Sri Lanka’s Companies Act Amendment: Mandatory Disclosure of Beneficial Owners 🇱🇰

🧾 What Is the Amendment?

The draft amendment, recently tabled in Parliament, will—for the first time—mandate companies in Sri Lanka to publicly disclose their beneficial ownership. This means identifying the real individuals who control or benefit from a company, regardless of whether their names appear in official shareholder documents.

This initiative also serves to meet an International Monetary Fund (IMF) structural benchmark, part of Sri Lanka’s broader economic recovery program.

🌍 Why Is It Being Introduced?

The law aims to:

• Align with Financial Action Task Force (FATF) standards.

• Strengthen Sri Lanka’s anti-money laundering and counter-terrorism financing efforts.

• Increase investor confidence and improve the country’s global business image.

🔎 What Is Beneficial Ownership?

Beneficial owners are the natural persons who:

• Ultimately own or control a legal entity.

• Receive benefits from company operations even if not officially listed.

Under the proposed amendment, members of the public will be able to request access to the beneficial ownership register, which will include:

• Full names

• Nationalities and addresses

• Dates and places of birth

• Nature and extent of ownership/control

• Identification numbers (e.g., passport, NIC)

• Tax Identification Numbers (TIN)

🏢 What Are Companies Required to Do?

All companies must:

• Maintain a beneficial ownership register at their registered office for a minimum of 10 years.

• Submit this data to the Registrar of Companies, who will maintain a centralized registry.

• Update the registry regularly to reflect any changes.

⚖️ What Are the Penalties for Non-Compliance?

Failure to disclose or providing false or misleading information will be treated as a criminal offence. Penalties may include:

• Fines

• Imprisonment

• Corporate sanctions

🔓 Who Can Access This Information?

The following groups will have access:

• Public authorities (e.g., Attorney-General, Customs, IRD)

• Financial and procurement regulators

• Members of the public upon formal request

❗ Challenges and Criticism

Despite its good intentions, the amendment has faced some criticism:

• Transparency International Sri Lanka (TISL) filed a Supreme Court petition opposing certain exemptions.

• Offshore and foreign companies are reportedly excluded from these requirements.

• No built-in verification mechanism raises concerns about the accuracy of self-reported data.

• Public access is not automatic—request procedures may limit transparency.

📅 What’s Next?

• The amendment has been placed on Parliament’s Order Paper and awaits debate.

• If passed, the Registrar of Companies will issue implementation regulations.

• Full rollout is expected by mid-2025, just ahead of Sri Lanka’s FATF mutual evaluation in March 2026.

🧠 Why This Matters for Businesses in Sri Lanka

1. Ensures greater accountability in corporate governance.
2. Encourages compliance and ethical business conduct.
3. Helps prevent the misuse of legal entities for illicit activities.
4. Could significantly reduce financial crime and corruption.

📌 Final Thoughts

The proposed amendment to Sri Lanka’s Companies Act is a milestone in transparency and anti-corruption reform. If implemented effectively, it will empower regulators, civil society, and the public to hold entities accountable while aligning Sri Lanka with international best practices.

However, to truly succeed, the government must ensure:

• Clear regulations,

• Public access,

• Strong enforcement, and

• Removal of exemptions that undermine its spirit.

💼 Need Help Navigating These New Compliance Requirements?

Staying compliant with evolving regulations can be overwhelming—but it doesn’t have to be.

At NYX Corporate Solutions, our team of qualified accountants and corporate compliance experts can help you:

• Identify and document your company’s beneficial owners correctly

• Maintain and update your statutory registers in line with the new law

• Prepare for inspections or disclosures to the Registrar of Companies

• Ensure full compliance without disrupting your daily operations

Whether you’re just getting started or want to ensure your existing structures are compliant, we’re here to guide you every step of the way.

📩 Reach out today for a confidential consultation and stay ahead of the regulatory curve with confidence.

📚 Sources:

• Transparency International Sri Lanka – BO Registry Petition

• IMF Country Report – Sri Lanka 2024

• FATF Standards on Beneficial Ownership

• The Sunday Times

• Registrar of Companies – Sri Lanka

• Numbers.lk Tweet