide me details of some agency which can assist me for the same .
rgds
nair
Are there many restriction any for an englishman to start small a business with a Sri Lankan friend. If visiting for 4-6 months year, do I need a vias, and would tax be my responsibility or could it be covered through the business and my Sri Lankan business partner
Great work man.
Im willing to start a business in kegalle or anuradapura.
Please advice me the suitable business & the funding methods.
Post a Comment