SRI LANKA Law and Practice Contributed by: Ayanthi Abeyawickrama, Varners
Overseas Companies Foreign companies may also establish a branch office, a project office or a liaison office in Sri Lanka. A branch office is permitted to carry out commercial activities similar to that of the parent company, and a project office is for carrying out a particular project by the parent company; how - ever, both of these require a minimum inward remittance of USD200,000. A liaison office, by contrast, does not have any minimum invest - ment requirement, but is restricted to non-profit- generating activities such as communications, market research and co-ordination (ie, it cannot engage in trade or revenue-generating opera - tions). Offshore Companies For doing business within the Colombo Port City Special Economic Zone, entities must register with the Colombo Port City Economic Commis - sion and operate in accordance with the pre - scribed rules for businesses within the zone. The Colombo Port City regime permits 100% foreign ownership and provides for a simplified regis - tration process tailored to international service- oriented businesses. 3.2 Incorporation Process Incorporating a company in Sri Lanka under the Companies Act, No 7 of 2007, involves a series of procedural steps and generally takes between seven and 14 working days, depending on the complexity of the structure and the efficiency of document submission. The process begins with the reservation of a unique company name, which is done by sub - mitting an online request through the e-ROC online portal of the Registrar General of Com - panies. Name approval typically takes three to five working days. Once approved, the following
• whether they wish to benefit from BOI or Port City concessions. Private Limited Company A private limited company is generally preferred due to fewer regulatory burdens, and it requires a minimum of one shareholder and one direc - tor, with no restriction on foreign shareholding unless the business falls within a restricted sec - tor. It offers limited liability to its shareholders and there is no minimum capital requirement. This structure is best suited for greenfield pro - jects, subsidiaries of foreign companies, or for most business cases due to its simplicity and flexibility. Public Limited Company A public limited company is permitted to offer its shares and other securities to the public and is generally used by larger enterprises, particu - larly where the investors intend to raise capital from the market. If a public company seeks to list its shares on the Colombo Stock Exchange (CSE), Listing Rules and SEC guidelines impose a minimum capital requirement and minimum public float, which indirectly requires a larger shareholder base. This, however, is a regulatory requirement for listing, not for incorporation. Company Limited by Guarantee A company limited by guarantee is a special category used primarily for non-profit purpos - es, such as charities, professional associations, NGOs, chambers of commerce, and certain edu - cational or cultural institutions. These compa - nies do not have share capital or shareholders but are formed by guarantors, who undertake to contribute a specified amount to the assets of the company in the event of winding up. They require a minimum of two members and two directors, and there is no restriction on foreign - ers forming guarantee companies.
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