🇱🇰 For founders in Sri Lanka
Form a US company from Sri Lanka
Sri Lanka's software, design, and services talent sells heavily to American and global clients, and founders in Colombo, Kandy, and beyond often reach a point where a local (Pvt) Ltd or working as a sole proprietor stops being enough. Clients in the United States frequently prefer to pay an American company with local invoices and a US business account, and some marketplaces, payment processors, and SaaS vendors only onboard US entities. A US LLC or C-Corp closes that gap without you leaving Sri Lanka.
Such an entity gives you a US EIN, a US business account through our licensed partner, and clean USD invoicing: the setup investors and payment processors expect. A Delaware C-Corp is the standard if you plan to raise from American venture funds; a single-member LLC is simpler and, for a foreign owner with no American operations, is generally disregarded for US federal tax purposes and files an informational return rather than paying corporate tax there. But Sri Lanka may treat the LLC differently, so disregarded treatment does not automatically flow through locally. Which is right depends on your fundraising and product plans, so confirm with a cross-border accountant.
Forming the company is the easy part. The parts that actually trip up Sri Lankan founders are how the United States taxes your income, how you legally bring USD earnings home under Central Bank of Sri Lanka foreign-exchange rules, and how your Sri Lankan personal and corporate tax works after the 2025 changes. That is what this page covers.
General information about forming a US company. Not legal, tax, or investment advice. Rules and figures cited are current as of July 2026 and change frequently. Consult qualified local and US advisers before acting.
The process, end to end
Form the entity
Pick a Wyoming LLC (solo/bootstrapped) or a Delaware C-Corp (VC-track) and file the formation remotely, with no US visit needed.
Read the guideGet an EIN
Apply for the company's federal tax ID. You can get an EIN without an SSN, and you need it to open a US business account.
Read the guideOpen a US business account
Open a US business account remotely with the EIN and formation documents. No US address or SSN required. Banking is provided through our licensed partner; StableCorp is not a bank.
Read the guideGet paid
Invoice US and global clients as a US entity and settle in USD, EUR, or INR, or in USDC on supported chains. Local-currency payout is available in select markets through StableCorp's licensed regional partners on compliant rails.
Read the guideSri Lanka-specific considerations
You still owe Sri Lankan tax on the profits
A US company does not make your income US-taxed-only or tax-free. As a Sri Lankan resident you report worldwide income to the IRD. Since 1 April 2025 the service-export exemption is gone: qualifying foreign-currency service income remitted through a Sri Lankan bank is taxed at a flat 15%, and higher rates apply if it isn't remitted. Plan for the liability and use the treaty plus foreign tax credits to avoid being taxed twice.
The 15% rate depends on remitting through a bank
The concessionary 15% cap on service-export income applies only where the payment is received in foreign currency and remitted through a bank in Sri Lanka. If you leave earnings offshore or move them through non-bank channels, you can lose the cap and face rates up to 36% (individuals) or the 30% corporate rate. Bringing USD or EUR home cleanly into a BFCA/PFCA is now both an FX and a tax decision.
Funding the US entity from Sri Lanka needs CBSL permission
Bringing earnings home is broadly permitted, but sending rupees out to fund or capitalise your US company is an outward capital transaction under Section 22 of the Foreign Exchange Act No. 12 of 2017 and requires Central Bank of Sri Lanka permission under the Outward Investment framework. The clean approach is to capitalise and run the entity from its own US-side income rather than remitting personal savings from Sri Lanka. Confirm your specific case with a local advisor.
LLC vs C-Corp changes your US filing
A single-member LLC owned by a non-US person is generally disregarded for US federal tax (no US corporate tax if there's no US trade or business), but it must file Form 5472 plus a pro-forma 1120 each year, with steep penalties for missing it. Sri Lanka may treat a US LLC differently, so the US disregarded status does not automatically flow through as pass-through locally. A C-Corp pays US corporate tax on its profits and is the structure US venture investors expect. Choose based on whether you're raising US VC or simply invoicing clients.
Crypto is unregulated: settle in bankable currency
Sri Lanka has no crypto framework, digital currencies aren't legal tender, and a 2021 CBSL directive restricts banks and cards from facilitating crypto. StableCorp settles your earnings in USD, EUR, or INR into your BFCA/PFCA through our licensed partner rather than delivering crypto or rupees to you locally. Keep full documentation of the source for both the CBSL purpose coding and your IRD return.
Getting your money home to Sri Lanka
As a Sri Lankan tax resident you are taxed on your worldwide income, so money you draw from your US company (whether an LLC distribution, a C-Corp dividend, or salary) must be reported to the Inland Revenue Department (IRD). Since 1 April 2025 (Inland Revenue (Amendment) Act, 2025) the previous exemption for service-export income was removed: gains and profits from services rendered to persons outside Sri Lanka, where payment is received in foreign currency and remitted through a bank in Sri Lanka, are taxed at a concessionary flat 15%. If the earnings are not remitted through a Sri Lankan bank, higher rates apply (up to 36% for individuals; the 30% standard rate for companies). Because the 15% cap is tied to bringing the money in through the banking system, routing your USD home cleanly is now also a tax question, not just an FX one. A resident can also claim a Foreign Tax Credit for foreign income tax actually paid, which applies even where a treaty exists to relieve double taxation. Rates and thresholds changed recently, so confirm current figures with a Sri Lankan tax advisor.
On the FX side, Sri Lanka's exchange system runs under the Foreign Exchange Act No. 12 of 2017, administered by the Department of Foreign Exchange at the Central Bank of Sri Lanka (CBSL). Inward remittances of your earnings are broadly permitted and current-transaction inflows are not restricted. As a resident earning foreign exchange from services to non-residents you can open a Business Foreign Currency Account (BFCA), or, as an individual freelancer, a Personal Foreign Currency Account (PFCA), and hold USD or EUR without being forced to convert to rupees; banks credit genuine foreign-currency remittances and will ask for the underlying invoice/contract. Note that rupees may not be converted and credited into a BFCA: only actual foreign-currency inflows. Sending rupees out to fund or capitalise the US entity is a different matter: under Section 22 of the Foreign Exchange Act, capitalising a foreign company from Sri Lanka is an outward capital transaction that requires CBSL permission under the Outward Investment framework. Inward remittance of earnings is broadly permitted; sending capital out is not, so fund and capitalise the entity from US-side income rather than wiring savings from Sri Lanka. On crypto: Sri Lanka has no formal virtual-asset framework, digital currencies are not legal tender, and a 2021 CBSL directive under the Foreign Exchange Act restricts banks and card networks from facilitating crypto transactions; AML/CFT rules are still being developed. StableCorp settles your US company's earnings in USD, EUR, or INR through our licensed partner and generates the records you need for both your US filing and your IRD return; you receive those funds into your BFCA/PFCA. StableCorp does not provide LKR payout or hold a CBSL licence. Because both the tax and FX rules are in flux, verify the current position with a local advisor before you rely on it.
Sri Lanka & US taxes
Yes. A US–Sri Lanka income tax treaty is in force. The Convention was signed in Colombo on 14 March 1985, amended by a Protocol signed in Washington on 20 September 2002, and entered into force on 12 July 2004. Sri Lanka appears on the IRS 'United States Income Tax Treaties A to Z' list and the treaty remains current (no termination). For a founder the treaty matters in two main ways. First, it reduces US withholding tax on certain US-source passive income (dividends, interest, royalties) paid to a Sri Lankan resident and supports treaty relief for independent personal services where you have no US fixed base. You claim these benefits by giving your US payer a Form W-8BEN (individual) or W-8BEN-E (entity) with your Sri Lankan tax ID (TIN). Second, and more relevant for most founders: the profit your US LLC or C-Corp earns from serving clients is generally taxed by the US only if the company has a US trade or business or permanent establishment. If you run the company entirely from Sri Lanka with no US office, staff, or dependent agent, the treaty's permanent-establishment rules support the position that those profits are not US-taxed as effectively-connected income. But this is fact-specific, so confirm your exact structure with a cross-border tax advisor. The treaty does not exempt you from Sri Lankan tax on your worldwide income.
StableCorp helps founders in Sri Lanka form a US company, get an EIN and a US business account, and get paid on compliant rails, both sides.
Get startedFrequently asked questions
Do I need to live in the US or have a US visa to own a US LLC or C-Corp?
No. Sri Lankan founders can form and fully own a US LLC or C-Corp while living in Sri Lanka, get an EIN, and open a US business account through our licensed partner remotely. Ownership isn't tied to any visa. What you can't do is work physically inside the US without the right immigration status. But running the company from Sri Lanka is fine.
Will the US–Sri Lanka tax treaty stop me being taxed twice?
It's designed to. The in-force treaty (signed 1985, amended by a 2002 Protocol, in force since 12 July 2004) reduces US withholding on certain US-source income and, combined with Sri Lankan foreign tax credits, helps prevent the same income being fully taxed in both countries. You claim US-side benefits with Form W-8BEN/W-8BEN-E. It does not exempt your worldwide income from Sri Lankan tax; you still file with the IRD.
How do I legally receive my USD earnings in Sri Lanka?
Open a Business Foreign Currency Account (BFCA), or a Personal Foreign Currency Account (PFCA) if you're an individual freelancer. These let residents earning foreign exchange from services to non-residents receive and hold USD or EUR without forced conversion to rupees, under the Foreign Exchange Act No. 12 of 2017. StableCorp settles in USD, EUR, or INR into that account through our licensed partner. Keep your invoices and contracts; banks will ask for the underlying transaction when crediting remittances.
Can I wire personal savings from Sri Lanka to fund the US entity?
Not without CBSL permission. Under Section 22 of the Foreign Exchange Act No. 12 of 2017, sending rupees out to fund or capitalise a foreign company is an outward capital transaction that needs Central Bank of Sri Lanka permission under the Outward Investment framework. Bringing earnings home is broadly permitted; sending capital out is not. The practical approach is to capitalise and run the US entity from its own US-side income rather than remitting savings from Sri Lanka. Confirm your specific case with a local advisor.
Can I get paid in USDC and cash out to rupees?
StableCorp settles your US company's earnings in USD, EUR, or INR into your Business or Personal Foreign Currency Account through our licensed partner. It does not deliver rupees or offer an LKR payout. Sri Lanka has no virtual-asset framework, crypto isn't legal tender, and a 2021 CBSL directive restricts banks and cards from facilitating crypto, so treat any stablecoin balance as a settlement layer that is converted to bankable foreign currency rather than something you cash out to rupees directly. Document the source of every inflow and confirm the current CBSL position before relying on it.