Things That No One Talks About When Registering a Company in Sri Lanka

Starting a business in Sri Lanka? You’ve probably read about the essential steps—choosing a business structure, submitting paperwork, and getting approvals. But let’s be honest, the real challenges lie in the things no one talks about! Before you dive headfirst into registering your company, here are the insider secrets you need to know.

Your Business Name Might Not Be Yours (Completely!)

Getting your company name approved doesn’t automatically mean you own exclusive rights to it. While no one can register the exact same name, similar alternatives with the same meaning are fair game. Imagine registering FLOWERS (PRIVATE) LIMITED, only to find out later that names like FLOWER INTERNATIONAL (PVT) LTD and FLOWER INDUSTRIES (PRIVATE) LIMITED exist.

The fix? Trademark registration—but heads up, it’s a slow process (3–6 months). Also, securing your domain name and social media handles early can help protect your brand.

That Virtual Address Might Cause You Problems Later

Many foreign investors opt for virtual addresses for initial registration, but when it comes to customs registration, proving that you actually operate from that address is a long and complex process. Even though proof isn’t required at registration, you’ll need solid third-party evidence if you ever apply for customs clearance.

Bank Account Hassles—It’s NOT as Easy as You Think!

Opening a business bank account in Sri Lanka isn’t a straightforward process—especially for foreign investors. Get ready for lengthy documentation, including:

✔ Business Registration Certificate (BRC)
✔ Certified copies of Form 1 & Form 18
✔ Articles of Association (certified by the company secretary)
✔ KYC documents for all directors
✔ Initial deposit (Rs. 25,000 to Rs. 50,000)
✔ Physical verification of directors in many cases

And if you want internet banking, you’ll need a separate resolution and additional documentation!

Thinking About Foreign Directors? Here’s the Catch!

Sri Lanka allows foreign nationals to be company directors, but certain industries have restrictions. For instance, if you’re launching a restaurant that requires a liquor license, having a local director is vital.

Share Capital Can Dictate Your Business Possibilities

Many startups register their company with the minimum share capital (Rs. 10), but guess what? This can limit your eligibility for industry-specific licenses. For example, if you’re applying for a travel agency license, you’ll need Rs. 5,000,000 in share capital!

Compliance Isn’t Just a One-Time Thing

Registering a business isn’t the end of the journey—it’s just the beginning. Keeping your company legally compliant requires ongoing effort, including annual returns, financial reporting, and regulatory updates. Ignore these, and you might face hefty penalties or legal troubles.

Tax Obligations—Don’t Get Caught Off Guard!

From VAT to income tax, understanding your tax obligations early can save you from surprises later. Many entrepreneurs overlook proper accounting records, only to struggle during tax filing season. Consulting a tax advisor upfront is a game-changer.

Cultural Norms Matter More Than You Think

Doing business in Sri Lanka isn’t just about paperwork—building trust and relationships is key. Business negotiations often rely on personal connections, so understanding local etiquette can give you an edge.

Budget for Delays and Unexpected Costs

Processes take longer than expected, bureaucratic hurdles pop up, and hidden costs emerge out of nowhere. Always have a financial buffer to keep things running smoothly.

Want to Register a Company in Sri Lanka Hassle-Free? ASAC Can Help!

From navigating name registrations to handling compliance, ASAC’s expert company secretaries ensure you avoid costly mistakes and get registered efficiently. Contact ASAC today and make your business journey smooth!