The main private company structure in Sri Lanka is the private limited company, incorporated under the Companies Act No. 7 of 2007 and registered with the Registrar of Companies. Foreign investors commonly use a wholly owned private limited company as a local subsidiary, and in many sectors 100 percent foreign ownership is permitted, subject to sector rules and the Board of Investment (BOI) regime.

Compliance involves the Registrar of Companies for company law, the Inland Revenue Department (IRD) for income tax, VAT and withholding, the Employees' Provident Fund (EPF) and Employees' Trust Fund (ETF) for payroll, the Central Bank for foreign exchange, and sector regulators. The IRD uses the RAMIS online system for most filings.

This guide explains the annual cycle for a private limited company, with attention to foreign-owned subsidiaries. Updated November 9, 2026. Sri Lanka has revised its tax laws and thresholds repeatedly in recent years, and secondary sources do not always agree on rates and effective dates, so confirm rates and dates with the IRD, the Registrar or a Sri Lankan chartered accountant.

Entity compliance Sri Lanka: the quick answer

• Hold the annual general meeting (AGM) within six months of the year-end, with the first AGM within 18 months of incorporation, and file the annual return with the Registrar within 30 working days after the AGM.

• Prepare audited financial statements and file the income tax return by 30 November after the 31 March year of assessment end for companies on the standard tax year.

• Pay income tax in quarterly instalments through RAMIS, register for VAT when turnover passes the threshold and file VAT returns monthly or quarterly.

• Withhold tax on payments, remit EPF and ETF contributions monthly, and keep registers current.

What determines a company's compliance requirements?

The company's size, ownership and activity determine the workload. Most companies need an auditor under the Companies Act, and the audited statements are filed with the Registrar and used for tax. Companies approved under the BOI regime have special agreements with tax holidays or concessions and reporting conditions that sit on top of the usual requirements.

The tax year in Sri Lanka runs from 1 April to 31 March. A company can apply to use a different accounting year, but most use the standard year, which drives the income tax calendar. The year of assessment is named for the 12 month period, so the year of assessment 2025/26 ends on 31 March 2026 and the return is due on 30 November 2026.

Annual entity requirements in Sri Lanka: the core checklist

1. Annual general meeting

A private company must hold an AGM each year within six months of the year-end, and no more than 15 months should pass between meetings. The first AGM is due within 18 months of incorporation. The AGM approves financial statements and appoints the auditor. A private company can use written resolutions in place of meetings, if its articles allow.

2. Annual return to the Registrar

The annual return (Form 15) lists the company's registered office, directors, secretary, shareholders and share capital. It is filed within 30 working days after the AGM. Late filing leads to penalties and may affect the company's standing on the register. Changes to directors, secretary and registered office are filed separately within the period set by the Act, so do not wait for the annual return.

3. Audited financial statements

Directors prepare financial statements under Sri Lanka Accounting Standards, and the accounts are audited by a chartered accountant firm. The signed statements are presented to shareholders at the AGM and filed with the Registrar. Foreign-owned subsidiaries usually need statements aligned with the parent's group reporting.

4. Income tax return

The annual income tax return is filed on RAMIS and is due on 30 November following the year of assessment end for the standard tax year. The return includes the tax computation, audited accounts and disclosure of related-party transactions. Tax payable after instalments and credits must be paid on or before the due date.

5. Instalments and withholding

Companies pay income tax instalments in four parts, generally on 15 August, 15 November, 15 February and 15 May, based on estimated tax for the year. Withholding tax applies to payments such as interest, rent, professional fees and payments to non-residents, and returns are due by the 15th of the following month.

Tax and indirect tax obligations

The standard corporate income tax rate is 30 percent, although a lower rate of 24 percent is commonly cited for certain small and medium enterprises, and exporters and other incentive regimes may have different rates. Because sources differ, confirm the rate and eligibility conditions that apply to your company.

VAT is 18 percent for most supplies, and financial services are reported to rise to 20.5 percent from 1 July 2026. One source says the VAT and Social Security Contribution Levy registration threshold falls to a turnover of Rs 36 million from 1 April 2026, so check the threshold with the IRD. VAT returns are filed monthly or quarterly. The Social Security Contribution Levy and other levies may apply to some businesses, and withholding tax on dividends is 15 percent, with treaty reductions in some cases.

Foreign-owned subsidiaries

A foreign-owned company should hold its foreign capital through an Inward Investment Account (IIA) or similar account with a licensed bank, which is the basis for repatriating dividends and sale proceeds. Keep evidence of capital inflows, as the bank will request them when funds are remitted abroad.

Transfer pricing rules require related-party transactions to be at arm's length, and the IRD expects documentation for significant intercompany payments. Payments of interest, royalties and service fees to non-residents attract withholding tax, which may be reduced by treaty, and the parent should provide residency certificates. Check whether BOI or other agreements require additional reporting.

First-year and event-triggered obligations

In the first year, incorporate through the Registrar, obtain a taxpayer identification number, register for VAT if required, open a bank account, register for EPF, ETF and relevant levies, and appoint an auditor and secretary. Event-driven filings include changes of directors, secretary, registered office, share capital and articles, allotments and share transfers.

A company that stops trading can be struck off or wound up, but the Registrar will look for filed returns and the IRD will look for clearance. Dormant companies still have annual duties.

Employment and local requirements

Employers must contribute to the EPF at 12 percent of earnings and the ETF at 3 percent, with employees contributing 8 percent to the EPF, and remit them by the end of the following month. Employers also deduct Advance Personal Income Tax from employee salaries and file returns monthly. The Shop and Office Employees Act and the Wages Boards Ordinance set rules on working hours, leave and termination in different sectors, and gratuity applies after five years of service. Foreign employees need resident visas, and the company should check the BOI or Department of Immigration requirements.

Record-keeping and governance in Sri Lanka

Keep the articles, registers of members, directors and secretaries, minutes, financial statements, tax returns and supporting records, along with BOI agreements and bank evidence of capital inflows. Accounting records must generally be kept for at least six years in Sri Lanka, and tax records for the period required by the Inland Revenue Act. Maintain a list of signatories, a copy of the latest Registrar filings, and a calendar for RAMIS filings, since the IRD portal sends limited reminders.

Build a compliance calendar for Sri Lanka

A compliance calendar turns the rules above into dated tasks with named owners. Start from the financial year-end and the incorporation anniversary, then add the recurring monthly and quarterly items. Review it each quarter, because deadlines, extensions and registry systems change.

• 15 August, 15 November, 15 February and 15 May: income tax instalments.

• Within the period in the Act: notify the Registrar of changes to directors, secretary or registered office.

• Within six months of year-end: hold the AGM.

• Within 30 working days after the AGM: file the annual return (Form 15).

• 15th of each month: withholding tax returns and Advance Personal Income Tax filings.

• 30 November: income tax return for the previous year of assessment.

Common mistakes

• Relying on a 24 percent rate without confirming that the company qualifies.

• Missing the 30 working day annual return period after the AGM.

• Ignoring the IIA process and struggling to repatriate dividends later.

• Using an older VAT threshold or rate when planning registration.

• Treating the 31 March year-end as the incorporation date for all deadlines.

• Skipping EPF and ETF remittance deadlines during payroll changes.

Entity compliance Sri Lanka: frequently asked questions

What is the main private company type in Sri Lanka?

The private limited company, registered with the Registrar of Companies under the Companies Act No. 7 of 2007, is the standard structure for local and foreign-owned businesses.

When is the annual return due?

Within 30 working days after the AGM, which must be held within six months of the year-end.

When is the Sri Lankan income tax return due?

For the standard tax year ending 31 March, the return is due on 30 November of the same calendar year.

What is the corporate tax rate?

The standard rate is 30 percent, although lower rates apply to certain businesses and sources cite different figures, so confirm the rate for your company.

What is the VAT rate in Sri Lanka?

The standard VAT rate is 18 percent, and the registration threshold and some sector rates have been revised, so confirm the current position with the IRD.

How do foreign investors repatriate profits?

Through an Inward Investment Account, with bank documentation of the original capital inflow and payment of withholding tax on dividends.

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This article is general information, not legal, tax or accounting advice. Confirm current requirements with the relevant authority or a qualified local adviser before acting.