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For the first time in Sri Lanka’s corporate history, heavy fees levied for registering a new company have been reduced by the Government by as much as 73%.
New companies born in Sri Lanka last year surged 7% while the key state institution in charge of such new company registrations itself reports an enormous revenue flow to its coffers in 2016.
“I am pleased to inform the House that as part of changes in fees, we have reduced the fee of registration of a Private Limited Company by as much as Rs. 11,000,” declared Minister of Industry and Commerce Rishad Bathiudeen on 4 May in Parliament.
Minister Bathiudeen was making a statement on the increase of company registration fees by his Registrar of Companies (RoC) as a follow-up to the proposal made in the 2016 Budget as well as reporting on the performance of RoC under his Ministry to the Parliament on 4 May.
The proposal made in Section 419 of the 2016 Budget speech was to review fees and charges made by different Government entities every three years by all the Chief Accounting Officers and Accounting Officers including Revenue Accounting Officers in public sector entities. The revision of company registration fees by RoC follows on this Budget proposal. The revised charges are effective from 1 January 2017.
“We reduced this fee from Rs. 15,000 to Rs. 4,000 to develop entrepreneurship in Sri Lanka. All fee changes are effective from 1 January 2017,” Minister Bathiudeen said.
“In 2016, the income of the Department of Registrar of Companies under my ministry increased by a huge 182% to Rs. 1.78 billion from 2015’s Rs. 632 million. Also 8,289 new companies were registered in Sri Lanka in 2016. Registration of foreign companies in Sri Lanka also increased by 17% to 41 in 2016. Even new registrations of associations under Section 34 increased by 140% to 367 in 2016.” The bulk of the new companies annually registered in Sri Lanka are such Private Limited Companies. For example, no less than 97% of 2016’s new 8,289 company registrations were in this ‘Private Limited Company’ category.
“Three types of changes are introduced by the Registrar of Companies which comes under the purview of the Ministry of Industry and Commerce, in keeping with the proposal made in Section 419 of Budget 2016. The three changes are the fees for societies, fees regulations to renewal and registration of auditors and introducing a new qualification to be registered as a Company Secretary in Sri Lanka,” said Minister Bathiudeen.
Among the upward fee revisions were the fee for registration of a Public Limited Company under Form 1, increased from Rs. 15,000 to Rs. 20,000, fee for registration of an unlimited company, increased from Rs. 12,500 to Rs. 15,000, fee for registration of a company limited by Guarantee under Form 5 increased from Rs. 25,000 to Rs. 30,000 and fee for registration of mortgages charges and debentures has been increased from Rs. 5,000.00 to Rs. 7,500.
Speaking of the revision to the qualification to be a company secretary, Minister Bathiudeen stated: “The qualifications to be registered as Company Secretaries were not amended and were not considered new qualifications for the past few years. The Institute of Certified Management Accountants (CMAs) of Sri Lanka requested to consider their qualifications to be registered as ‘Company Secretaries’ under the said gazette notice. The Advisory Commission on Company Law reviewed the said request and agreed to accept the said qualifications to be registered as Company Secretaries.”
The amendment on Company Secretaries has been made by the Minister using Extraordinary Gazette Notices No. 1998/11 dated 20 December 2016 under section 527 of the Companies Act No. 07 of 2007.
