Foreigners Incorporating a Company in Sri Lanka
COMPANY REGISTRATION & SECRETARIAL SERVICES
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Restrictions on foreigners incorporating a company in Sri Lanka
If there are any non-citizens involved as shareholders of the proposed organization, it is highly advised that they thoroughly examine the exchange control laws and regulations before the formation of the company. The below mentioned restrictions are applicable for any foreign investments in Sri Lanka
Areas Fully Restricted For Sri Lankans Only
Foreign investment is blocked in below furnished areas.
- Coastal Fishing
- Pawn Broking
- Provision of Security Services
- Money lending, other than in the business of acting as margin providers under Securities Exchange Act.
- Retail trade investment with financing of lesser than 1 Million US Dollars
Areas Reliant on Conditional Approval
Foreign investments in the sectors supplied below are passed restricted to 40%. Any foreign holding in surplus of 40% is sanctioned by the Board of Investments of Sri Lanka (BOI) on a case-by-case basis.
- Travel agencies
- Mass communication
- Freight forwarding
- Shipping agencies
- Growing and primary processing of tea, rubber, coconut, cocoa, rice, sugar and spices
- Timber based industries using local timber
- Mining and primary processing of non-renewable national resources
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Foreign investments in the zones mentioned down are permitted by the BOI or relevant government agencies. The BOI helps investors by alluding applications to the respective agencies. The approval process is generally uncomplicated.
- Coastal shipping
- Large scale mechanized mining of gems
- Air transportation
- Industrial endeavor in the 2nd schedule of the Industrial Promotion Act No. 46 of 1990, specifically any industry producing explosives, arms, military vehicles, ammunitions, military hardware and aircraft as well as any industry making hazardous or carcinogenic materials, poisons, dangerous drugs and toxic, alcohols and narcotics; plus any industry creating security documents, coins or currency.
Even-though it is not deemed as essential legally, it is advisable that foreigners seek the prior permission of the BOI to ease administrative and legal hurdles in forming a company and receiving other approvals required from the respective government agencies.