How to Register a Business in Sri Lanka: 2026 Guide

Sri Lanka offers three common business structures. Sole proprietorships and partnerships register a business name at the Divisional Secretariat under provincial business names legislation. Private limited companies are incorporated with the Department of the Registrar of Companies through the eROC portal at eroc.drc.gov.lk, under the Companies Act No. 7 of 2007 as amended.

Since 30 March 2026, company incorporation also requires a separate Beneficial Ownership filing. More on that below – it now catches existing companies too.

Choosing a Structure

A private limited company requires at least one shareholder and one director (who may be the same person), a qualified company secretary, and a registered office address in Sri Lanka. There is no minimum share capital.

Registering a Sole Proprietorship

1. Obtain the application form from your Divisional Secretariat. Available in Sinhala, Tamil and English.
2. Complete it and obtain a report from your Grama Niladhari confirming the business address.
3. Assemble supporting documents – completed form, Grama Niladhari report, NIC copy, proof of address, photographs.
4. Certify and submit at the Divisional Secretariat business registration counter, and pay the prescribed fee.
5. Collect your certificate.

Registration is generally required within 14 days of commencing business. Requirements and fees vary between provinces, so confirm with your own Divisional Secretariat.

Registering a Private Limited Company

Step 1 – Reserve the name

Search and reserve at eroc.drc.gov.lk. The name must end in “(Private) Limited” or “(Pvt) Ltd” and must not be identical or deceptively similar to an existing company. Words such as “National,” “Sri Lanka,” “Municipal” and “Chamber of Commerce” need specific approval. Reservation is valid for a limited period, so have two or three alternatives ready.

Step 2 – Appoint a company secretary

This is a legal requirement, not an optional service. Form 19 must be signed by a qualified company secretary, and a sole director cannot also act as secretary. Appoint one before you begin the filing.

Step 3 – Prepare the documents

• Form 1 (Section 4) – company name, type, registered address, shares, directors and shareholders
• Form 18 (Section 203) – Consent and Certificate of Director, one per director, signed personally
• Form 19 (Section 221) – Consent and Certificate of Company Secretary
• Articles of Association

Forms must be typed and uploaded as PDF. Handwritten forms are rejected. Foreign-owned companies additionally need certified passport copies for foreign directors and shareholders, and a trilingual company name in the Articles.

Step 4 – Submit and pay through eROC

Fees are paid online by card. Government fees for a standard single-director company have recently run to roughly LKR 13,000 – 16,000 inclusive of VAT, covering name reservation, Forms 1, 18 and 19, and the Articles.

Check current fees before you budget. VAT applies at 18%, and the Companies (Fees) Orders were re-gazetted on 6 July 2026 under Special Gazette No. 2496/03. The published schedule on the DRC website is the only reliable source.

Step 5 – Submit the Beneficial Ownership forms

Incorporation is not complete until this is done. See below.

Step 6 – Post-incorporation

Publish notice of incorporation as required under the Companies Act, and file your first annual 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.

Beneficial Ownership: What Changed in 2026

Under the Companies (Amendment) Act No. 12 of 2025 and the Companies (Beneficial Ownership) Regulation No. 1 of 2026, companies must identify and disclose their beneficial owners to the Registrar.

A beneficial owner is 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.

New companies: from 30 March 2026, after paying incorporation fees on eROC, log in to the separate BO portal at bo.drc.gov.lk using your eROC credentials and submit Form BO1 and Form BO5. Failure to do so results in the incorporation being resubmitted.

Existing companies: companies incorporated before the Act came into operation must submit beneficial ownership information within six months of the operative date. If your company was registered before 2026, this applies to you, and the window is limited. Changes to beneficial ownership must subsequently 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.

After Registration of Your Business

TIN – for companies, a Taxpayer Identification Number is now generated automatically on incorporation through eROC.

VAT – registration is mandatory where taxable supplies exceed Rs 15 million in any taxable period or Rs 60 million in any 12 months. The 2026 Budget proposed reducing the annual threshold to Rs 36 million, but this was dropped: the VAT (Amendment) Act No. 14 of 2026, certified 30 June 2026, retains Rs 60 million. The standard rate is 18%. There is no registration fee.

Note that the Simplified VAT (SVAT) scheme has been abolished, and separate rules now apply to non-resident digital service providers.

SSCL – Social Security Contribution Levy registration follows the same turnover thresholds as VAT.

EPF and ETF – mandatory from your first employee, not from five. Submit Form D to the Labour Department within 14 days of hiring. Contributions are 12% employer and 8% employee to EPF, plus 3% employer to ETF. ETF is remitted under the same EPF registration number.

Trade licence – obtained from your local authority (Municipal Council, Urban Council or Pradeshiya Sabha). Fees vary by council and business type.

Exporters – register with the Sri Lanka Export Development Board and Sri Lanka Customs. Board of Investment approval may be relevant depending on the project.