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Sri Lanka – New Beneficial Ownership Disclosure Requirements
On the 4th of August 2025, Sri Lanka certified the Companies (Amendment) Act No. 12 of 2025, introducing significant reforms to modernize the country’s corporate regulatory framework.
This legislation establishes new beneficial ownership disclosure requirements, strengthens corporate governance standards, and aligns Sri Lankan company law with international transparency norms.
Key Changes
The amendment modernizes the Companies Act No. 07 of 2007 by introducing several critical transparency requirements:
- Mandatory beneficial ownership disclosure for all companies
- Prohibition of bearer shares
- Enhanced corporate governance procedures
- Stricter reporting requirements with significant penalties for non-compliance
- Creation of Additional Registrars-General positions to improve administrative efficiency
Applicability and Timeline
These requirements apply to all entities operating in Sri Lanka, including registered companies, branch offices, and representative offices. The law will become operational on a future date that will be officially announced by the Minister through a gazette notification.
The implementation includes specific transition periods:
- Existing companies have 6 months from the effective date to submit beneficial ownership information
- Depositories must submit reports identifying shareholders with 10% or more ownership within 30 days
- All companies must verify and submit UBO details within 30 days of the law becoming operational
Beneficial Ownership Definition
A beneficial owner must be a natural person who either:
- Holds 10% or more ownership interest (directly or indirectly) through shares, voting rights, or other ownership forms
- Exercises effective control through indirect means such as influencing business decisions or controlling director appointments
Filing Requirements
Companies must submit comprehensive beneficial ownership information to the Registrar, including:
- Full names and former names
- Date and place of birth, nationality, country of residence
- Residential, business, email, and postal addresses
- NIC/TIN/Passport details
- Contact information
- Nature and extent of ownership
Register Maintenance
Companies must maintain a register of beneficial owners at their registered office and appoint a natural person resident in Sri Lanka as an authorized person to safekeep the register. Records must be retained for 10 years (5 years after dissolution).
Compliance Steps
Businesses must take the following actions to ensure compliance:
1. Immediate Preparation:
Review current ownership structures and identify beneficial owners
2. Documentation Gathering:
Collect all required personal and ownership information
3. Register Setup:
Establish internal beneficial ownership registers
4. Authorized Person Appointment:
Designate a Sri Lankan resident to manage the register
5. Filing Submission:
Submit all required information to the Registrar within specified timeframes
While the implementation date is pending official gazette notification, companies are advised to begin preparation for these requirements to ensure readiness when the law becomes operational.
Risks of Non-Compliance
The Act establishes significant penalties for various violations:
- Failing to comply with beneficial ownership reporting requirements: Fine up to 1 million rupees and/or imprisonment up to 10 years
- Providing false or misleading information: Fine up to 1 million rupees and/or imprisonment up to 10 years
- Failing to meet initial reporting timeframes: Fine up to 50,000 rupees and/or imprisonment up to 6 months
- Directors and officers face personal liability unless they can prove the offense occurred without their knowledge
How Mercator® by Citco (Mercator) Can Help
Mercator provides comprehensive support for businesses navigating these new beneficial ownership requirements:
- UBO registration assistance
- Internal register preparation and maintenance
- Annual UBO compliance services
- Documentation management and filing support
- Ongoing regulatory compliance monitoring
For assistance with Sri Lanka’s new beneficial ownership requirements or to learn more about Mercator’s UBO supports services, please contact mercator@citco.com.
