Business documents in Sri Lanka

Most growing businesses in Sri Lanka operate as a private limited company — “(Private) Limited” or “(Pvt) Ltd” — under the Companies Act No. 7 of 2007. Public companies (PLC), companies limited by guarantee, unlimited companies and overseas companies with a place of business in Sri Lanka are also registered by the Registrar of Companies. Sole proprietorships and partnerships are not ROC entities; they register a business name with the Divisional Secretariat or the relevant provincial authority instead.

Incorporation is handled online through eROC. You reserve a name, then file Form 1 (application for registration), Form 18 (consent and certificate of each initial director), Form 19 (consent of the initial company secretary) and the Articles of Association, which can follow the model in the Act or be drafted for the company. Signed forms are scanned to PDF and uploaded, and the certificate of incorporation is downloaded from the eROC dashboard with a QR code for verification.

Beneficial ownership is the big change of 2026. The Companies (Amendment) Act No. 12 of 2025 came into operation on 30 March 2026, together with the Companies (Beneficial Ownership) Regulations No. 01 of 2026. New companies file Form BO 1 at incorporation, every company appoints an authorised person (Form BO 5), share issues and transfers carry BO 2 and BO 3 notices, and beneficial ownership details accompany the annual return (Form 15) as Form BO 4. Existing companies had transitional reporting duties on Form BO 7.

After incorporation, a company needs its own TIN, share certificates, a bank account and EPF/ETF employer numbers before it pays staff. Board and shareholder resolutions are the everyday paper trail for appointing directors, opening accounts and issuing shares.

VAT is charged under the Value Added Tax Act No. 14 of 2002 at a standard rate of 18%. A business must register when taxable supplies exceed Rs. 15 million in a quarter or Rs. 60 million over twelve months. The 2026 Budget proposed cutting this to Rs. 36 million from 1 July 2026, but the government told Parliament in June 2026 that the cut would not be implemented and the IRD confirmed the existing thresholds remain. The VAT (Amendment) Act No. 14 of 2026 separately moved financial services VAT to 20.5% from 1 July 2026 and brought non-resident suppliers of electronic services into the VAT net from the same date.

The Social Security Contribution Levy (SSCL) is a separate 2.5% levy on liable turnover under the Social Security Contribution Levy Act No. 25 of 2022. The SSCL (Amendment) Act No. 10 of 2026 legislated a lower registration threshold from 1 July 2026, yet the government later announced it would keep the existing Rs. 60 million threshold for both VAT and SSCL “at this stage”. Because the two signals conflict, confirm your SSCL position with the IRD before deciding you are below the line.

The tax invoice itself is now prescribed. The Commissioner General first specified a format in Gazette Extraordinary No. 2463/05 (November 2025), replaced it with a revised format in Gazette No. 2481/22 (27 March 2026), and postponed the mandatory date to 1 October 2026 through Gazette No. 2500/106. Every VAT-registered supplier issuing a tax invoice must now follow it. Businesses approved by the Commissioner General to link their ERP to the IRD’s RAMIS system through a Web API may be relieved of part of the serial-number prefix; check the conditions with the IRD.

Two details catch people out: dates must be in MM/DD/YYYY order, and the invoice may list only goods or services that attract VAT — exempt items go on a separate document. Older templates that show only a “VAT Reg. No.”, round off cents or omit the buyer’s TIN need updating.

Corporate buyers and state institutions in Sri Lanka usually want written quotations — often three to compare — before raising a purchase order. A good quotation states your registered name and TIN, a quotation number, validity period, whether prices include VAT and SSCL, and delivery and payment terms.

The buyer then issues a purchase order, goods travel with a delivery or dispatch note signed by the receiving stores, and the tax invoice quotes the PO number. Advances are requested on a proforma invoice, which must never carry the “TAX INVOICE” title.

Cash and cheque collections are acknowledged with numbered receipts. Returns and price corrections are handled with credit and debit notes that cite the original invoice, keeping your VAT return and the buyer’s input-tax claim aligned.

Employment in Sri Lanka usually starts with a letter of appointment that sets out the job title, start date, probation period, salary and allowances, working hours, leave and notice terms. Shop and office staff, factory workers and workers in wages-board trades are covered by different statutes, so the letter should reflect the law that applies to your sector. Monthly salary slips showing gross pay, deductions and the EPF contribution are standard practice and help when staff apply for loans or visas.

Every employer must register with the Employees’ Provident Fund, which is administered by the Commissioner of Labour with the Central Bank of Sri Lanka as custodian. The minimum contribution is 20% of an employee’s total monthly earnings: at least 8% deducted from the employee and at least 12% paid by the employer. Contributions for a month are due by the last working day of the following month, using Form C or e-C forms; employers with 50 or more staff must submit their returns electronically. Late payments attract surcharges that grow with the delay.

Employers also pay 3% of monthly earnings to the Employees’ Trust Fund, a separate board. Gratuity under the Payment of Gratuity Act No. 12 of 1983 becomes payable to qualifying employees on termination after the statutory period of continuous service, so your HR records need accurate start dates.

When an employee leaves, employers are expected to issue a service letter confirming dates of employment and designation; banks and embassies often ask for a salary certificate too.

Service agreements, distribution and agency contracts, NDAs and MOUs are typically drafted in English, governed by Sri Lankan law and signed by authorised signatories backed by a board resolution.

Some instruments, such as leases and mortgages, attract stamp duty, and deeds dealing with land are executed before a notary public. Ordinary NDAs and service agreements generally need neither, but check before signing anything property-linked.

The Electronic Transactions Act No. 19 of 2006 gives legal recognition to electronic documents and electronic signatures, so a contract signed electronically is generally enforceable. Exceptions exist for documents such as wills and land instruments, and some counterparties still insist on wet-ink originals with the company stamp.

Every import and export is declared to Sri Lanka Customs on a Customs Declaration (CusDec) lodged through the ASYCUDA system, usually by a licensed customs house agent. Since 1 October 2026 Customs requires paperless CusDec submission with digital signatures and no longer accepts manual counter lodgement, so your supporting documents need to be clean and consistent in electronic form.

A typical export or import file includes the commercial invoice (with HS codes, Incoterms and currency), packing list, bill of lading or air waybill, and any licences or permits from other agencies. Exporters who rely on preferential tariffs under trade agreements also need the appropriate certificate of origin, issued through the designated authority for that agreement.

A National Single Window is still being built, so permits from other agencies may come through separate systems. Match descriptions, quantities and values exactly — discrepancies between the CusDec and the commercial invoice are a common cause of delay.

Under the tax invoice specification, both supplier and purchaser must keep invoice records for at least five years from the end of the relevant taxable period, in their original form with integrity and accessibility preserved. Many businesses keep records longer for audits and EPF inspections.

Business documents in Sri Lanka are almost always prepared in English, although Sinhala and Tamil are official languages and some government correspondence uses them. Tax invoices must state the value of supply in Sri Lankan rupees. If you price an export or a contract in USD, show the LKR equivalent and the exchange rate used wherever a local tax figure appears.