How to Incorporate a Company in Sri Lanka (2026)

To incorporate a company in Sri Lanka, reserve your name on the eROC portal, appoint a licensed company secretary, submit Form 1, Form 18 and Form 19 with your Articles of Association, pay the fees online, and complete the mandatory Beneficial Ownership filing at bo.drc.gov.lk. Incorporation is not complete until the BO forms are submitted.

Companies are incorporated under the Companies Act No. 7 of 2007, as amended by the Companies (Amendment) Act No. 12 of 2025.

Why Incorporate a Private Limited Company?

• Limited liability – your personal assets are separate from company debts
• Credibility with banks, investors and corporate customers
• Transferable ownership through shares
• Perpetual succession – the company survives changes in ownership
• No minimum share capital required

On tax: the standard corporate income tax rate in Sri Lanka is 30%. A concessionary 15% rate applies to qualifying service exports and foreign-source income received in foreign currency and remitted through a bank. Betting, gaming, liquor and tobacco are taxed at 45%. Incorporating does not by itself reduce your tax rate.

Company Types in Sri Lanka

Section 201 of the Companies Act requires every company to have at least one director, and a public company at least two. A company may have a single shareholder.

Note: Sri Lanka does not have a “One Person Company” structure. A single individual can be both sole shareholder and sole director of a private company, which achieves the same result.

Step 1: Reserve Your Company Name

Search and reserve on the eROC portal.

• The name must not be identical or deceptively similar to an existing company
• It must end with the correct suffix for your company type
• Words such as “National”, “Sri Lanka”, “Municipal” and “Chamber of Commerce” require specific approval
• Have two or three alternatives ready

Reservation is valid for a limited period, so move promptly to the next steps.

Step 2: Appoint a Licensed Company Secretary

This is a legal requirement under the Companies Act, not an optional extra. Your incorporation will be rejected without it.

Key rules:

• The secretary must hold a valid Certificate of Practice issued by the Department of the Registrar of Companies
• The secretary must be resident in Sri Lanka — an overseas-based foreign national does not qualify
• A sole director cannot also act as company secretary
• In a company with two or more directors, one director may act as secretary if they hold the Certificate of Practice

If you are a single founder, you must engage an external company secretary.

Step 3: Prepare Your Documents

All forms must be typed and uploaded as PDF. Handwritten forms are rejected.

You will also need directors’ NIC copies and proof of the registered office address.

Foreign shareholding: certified passport copies for foreign directors and shareholders, plus a trilingual company name in the Articles.

BOI projects: submit draft Articles to the Executive Director (Legal) at the Board of Investment for approval before incorporating.

Step 4: Submit and Pay on eROC

File everything electronically and pay by card through the portal.

Budgeting: government fees for a standard single-director company have recently run to roughly LKR 13,000 to 16,000 inclusive of VAT, covering name reservation, Forms 1, 18 and 19, and the Articles.

Two points that catch people out:

• VAT is 18%, not 8%. Any guide quoting 8% is out of date.
• The Companies (Fees) Orders were re-gazetted on 6 July 2026 under Special Gazette No. 2496/03. Check the current schedule on drc.gov.lk before you budget.

Professional fees for company secretarial services are separate and additional.

Step 5: Complete the Beneficial Ownership Filing

Since 30 March 2026, this is mandatory. Incorporation is not treated as complete without it.

What it is: under the Companies (Amendment) Act No. 12 of 2025 and the Companies (Beneficial Ownership) Regulation No. 1 of 2026, companies must disclose the natural persons who ultimately own or control them.

Who counts as a beneficial owner: a natural person who directly or indirectly holds or controls 10% or more of the shares or voting rights, or who otherwise exercises effective control.

How to file:

1. After paying incorporation fees on eROC, go to the separate BO portal at bo.drc.gov.lk
2. Log in using your eROC credentials
3. Submit Form BO5 and Form BO1

Already have a company? Companies incorporated before the Act came into operation must submit beneficial ownership information within six months of the operative date. Subsequent changes must be reported within 14 working days or with the annual return.

The Registrar maintains a separate BO registry accessible to the Attorney General, the Financial Intelligence Unit, the Inland Revenue Department and Customs.

Step 6: Post-Incorporation Obligations

Public notice – publish notice of incorporation as required under the Companies Act.

Accounting records – Section 148 requires records that accurately record and explain transactions, kept in Sri Lanka.

Annual return – file your first return within 18 months of incorporation, then annually. Late filing attracts penalties of up to LKR 100,000 for the company and LKR 50,000 for officers in default.

Registrations After Incorporation

EPF is not “5 or more employees.” It is mandatory for the first employee, with limited statutory exceptions. Getting this wrong exposes you to penalties.