Steep hikes hit offshore firms and professionals in broad corporate registration fee revision

By Nishel Fernando

The government has enacted a substantial upward revision in corporate registration fees, placing a heavier financial burden on the foreign and offshore entities looking to operate within the island. 

Implemented through Extraordinary Gazette No. 2496/03, issued by Trade, Commerce, Food Security and Cooperative Development Minister Wasantha Samarasinghe, the new fee structure amends the regulations last updated in October 2022. 

While the domestic private companies face modest nominal increases, the regulatory adjustments signal a steeper cost of entry for international capital and specialised corporate structures.

The most aggressive fee escalations are targeted directly at the foreign direct investment vehicles. Under the revised regulations, the cost to register or renew an offshore company has been set at Rs.198,300. 

Furthermore, the offshore entities must now deposit a significantly higher initial sum of US $ 115,000 into a local bank account to cover the operational expenses. The overseas companies attempting to register a physical place of business in Sri Lanka will also experience a sharp administrative cost, with the statutory fee now standing at Rs.79,300. 

Market analysts note that these concentrated increases for foreign enterprises could introduce additional friction to the local investment climate, right as the nation attempts to position itself as a competitive commercial hub in South Asia.

Domestically, the gazette also outlines notable increases for corporate structures across the board. The baseline registration for a private limited company has seen a modest rise to Rs.5,200. However, incorporating a public limited company now requires Rs.26,400. 

The registration fee for an unlimited company, a structure where the shareholder liability is not capped, has been adjusted to Rs.19,800. Meanwhile, incorporating a company limited by guarantee, a model often used by the non-profits and trade associations, will now cost Rs.39,600. 

For the re-registration of the existing companies, excluding the foreign entities, the fee has been revised to Rs.13,200, while the Gamidiriya companies can re-register as public companies for Rs.3,900.

The revised framework introduces comprehensive hikes for professional service providers dealing with corporate compliance. The registration fee for individual company secretaries has increased to Rs.6,600, while sole proprietorships, partnerships or limited companies acting as secretaries will now face a unified fee of Rs.13,200. 

Similarly, the auditing professionals will encounter steeper costs. Registering as an individual auditor is now priced at Rs.7,900, with auditor partnerships subject to a Rs.19,800 fee. The annual renewal of these auditing registrations has been updated to Rs.5,200 for individuals and Rs.7,900 for firms.

Routine administrative tasks and public access to company records have not been spared in the broad regulatory update. The preliminary step of securing a company name approval now commands a fee of Rs.2,600, while the filing of a mandatory annual return is set at Rs.7,900. 

Establishing collateral lines has also become costlier, with the registration of mortgages, charges and debentures fixed at Rs.9,900. Additionally, accessing corporate transparency features has seen a uniform pricing adjustment; inspecting a file kept by the Registrar General of Companies, inspecting the register of charges or obtaining a certification of any document extract will each cost Rs.1,300.