Setting Up a Branch or Liaison Office in Sri Lanka: What Foreign Businesses Should Know

Foreign companies looking to enter the Sri Lankan market generally have a few structural options: incorporating a new locally registered company, or establishing a branch office or liaison office of the existing foreign entity. Which structure makes sense depends on the nature of the business, its planned activities in Sri Lanka, and its longer-term plans in the market.

A branch office is typically used where the foreign company intends to carry on business activities directly in Sri Lanka — entering into contracts, generating revenue, and operating much like a local extension of the parent company, subject to registration and ongoing compliance requirements. A liaison office, by contrast, is generally more limited in scope — often used for representative, marketing, or coordination functions rather than direct revenue-generating activity, and is subject to its own registration conditions.

Both structures involve registration with the Registrar of Companies, along with supporting corporate documentation from the parent company, and may also involve sector-specific approvals or BOI-related registrations depending on the proposed activities. Once established, a branch or liaison office also takes on ongoing obligations similar to those of a locally incorporated company — registered particulars need to be kept up to date, and applicable statutory and tax obligations need to be met.

Choosing the right structure early avoids costly restructuring later, particularly where the scope of permitted activities differs meaningfully between a branch and a liaison office.

This is general information only and does not constitute professional advice. Requirements vary depending on the parent company’s jurisdiction, sector, and proposed activities in Sri Lanka. Contact us to discuss the best structure for your business.