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INDIVIDUALS & BUSINESS
01
TAX REGISTRATION FOR INDIVIDUALS IN SRI LANKA (June 8, 2023)
Subject to the provisions of Subsection 3 of Section 102 of the Inland Revenue Act, No. 24 of 2007, a gazette notification was issued making it mandatory for a few categories of individuals to open tax files (Register for Tax) at the Department of Inland Revenue with effect from June 1, 2023. Such categories are,
PROFESSIONS
1. Practitioners registered with the Sri Lanka Medical Council.
2. Members of the Institute of Chartered Accountants of Sri Lanka.
3. Members of the Institute of Certified Management Accountants of Sri Lanka.
4. Members of the Institution of Engineers Sri Lanka.
5. Members of the Association of Professional Bankers.
6. Members of the Sri Lanka Institute of Architects.
7. Members of the Institute of Quantity Surveyors Sri Lanka.
8. Attorneys-at-Law of the Supreme Court of Sri Lanka.
INDIVIDUAL BUSINESS OWNERS
9. Individuals who have registered their businesses in Divisional Secretariats.
OWNERS OF MOTOR VEHICLES
10. Individuals who are in possession of vehicles registered (other than three-wheelers, motorcycles and hand tractors) in the Department of Motor Traffic.
OWNERS OF LANDS AND BUILDINGS
11. Individuals who have purchased or acquired, by virtue of Deeds Transfer, of any immovable property in Sri Lanka on or after April 01, 2018.
12. Any individual who obtains approval for a building plan from a local authority.
EMPLOYEES
13. Employees whose monthly contribution from both employee and employer to any Provident Fund is more than Rs. 20,000.
INDIVIDUAL SERVICE PROVIDERS
14. An individual who receives payments of Rs. 100,000 per month or Rs. 1,200,000 for a 12-month period for providing any services in Sri Lanka.
Are you above 18 years of age?
With effect from January 1, 2024, every individual who is 18 years of age or older as of December 31, 2023, should register for tax even if he or she does not belong to any of the above-mentioned categories.
Any individual who reaches the age of 18 on or after January 1, 2024, should register for tax after attaining the age of 18.
If you fall into any of the above categories, you have to register for tax and relevant tax types as applicable on or before the relevant due dates as mentioned in the gazette notice.
02
NGO REGISTRATION IN SRI LANKA​ (November 24, 2022)
Background
According to the National Secretariat for Non-Governmental Organizations, some basic characteristics of an NGO shall be as follows,
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It should be non-Governmental (Independently operating from the Government).
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There shall be no profit-earning motive.
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It should not share any surplus funds earned or received among its members.
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Its Constitution and other activities should be within the legal framework and social values of Sri Lanka.
NGOs in Sri Lanka are governed by the National Secretariat for Non-Governmental Organizations and Voluntary Social Services Organizations (Registration & Supervision) Act.
Legal Mode of the Registration
Company Limited by Guarantee (Guaranteed Limited Company) is the formal legal mode of registration for NGOs in Sri Lanka.
The Registrar of Companies issues the incorporation certificate for Guarantee Limited Companies, and it is the most recognized type of registration that you can have in Sri Lanka for your NGO.
Now you have two options to continue your Guaranteed Limited Company registration under the Companies Act in Sri Lanka.
Section 32
Organizations registered under this section should use LIMITED, LTD or (GUARANTEE) LIMITED at the end of the name of the Company.
Section 34 (Recommended)
Organizations registered under this section do not require to use LIMITED, LTD or (GUARANTEE) LIMITED at the end of the name of the Company. This option helps to demonstrate the non-profit motive of the organization.
Before the registration and after the name reservation, applicants under Section 34 should publish a notice in a national newspaper including its objects and inviting objections to the registration application. Section 32 applications do not require this notice.
Facts to know before registering a Company Limited by Guarantee in Sri Lanka.
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Organization should specify the objects, rights and obligations of the members, management, and administration provisions of the organization in its Articles of Association.
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It should have a minimum of two directors in the Board.
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It should have a qualified person as the Company Secretary.
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Members should specify the amounts of contribution to the assets of the company, in the event of the Company being put into liquidation.
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It should Annually submit its Audited Account to the Registrar of Companies.
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The Company should include the following clause in its Articles of Association,
“The Foundation being a “Voluntary Social Service Organization” as defined under the Voluntary Social Service Organization (Registration and Supervision) Act, shall take steps to register under the said Act after incorporation.”
Steps to Register a Company Limited by Guarantee (NGO) in Sri Lanka
1.Name Reservation
You must apply for the proposed name as the initial step to start the registration.
Special Note
Draft Articles of Association should be submitted along with the name application.
2.Public Notice (Applicable only for Section 34 Applications)
A notice as discussed above should be published in a national newspaper inviting objections from the public if any. A minimum period of 3 weeks (21 Days) should be given for the objections filing.
3.Preparation of Forms
The below forms should be prepared through the EROC system. Address on the Company, details of members, directors and the secretary should be included accurately in this step.
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Form 05 – Application
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Form 18 – Consent of initial director/s
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Form 19 – Consent of the initial secretary
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Articles of Association
4.Submission of Forms
Scanned Forms with signatures should be submitted to the Registrar along with the payment as the last step of the registration.
Registration at National Secretariat for Non-Governmental Organizations
Immediately after receiving the registration from the Registrar of Companies, the organization need to be registered under the National Secretariat for Non-Governmental Organizations to continue its functions as mentioned in the Articles of Association.
This registration may be required to open Bank Accounts and get the Tax Registration for the Company.
You can apply for this online through the website of the National Secretariat for Non-Governmental Organizations in Sri Lanka.
We are here to assist you are looking forward to registering an NGO in Sri Lanka, a Company Limited by Guarantee.
03
HOW TO REGISTER AN OVERSEAS COMPANY IN SRI LANKA
Background
Aspiring to bring Foreign Direct Investments (FDI) to Sri Lanka?
If you could find out a Foreign Company (a Company already registered in a foreign country) which interests to invest in Sri Lanka, you can form an Overseas Company in Sri Lanka.
An Alternative – Form a Fresh local Company in Sri Lanka with a majority or 100% foreign shareholding. Foreign Company/s or foreign individual/s can be the shareholders of the local Company.
Thinking that the Registration of an Overseas Company in Sri Lanka is a complicated Process? Here you can find out the detailed guide to making it a reality.
Types of Overseas Companies allowed to register in Sri Lanka
1.Branch Office – To engage in revenue-generating activities. (Restrictions applied)
2.Liaison Office – To engage in any non-commercial, non-trading, or non-industrial activity such as coordinating group operations.
Restrictions for Foreign Direct Investments through Overseas Companies in Sri Lanka
Below commercial, trading, and industrial activities are not permitted to be carried out by an Overseas Company.
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Money lending (other than the branches of foreign banks registered in Sri Lanka under the Banking Act, No. 30 of 1988)
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Pawn broking
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Retail trade where the capital contributed by persons resident outside Sri Lanka is less than USD 5 million after such investment
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Coastal fishing (as defined by the Minister to whom the subject of fisheries is assigned)
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Growing and primary processing of tea, rubber, coconut, and rice
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Mining and primary processing of non-renewable national resources
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Freight forwarding
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Shipping agency business
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Mechanized mining of gems
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Lotteries
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The below activities are permitted to be conducted with the prior permission of the relevant legal or administrative authority established by the Government of Sri Lanka.
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Production of goods where Sri Lanka’s exports subject to internationally determined quota restrictions
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Growing and primary processing of sugar, cocoa, and spices
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Timber-based industries using local timber
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Deep sea fishing (as defined by the Minister to whom the subject of fisheries is assigned)
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Mass communication
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Education
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Outbound travel agency business
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Local air transportation
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Any industry manufacturing or producing
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Arms, ammunitions, explosives, military vehicles and aircraft equipment, and other military hardware
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Poison, narcotics, alcohol, dangerous drugs, and toxic hazardous or carcinogenic material
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Currency, coins, and security documents.
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Documents to register an Overseas Company in Sri Lanka.
Get ready the below documents to register your Overseas Company.
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Form 44 – Full Address of the Registered or Principal Office of a Company Incorporated Outside Sri Lanka and its Principal Place of Business Established in Sri Lanka.
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2.For 45 – List and Particulars of the Directors of a Company Incorporated Outside Sri Lanka with a Place of Business Established in Sri Lanka
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Form 46 – List of the Names and Addresses of Persons Resident in Sri Lanka Authorized to Accept Service on Behalf of a Company Incorporated Outside Sri Lanka with a Place of Business Established in Sri Lanka.
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A certified copy of the Articles of Association or the Memorandum of the Company.
Minimum Investment for Overseas Companies
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In the case of a Branch Office, USD 200,000 or an equivalent amount in any other designated foreign currencies.
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2.In the case of a Liaison Office, required funds for the setting up and maintenance of such a place of business in Sri Lanka.
References
Extraordinary Gazette No. 2213/35 – Wednesday, February 03, 2021.
We are here to assist you if you are looking forward to registering an Overseas Company in Sri Lanka.
04
HOW TO REGISTER A COMPANY IN SRI LANKA (October 11, 2022)
COMPANY REGISTRATION PROCESS IN SRI LANKA
From this post, anyone can clearly learn how to register a Company is Sri Lanka. The Department of Registrar of Companies has recently introduced “eROC” system from where any person can register a without visiting the Department. Now the entire registration process including making payments can be done via the website (www.drc.gov.lk) of the department.
How to Create an Account
Go to the https://eroc.drc.gov.lk/home/search Click Login and Click Register.
Then go through the steps and finish the process.
After successfully creating the account, you can now login to your account by giving the email and password that you provided in the account creation process.
Steps to Register a Company in Sri Lanka
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Step 1 – Name Reservation
After login to the account, click “Name Reservation” on your left side menu. Then the following window will appear.
First select your Company type and enter your suggested name. (To enhance the search results, before your click the search button, select the Contains option instead of Begin with option)
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If you name is already registered, following message will appear.
“THIS NAME ALREADY EXISTS AND CANNOT BE RESERVED, PLEASE ADD A WORD AND TRY AGAIN!!”
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If there are similar names that contain your suggested words, those names will be listed down in the window.
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If your name is available, you can proceed and make the payment for the name reservation.
Step 2 – Filling
Details and Preparing Registration Forms
After you received the name approval by the Department, you can see the name in your dashboard. Now you can click the incorporate button and in the first window you have to fill the details of your proposed registered address, email of the Company and objectives of the Company.
Click next to go to the stakeholders window.
This is the most important point that you have to include details of your shareholders, directors and secretary to the Company.
You can add the details of stakeholders one by one.
IMPORTANT – COMPANY SECRETARY
Option 1 – You can have a Company director as a Secretary if you have more than one directors in the Company.
Option 2 – You can appoint a third party individual (Qualified or Unqualified) as the Company Secretary.
Note – A Company should have a QUALIFIED SECRETARY if it meets one or both of the following Conditions,
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Annual Turnover of LKR 1 Million or more.
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Stated Capital of LKR 500,000 or more.
Step 3 – Download Documents
Click next and download Form 1, Forms 18’s and Form 19 from the next window.
Apart from above forms, Articles of Association need to be prepared by you or your Company secretary.
Step 4 – Upload Documents
Go to the Upload Documents Window and upload signed scanned documents. (Documents should be in A4 size and should be in PDF format and maximum size allowed for each document is 4MB.
Step 5 – Making the Payment
Once you uploaded all forms, you can go to the payments window (skip the optional 2 windows) and enter your card details. After making the payment you will receive a receipt to your registered email.
WE ARE READY TO SUPPORT TO REGISTER YOUR COMPANY
You can now register your Company at Cost without wasting your time and money.
As a registered qualified Company Secretary in the Department of Registrar of Companies, we can help you in the above process and thereafter in all corporate secretary undertakings such as,
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Preparing and filing Annual Returns
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Preparing Board Resolutions
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Coordinating meetings of directors and maintaining minutes of meetings.
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Liaising with Banks, Government Authorities.
