How to register a small business in Sri Lanka?

Despite its small size, many foreign nationals flock to Sri Lanka to begin their ideal life as entrepreneurs. This is because this idyllic nation has something to offer for everyone, from its diverse natural features to its small, but artistic cities, Sri Lanka is right in the middle of an economic turn. Meaning that you have many potential benefits to reap if you register your business here.

Business registration in Sri Lanka is under the rule of the Registrar of Companies. Their address is as below:

Registrar of Companies

400 McCallum Rd

Colombo 01000

However, you will not need to visit this department in person if you are not in the country, instead, you may use their website to register your business online. Small businesses in Sri Lanka can be registered either as limited liability company or as a sole proprietorship. Either way, you will need to have it registered online.

Life in Sri Lanka

Unless you have lived here prior to your business registration, life in Sri Lanka will be new to you as a foreign national. With its history of occupation and colonization from the Portuguese to the British and the Greeks even before that, Sri Lanka has many unique stories to tell.  In terms of daily life, Sri Lanka has three official languages; Sinhala, Tamil and English. While all three are spoken, Sinhala is the most common language used. This is especially in the case of living away from the city. Therefore, if you are to register a business outside main cities such as Colombo and Kandy, it is best to learn the local language.

For other aspects of daily life, you will be pleased to find that fresh produce and local ingredients are cost effective and healthy. Weather and climate wise, Sri Lanka is tropical and is subject to sudden rain at any time.

Small business ideas

Depending on where you live in Sri Lanka, different business ideas will be more suited than others. As such, below are ideas best suited for different cities in Sri Lanka.

For Colombo

Colombo is the commercial capital of Sri Lanka and is as such, the busiest city. Easily the most modern in terms of infrastructure and culture, the Colombo business climate is fast paced.

Online financial consultant services

If you are a certified financial consultant, you may kick start your business in Sri Lanka by setting up an online service. Colombo is now a hub for new entrepreneurs who require financial advice, by being available online, you ensure that your services can be reached by many.

Freelance writer

If you’ve got a flair for words, a freelance writing career could be the one for you. By building up a portfolio of pieces, you will be happy to know several blogs and magazines in Colombo are always looking for fresh talent.

For Galle

A seaside city filled with Dutch architecture; Galle is one of Sri Lanka’s tourist powerhouses.

Cafés

As Galle sees masses of tourists almost every day, cafés never go out of business. To set yourself apart from other cafés in the city, you can add a fresh twist such a making a themed café. Examples of themed cafés are: Harry Potter cafés, Football themed cafés or 80s rock themed cafés

Photographer

Full of scenic beaches and gorgeous architecture, many people would like to preserve their moment in Galle, thus, as a photographer you can flourish by renting your services on an hourly basis.

For Nuwara Eliya

Nuwara Eliya is a town in central Sri Lanka. Full of tea plantations and British architecture, Nuwara Eliya enjoys both visiting tourists as well as their own town population.

Book shops

A privately-owned book shop will always attract both tourists and locals alike. Especially if you are able to stock the current best sellers.

Wedding planning

As Nuwara Eliya also has its own local population, wedding planning services are always welcome and needed.

Steps toward small business registration in Sri Lanka

Business registration in Sri Lanka is a fairly straightforward. It comprises of only five main steps.

Step 1- Company name

This step is of utmost importance as one of the first impressions of your business will be formed based on its name. To check if the name you want is available, you may conduct a search on their website. Then, you may reserve your name for a fee of LKR 2300.

You will then receive a name approval number.

Step 2- preparation of documents

Next, ensure that you have all the other documents ready at hand:

Completed company registration form- Form 1 (Section 4(1) of Companies Act No. 7)

Requires these documents and details:

• Business name
• Type of business
• Registered address
• Names of directors’ names + passport copies
• Number and details of shareholders
• Details of the secretary

Completed directors’ details form- Form 18 (Section 203 of the Companies Act No. 7)

Requires these documents and details:

• Directors’ names
• Directors’ occupations
• Their address
• Their passport number
• Their email and phone number
• The date of their appointment

Form 19- the consent form from the secretary.

Your articles of association.

Step 3- Registering online

Submit the documents online. In addition, you will need to attach name approval number as well.

Step 4- Payment of fees

Now, you will have to pay the following fees:

• Name search: LKR 1000
• Form 1: LKR 10
• Form 18: LKR 5
• Form 19: LKR 5
• Registration of Form 1: LKR 15000
• Registration of Form 18 &19: LKR 1000
• Registration of Articles of Association: LKR 1000

Do note, you will have to pay an additional 12% of these charges as VAT.

Step 5- Announcing your business on a public forum

The final step to register a business in Sri Lanka is to announce it on a public forum. Usually a newspaper will suffice. This advertisement/announcement can be as big or small as you like. However, it must include your business registration number and your registered address.