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When setting up a business in Sri Lanka, choosing the appropriate business structure is essential, as it affects legal liability, taxation, and regulatory obligations. The simplest form is a sole proprietorship, ideal for small-scale operations with a single owner. It is easy to register and manage, but it comes with unlimited personal liabili

A partnership allows two or more individuals to run a business together, sharing profits and responsibilities. Like sole proprietors, general partners face unlimited liability, though limited liability partnerships offer some protection. The most popular choice among startups and growing businesses is the Private Limited Company (PVT LTD). It is a separate legal entity, offering limited liability to shareholders and enhanced credibility with investors and banks. A PVT LTD can have up to 50 shareholders and must comply with specific regulatory requirements. For larger enterprises, especially those considering public investment, a Public Limited Company is suitable.

It requires a minimum of seven shareholders and is subject to stricter compliance, making it ideal for stock exchange listings. Foreign companies looking to enter the Sri Lankan market can opt for a branch office or liaison office, which operates under local laws and needs approval from the Central Bank. Understanding these options is crucial for smooth company registration in Sri Lanka, ensuring your business is legally compliant and set up for success.