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Complete guide: entity types, registration, costs, taxes, labor laws, and break-even analysis
~50 days
Setup Time
~$195
Setup Cost
30%
Corporate Tax
100%
Foreign Ownership
#99
Ease of Business
| Entity | Min Capital | Foreign % | Liability | Min Shareholders | Best For |
|---|---|---|---|---|---|
Private Limited Company (Pvt Ltd) පුද්ගලික සමාගම | None | 100% | Limited | 1 | Most common for foreign investors - no minimum capital, full ownership allowed in most sectors via BOI |
Public Limited Company (PLC) | None | 100% | Limited | 7 | Companies planning to list on the Colombo Stock Exchange |
Branch Office | None | 100% | Unlimited | 0 | Foreign companies extending operations to Sri Lanka without a separate entity |
BOI-Approved Enterprise | None | 100% | Limited | 1 | Investors seeking BOI incentives - tax holidays, duty exemptions, and streamlined approvals |
Reserve Company Name
Apply for name approval at the Department of Registrar of Companies online portal
1-2 days
~$5
Department of Registrar of Companies (DRC)
File Incorporation at DRC
Submit articles of association, director details, registered address, and pay registration fees
2-5 days
~$60
Department of Registrar of Companies (DRC)
Register with BOI (if applicable)
Submit investment proposal to the Board of Investment for approval and tax incentive eligibility
7-21 days
~$100
Board of Investment of Sri Lanka (BOI)
Register with Inland Revenue Department
Obtain TIN and register for income tax and VAT with the Inland Revenue Department
3-7 days
Free
Inland Revenue Department (IRD)
Register with EPF and ETF
Register employees with the Employees' Provident Fund and Employees' Trust Fund
2-5 days
Free
Central Bank / Labour Department
Obtain Business License
Apply for the relevant trade or business license from the local Municipal Council
3-10 days
~$30
Municipal Council / Pradeshiya Sabha
$80/mo
Minimum Wage
$250/mo
Average Wage
45 hrs/week
Work Hours
14 days/year
Paid Leave
2.5 weeks/year
Severance
15% of salary
Employer Social Security
10% of salary
Employee Social Security
Required
Foreign Worker Permit
Work Permit Process: Employer applies through the Department of Immigration and Emigration. BOI companies receive expedited processing for foreign staff.
#99/190
Ease of Business Rank
9 days
Starting a Business
51 days
Registering Property
1318 days
Enforcing Contracts
36/100
Corruption Perception
52%
Internet Penetration
LKR
Currency
UTC+5:30
Time Zone
11
Retail (months)
9
F&B (months)
15
Tech (months)
20
Manufacturing (months)
7
Services (months)