How to start a Business in Sri Lanka
Tuesday, December 14, 2010
, Posted by lanka matha at 5:52 AM
Starting a business varies from place to place. Unlike other countries, Sri Lanka is more open. Easy going formalities allow anyone to invest easily in this island. At present Sri Lankan economy is blossoming quite easily due to lax taxes and red tape which have been driving businessmen quite crazy for a long time. This page provides a valuable infomation how to start a buinsess in sri Lanka.
Investment doesn't offer your very immediate returns, but it steadly grows as time pass through. Few of the most successful sectors in Sri Lanka which I recommand is: Garment Technology, Tea Industry, Rubber Industry, Software Development and Call Center Operations.
As many as more than thousands of investers from globe shown sufficient interest in this small Island. The reason behind this a few and to point out i.e. High literacy rate 97%, English Speaking public, considerably cheap telecommunication
1. Talk to the Sri Lanka Board of Investment.
2. Prepare your business porposal.
3. Register your business with Goverment firm.
4. Find a business consultantant locally
5. Promote your business ideas throguh local media.
6. Create demand for your product and services worldwide.
7. analyse your income progress
8. have a continous improvement procedurs
3. Register your business with Goverment firm.
4. Find a business consultantant locally
5. Promote your business ideas throguh local media.
6. Create demand for your product and services worldwide.
7. analyse your income progress
8. have a continous improvement procedurs
Tips
Do not look for adhoc advice. Listen to professional advice instead. You shall talk to us if you need more assitant in finding way to invest. It's also a good idea to have business tycoons help set up your business.
Warnings
Always do a feasible study before doing any investment.
This table summarizes the procedures and costs associated with how to start a business in Sri Lanka .
Registration Requirements:
No: Procedure Time to complete: Cost to complete:
1 Apply for approval name 3 days LKR 350 + 15% VAT
2 Register at the Companies Registry 3 days LKR 9550 + 15% VAT for registration fee (form 1) + LKR 350 + 15% VAT for each of the forms: 18 & 19
3 Register with tax authorities to obtain a TIN 2 days no charge
4 Register with Department of Labor to obtain EPF and ETF registration 1 day to file and approximately one month for the ETF and EPF numbers to be issued no charge
1 Apply for approval name 3 days LKR 350 + 15% VAT
2 Register at the Companies Registry 3 days LKR 9550 + 15% VAT for registration fee (form 1) + LKR 350 + 15% VAT for each of the forms: 18 & 19
3 Register with tax authorities to obtain a TIN 2 days no charge
4 Register with Department of Labor to obtain EPF and ETF registration 1 day to file and approximately one month for the ETF and EPF numbers to be issued no charge
Procedure 1 (Apply for approval name)
Time to complete – 3 days
Cost to complete – LKR 350 + 15% VAT
Comment – The reservation is valid for 3 months
Cost to complete – LKR 350 + 15% VAT
Comment – The reservation is valid for 3 months
Procedure 2.(Register at the Companies Registry)
Time to complete:3 days
Cost to complete:LKR 9550 + 15% VAT for registration fee (form 1) + LKR 350 + 15% VAT for each of the forms: 18 & 19
Comment:
A company may draft or adopt the standard set of articles of association in Table A of the Companies Act of Sri Lanka, No.3 of 2007. Professional charges are higher for drafting new articles of association than for adopting the standard articles.
Cost to complete:LKR 9550 + 15% VAT for registration fee (form 1) + LKR 350 + 15% VAT for each of the forms: 18 & 19
Comment:
A company may draft or adopt the standard set of articles of association in Table A of the Companies Act of Sri Lanka, No.3 of 2007. Professional charges are higher for drafting new articles of association than for adopting the standard articles.
According to the Companies Act No.3 of 2007 the articles of association must be submitted in duplicate to the Registrar of Companies with the balance of documents for incorporation. No prior approval from the Registrar General of Companies is required for the articles of association. According to the new Companies Act, notary publics are no longer required to witness the signing of the articles of association.
A flat fee of LKR 9550+ 15% VAT is charged as registration fee (Form 1), and LKR 350 + 15% VAT is charged of the other two forms 18 and 19 and the articles of association. The certificate of incorporation will be received in about 3 days.
Under the new Companies Act, it is no longer required to confirm the principal directors and the situation of the registered office of the company within 14 days of incorporation. Moreover, the common seal was rendered optional.
Procedure 3.(Register with tax authorities to obtain a TIN)
Time to complete:2 days
Cost to complete:no charge
Comment:
The applicant or an authorized representative of the applicant must be physically present at the Inland Revenue Department to pick up and complete the application for a TIN number. The taxpayer identification number (TIN) and the VAT registration number (temporary) can be obtained in a day. To obtain permanent VAT registration, the applicant must submit documents proving turnover of LKR 500,000 over 3 months. This is done along with income tax registration. The procedure takes 1–3 days.
Cost to complete:no charge
Comment:
The applicant or an authorized representative of the applicant must be physically present at the Inland Revenue Department to pick up and complete the application for a TIN number. The taxpayer identification number (TIN) and the VAT registration number (temporary) can be obtained in a day. To obtain permanent VAT registration, the applicant must submit documents proving turnover of LKR 500,000 over 3 months. This is done along with income tax registration. The procedure takes 1–3 days.
Procedure 4.(Register with Department of Labor to obtain EPF and ETF registration)
Time to complete:1 day to file and approximately one month for the ETF and EPF numbers to be issued
Cost to complete: no charge
Comment:
Companies must register with two funds, the Employees Provident Fund (EPF) and the Employees Trust Fund (ETF). Both funds are government-owned and maintained by the Central Bank. To register with these funds, the employer must visit the Ministry of Labor and complete relevant forms. Companies must also pay gratuities to employees that have been employed for more than 5 years. The gratuity provisions do not apply to companies that have fewer than 15 employees. There is no pension scheme for private sector employees. Businesses that engage in activities of a dangerous nature should obtain special Factories Ordinance checkups.
Cost to complete: no charge
Comment:
Companies must register with two funds, the Employees Provident Fund (EPF) and the Employees Trust Fund (ETF). Both funds are government-owned and maintained by the Central Bank. To register with these funds, the employer must visit the Ministry of Labor and complete relevant forms. Companies must also pay gratuities to employees that have been employed for more than 5 years. The gratuity provisions do not apply to companies that have fewer than 15 employees. There is no pension scheme for private sector employees. Businesses that engage in activities of a dangerous nature should obtain special Factories Ordinance checkups.
The issuance of ETF and EPF numbers may sometimes take 4–6 months. However, a number is assigned to the company upon application. Accordingly, the company has fulfilled its obligation and may remit monies to the department for ETF and EPF registration under the assigned number.
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