Sri Lanka is emerging as a prime location for establishing offshore companies, thanks to its strategic geographic position, business-friendly regulations, and robust infrastructure. Here’s why you should consider Sri Lanka for your offshore company:
Strategic Location and Business Environment
Sri Lanka’s location at the crossroads of major shipping routes between Asia and Europe makes it an ideal hub for businesses looking to expand in these regions. The country’s open trade policies and government incentives make it an attractive destination for foreign investment. For instance, companies setting up in the Colombo Port City Special Economic Zone can benefit from special banking facilities and streamlined business regulations.
Ease of Doing Business
Sri Lanka ranks as the number one South Asian country in the World Bank’s “ease of doing business” rankings. The process of registering an offshore company is straightforward and typically takes about ten days. The required documents include passport copies of all shareholders and directors, proof of address, the preferred company name, and details on the allocation of shares. Once registered, the company must comply with local regulations, which include maintaining proper accounting records and filing annual audits.
Tax Benefits and Incentives
One of the major advantages of incorporating in Sri Lanka is the potential for significant tax savings. Offshore companies in Sri Lanka can benefit from a 0% tax rate on income generated outside the country. Additionally, there are no restrictions on the repatriation of profits, making it easy for businesses to manage their finances globally. The government also offers tax holidays and other incentives for new investors, especially in the IT and BPM sectors.
High-Quality Workforce
Sri Lanka boasts a highly skilled and literate workforce, particularly in the IT and BPM sectors. The country’s universities and technical institutes produce a steady stream of graduates equipped with the skills needed to support modern business operations. This makes Sri Lanka a cost-effective and reliable destination for outsourcing services, with wage costs being significantly lower compared to other countries in the region.
Infrastructure and Connectivity
Sri Lanka has invested heavily in developing its infrastructure to support business growth. The capital city, Colombo, is recognized as a global center of excellence for finance and accounting, and the country offers reliable telecommunications and transport networks. Furthermore, Sri Lankan Airlines, one of the fastest-growing airlines in the world, ensures excellent connectivity with major global cities.
Regulatory Compliance and Support
While Sri Lanka offers numerous benefits, it is essential to navigate its regulatory environment carefully to maintain offshore status and avoid unexpected tax liabilities. Companies must adhere to strict documentation and audit requirements, ensuring that all financial activities are transparent and in compliance with local laws. Employing a corporate secretary and utilizing local expertise can help businesses stay compliant and take full advantage of the benefits offered.
Establishing an offshore company in Sri Lanka offers numerous advantages, including strategic location, ease of doing business, significant tax benefits, and access to a skilled workforce. However, it requires careful planning and adherence to regulatory requirements. At THE NOMAD WEALTH, we specialize in helping businesses navigate these complexities to ensure a successful setup and operation. Contact us today to learn more about how we can assist you in establishing your offshore presence in Sri Lanka.
