As it applies to any company planning on venturing into a new area of Business there are the most important PESTEL factors to consider about. That usually is the Political/Economical/Social/Technological/Environmental & Legal factors.
Here is an insight to what is necessary to be looked into in Sri Lanka.
There are many categories in which a Company should be registered.
- LIMITED LIABILITY COMPANY
If a Company is registered as a LLC it is required that there should be One Director and two Shareholders. It is a must that the company secretary should be a local, a Sri Lankan citizen.
- SOLE PROSPRIETORSHIP
This company type would ideally have a sole trader and will be taxed at a personal income rate. This is the easiest and quickest type of company to set up. However, all company obligations apply and it can employ other individuals as staff.
- PUBLIC LIABILITY COMPANY (PLC)
This type of company doesn’t require a minimum share capital andshould consist of two Directors &2 Shareholders. The company has to file annual returns, audit accounts, and produce financial statements. Shares could be on the Stock exchange.
- OVERSEAS COMPANY
Also described as Offshore Company. This type of business is done out of the country, they cannot do business in Sri Lanka.
Once we decide what type of company we would venture into, next ic how we should register the Company.
The Company should be registered in the Registrar of Company Sri Lanka. It would approximately take 3 months and would cost LKR.1000/- & if all Documentation is in order the confirmation will be within 2 DAYS.
- Company Sectretay & Director signed consent form.
Takes one day & if the company is unable to provide a secretary one would be provided for a fee of 30,000-45,000LKR.
- These are the forms that will be necessary
- Form 1 – Registration of Company
- Form 18 – Consent and certification of Directors
- Form 19 – Consent and certification of Secretary
Two Copies of Articles of Association (takes 3 days) for a flat fee of LKR.15,000. Form 1 +LKR1000+11% VAT
- Public Notice on a daily Newspaper should be given 60 Days prior and the Paper would publish it withn 2 weeks.
- TIN (T INLAND REVENUE)
Registering in the Inland Revenue should be done. There is absolutely no charge and it could be done in 1 Day personally.
- VAT Registration at Inland Revenue
Takes approximately 1 Day and there is no cost incurred.
- Regitration at EPF (EMPLOYEE TRUST FUND) at Labour Department in order to pay gratuity to employees who have completed 5 years. This is paid through the Sri Lanka Central Bank. Should be able to complete registration within 1Day with no cost.
- It is advisable to set up a Bank account in order to receive best deal transferwide. Also, by monitoring Google, we can get a transparent exchange rate for transactions done by foreign currency.
- Legal Department (INLAND REVENUE)
The Labour law states that 14 Days of PAID Annual Leave to be granted to employees once they have completed 1 year with the Company. Apart from that, the employees also get the benefits of all public and religious Holidays.
Maternity leave is 12weeks.
Upon resignation the employee is entitled for half a month salary for each completed number of years with the same Company.