Sri Lanka, a strategic investment destination in South Asia, offers growing opportunities for foreign entrepreneurs and investors. But one of the most common questions that arises is:
“Can a foreigner own 100% of a private limited company in Sri Lanka?”
The answer is yes—but with conditions, especially depending on the industry in which you plan to operate.
Let’s break it down.
✅ 100% Foreign Ownership – Allowed in Certain Sectors
As of 2025, Sri Lankan law permits 100% foreign ownership in private limited companies registered for:
- Tourism and Hospitality businesses (e.g., hotels, travel agencies)
- IT and Software Development
- Export-oriented industries
- International trading
- Logistics services (non-critical areas)
If you’re a foreign investor looking to set up a hotel or tourism-related business, you can register a Pvt Ltd company with 100% foreign shareholding without requiring a local partner. This policy is part of Sri Lanka’s tourism promotion strategy and openness to foreign capital in non-restricted sectors.
⚠️ Industries Restricted to 40% Foreign Ownership
However, not all sectors are equally open.
There are restricted sectors where foreign ownership is limited to 40%, meaning a minimum of 60% local (Sri Lankan) shareholding is required. These include:
- Retail trade (especially when turnover is under USD 5 million)
- Small-scale agriculture and plantations
- Fishing and coastal operations
- Certain logistics/transport activities
- Media and broadcasting
In these cases, if a foreign national wants to invest, they must partner with a Sri Lankan national or company to meet the shareholding requirements.
📈 What’s Changing? Plans for 100% Foreign Ownership in More Sectors
The good news for foreign investors is that Sri Lanka is currently reviewing its FDI (Foreign Direct Investment) policies to attract more capital inflow.
The government has announced plans to relax foreign ownership restrictions across more sectors in the near future. This includes:
- Potential expansion of 100% foreign ownership to select retail and service-based industries
- Simplified registration and BOI (Board of Investment) approvals for foreign entrepreneurs
- Promotion of Sri Lanka as a “100% ownership-friendly” investment destination
These policy changes aim to boost investor confidence, increase foreign capital, and drive post-crisis economic recovery.
🏛️ How Can a Foreigner Register a Company in Sri Lanka?
Here’s a quick overview of the steps:
- Reserve the company name at the Department of Registrar of Companies (ROC)
- Prepare incorporation documents: Form 1, Form 18 (directors), Form 19 (secretary), and Articles of Association
- Submit documents to ROC and obtain the Certificate of Incorporation
- Open a corporate bank account
- Obtain approvals from the BOI or relevant authority (if applicable)
- Register with the Inland Revenue Department for tax purposes
- Apply for Visa/Residency if needed for foreign directors/shareholders
💡 Tip: It’s strongly advised to consult a legal or company registration agent familiar with BOI regulations and industry-specific requirements.
📌 Summary Table
| Industry | Foreign Ownership | Notes |
|---|---|---|
| Hotel & Tourism | ✅ 100% allowed | No local partner needed |
| IT / Software | ✅ 100% allowed | Ideal for tech startups |
| Retail (<$5M turnover) | ❌ Max 40% foreign | 60% must be local |
| Farming & Fishing | ❌ Max 40% foreign | Sensitive/local protection |
| Export Manufacturing | ✅ 100% allowed | BOI incentives available |
| Media / Telecom | ⚠️ Restricted | Subject to national security review |
💬 Final Thoughts
Sri Lanka is taking solid steps toward becoming a pro-investment destination by removing outdated restrictions and simplifying processes for foreign entrepreneurs. While some industries are still partially protected, the trend is clearly moving toward full liberalization of foreign ownership—especially in high-growth and export-focused sectors.
If you’re a foreign national looking to start a business in Sri Lanka, now is a good time to explore your options and position yourself early for the next wave of open-market policies.
