Sri Lanka
How to start business in Sri Lanka
Introduction
Sri Lanka is a rapidly growing nation in the Asian Region with the GDP growth of 8%. After the end of 30 year ethnic conflict it is heading to an era of prosperity and development. However, when it comes to starting a business in Sri Lanka, it has been a tough task. Especially those who start from the scratch level have to face a lot of challenges before they start to run. Recently we show a rapid growth in start-up businesses in Sri Lanka, especially in IT and Tourism Sector.
Starting a Business in Sri Lanka has to be done after a great deal of research. If you are a foreign investor it's better to come through Board of Investment (BOI) which is the government authority for Foreign Direct Investment (FDI). BOI can help you in many ways such as giving lands, technical supports, making links with other government bodies, marketing helps, market information etc… Step 1 – Registration There are three categories where you can register your business.
01. Proprietorship
02. Partnership
03. Company
a. Private Limited Company
b. Public Limited Company
c. Limited by Guarantee
According the Company act of 2007 one director can be in the board of Private Limited Company. It gives the flexibility of starting a company only with one director. To start a Public Limited Company (PLC), particular company must have issued share capital.
Step 2 – Tax Registration
Once you done with registering your company registering with Tax authority should be done. There are two general types of taxes have to be paid by all businesses and many different taxes should be paid according to the industry you are in.
2.1 Value Added Tax(VAT); Sri Lanka's VAT system is same as UK system. VAT registration can be done at Inland Revenue Department (www.ird.gov.lk). VAT department is located in 3rd floor of IRD Head office. 12% VAT is applicable on all types of products and services.
2.2 Business Turn over Tax (BTT); 3% BTT also should be paid on all types of products and services except few. See www.ird.gov.lk for more info Step ]
3- Setting up your business location
Finding a place is very easy since there more place to be rent out. You can easily check out some Sunday papers to find the best place. Or you can directly contact a real estate agent. Very easy way is to buy the Sunday Times (Weekend English paper) and pull out the classified section HitAd, you will find more places. Other way is to find a place, just type "Office rent in Colombo" in Google.
Step 4 – Website, Email and Phones
Cost of Web designing is very less in Sri Lanka. You can develop a site by investing just 100 dollars. It's that much cheap. Check out a very hot deal from Printonline.lk, the fist ever online printing company in Sri Lanka which gives a host of services for start up businesses.
There are three fixed line phone service providers and five mobile service operators. If you are looking for a cost effective communication method try Sri Lanka Telecom (sltnet.lk) or if you want a total communication solutions check out lankabell.net or suntel.lk. They more hot deals to suit your requirements.
Step 5 – Finding a Bank
There are about 23 commercial banks are in Sri Lanka. Intentional banks are HSBC, Standard Charted, Citi Banks, Overseas Bank of India, Indian Bank and ICICI. Local banks are Hatton National Banks, National Development Banks, NDB, Nations Trust Banks, People's Bank, and Bank of Ceylon etc…. If you are in import export business better to find a bank with a strong international links.
Step 6 – Advertising and Marketing
One every thing is settled; start to promote your business. Set an advertising plan, find your target market and start your campaign. There over 50 news papers and magazines are in Sri Lanka and over 15 TV channels & radio stations. TV adverts are little bit of expensive than radio and press ads.
If you starting draft some articles and send to media out-lets. It's an easy way to bring the message properly. We are done If you are done with all the above six steps you can start make money in Sri Lanka. If your idea is creative and totally new Sri Lanka making money won't be a big issue.
Unfavorable factors in Sri Lankan Business Environment
Since Sri Lanka has a higher literacy rate it does not mean all Sri Lankans are well educated. But there are educated up to a certain level. People who live in main cities like Colombo and Kandy are well educated and they have a higher purchasing power. This would limit the expansion of your business.
Most of Sri Lanka business people are not trust worthy. We strongly advice you to write whatever the deal you make. Whenever you make some contracts put it in writing it will help you avoid unnecessary troubles in future. Be strong in getting payment. If not you will waste a lot of time in following up with your clients and paying a visit to their office.
Keep an eye on political situation and try to fixe some appointments with key political figures.
Help and support
Check out the one stop entrepreneur solutions package of printonline.lk, they can help you to build all the necessary foundation at a reasonable cost.
Visit: http://printonline.lk/Entrepreneur_Pack.html and see how they can help you to put the necessary foundations.
About the Author
Tania Mendis is a freelance journalist and an active blogger. You can reach her via tania.mendis@gmail.com
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