Foreign Ownership in Sri Lanka: What You Need to Know

1. Is 100% Foreign Ownership Allowed?

Yes, Sri Lanka generally allows 100% foreign ownership of private limited companies (Pvt Ltd) in most sectors, including logistics and support services. However, there are some restrictions in certain sectors like:

• Land ownership
• Retail trade (under USD 1 million)
• Certain professional services

But for international logistics, especially where operations are outsourced and non-asset-heavy, foreign ownership is typically allowed.

2. Sector-Specific Note: Logistics & Customs Clearance

While logistics services (freight forwarding, warehousing, transport coordination) can be 100% foreign-owned:

• Customs clearance services must be conducted by a licensed customs broker in Sri Lanka.
• Your company can outsource this service to a local licensed agent, which you mentioned you plan to do — this is compliant.

As long as your company does not perform the customs clearance directly, but acts as a coordinator, you’re within regulatory boundaries.

3. Minimum Investment Requirements

If your logistics company plans to serve only international clients or operate export-related logistics, there’s no minimum capital requirement beyond what’s typical for any Pvt Ltd.

However, if you’re also doing domestic logistics or trade, foreign investments under certain thresholds may trigger restrictions:

4. Incorporation Process (Pvt Ltd Company)

Here’s the general process for incorporating a wholly foreign-owned company in Sri Lanka:

1. Reserve Company Name via eROC portal
2. Prepare Articles of Association
3. Appoint Directors and Shareholders
   • At least one director must be a natural person
   • A foreign company (like your Singaporean shareholder) can be the sole shareholder
4. Submit Incorporation Documents to Registrar of Companies
5. Obtain Tax Identification Number (TIN)
6. Open Bank Account
7. Register for VAT and other taxes, if applicable

5. BOI Registration (Optional but Recommended for Foreign Companies)

For larger operations or when importing/exporting regularly, you may consider registering with the Board of Investment (BOI). Benefits include:

• Duty exemptions
• Investor visas for foreign directors/employees
• Land lease facilitation
• Streamlined customs procedures

BOI isn’t mandatory for all foreign companies, but it’s useful in industries like logistics.

6. Using a Foreign Company as Shareholder

A foreign company (e.g., a Singaporean entity) can directly hold shares in a Sri Lankan Pvt Ltd. However, you’ll need:

• Board resolution from the parent company authorizing investment
• Certificate of incorporation of the parent company (certified copy)
• Details of authorized representative/director

✔️ Summary