Doing Business in the United Kingdom VS Sri Lanka

Doing Business in the United Kingdom VS Sri Lanka – A Comparison

Choosing between the United Kingdom and Sri Lanka as a business destination can be tough. Both countries present unique strengths. Sri Lanka offers access to South Asian markets and a low-cost workforce. The United Kingdom, on the other hand, is praised for its high quality of life, strong legal protections, and lower costs for company setup—especially for small and medium-sized enterprises.

This comparison will help entrepreneurs and investors decide where their business has the best chance to grow. If you’re exploring starting a business in the United Kingdom, firms like 3E Accounting can simplify the process for you.

Key Comparison Points

Business Environment

• The United Kingdom: Offers political stability, a reliable legal framework, and consistent government support for entrepreneurs. It’s a top choice for companies seeking transparent regulations and investor confidence.
• Sri Lanka: Provides a growing post-conflict economy with reforms in place, but faces political volatility and regulatory inconsistencies that may affect long-term investment planning.

Taxation

• The United Kingdom: Corporate tax is set at 25%. It also offers generous tax incentives for R&D, innovation, and startups. Capital gains are taxable with available reliefs.
• Sri Lanka: The corporate tax rate ranges from 14% to 30%, depending on the business sector. Export-focused firms may benefit from lower rates under certain incentives.

Ease of Company Incorporation

• The United Kingdom: Known for its fast, fully online registration process. Providers like company incorporation in the United Kingdom make it possible to register a company in a day.
• Sri Lanka: Requires more manual documentation and in-person steps, though the government is working toward more digitalisation. The process still takes several days or weeks.

Cost of Living and Business Operations

• The United Kingdom: Offers affordable company incorporation services and flexible office rental options, especially outside London. Living costs vary based on location.
• Sri Lanka: Provides one of the lowest cost bases in Asia, making it attractive for labour-intensive industries. However, infrastructure costs and import taxes may add to overheads.

Access to Markets

• The United Kingdom: Has strong trade links with the EU, US, and Asia. Its global reputation and network of trade agreements make it a strategic gateway for international business.
• Sri Lanka: Offers proximity to India and other South Asian markets. It also benefits from GSP+ trade preferences, but limited international agreements reduce its competitiveness globally.

Quick Comparison Overview

Here’s a quick overview of the key differences for easy reference.

Factor	United Kingdom	Sri Lanka
Business Environment	Stable, transparent, SME-friendly	Growing, but politically volatile
Corporate Tax Rate	25%	14% to 30%
Capital Gains Tax	Taxable, with exemptions	Generally not applicable on listed shares
Ease of Incorporation	Fully digital, within 24 hours	Manual process, takes days to weeks
Business Costs	Moderate, varies by region	Low labour cost, higher infrastructure cost
Market Access	Global reach via trade agreements	Regional access, limited global deals

Benefits of Choosing 3E Accounting

When it comes to starting a business in the United Kingdom, navigating the legal and administrative processes can be complex without the right support. That’s where 3E Accounting comes in. As a trusted partner for company incorporation, we provide tailored solutions for entrepreneurs and investors looking to establish a strong business presence. Whether you need help with company registration or expert guidance on setting up businesses in the UK, our experienced team ensures a smooth and efficient process.

From full company incorporation services to ongoing support like corporate secretarial and company secretary services, we offer a complete suite of solutions to support your company setup. Let us help you focus on what matters most—growing your business. Contact 3E Accounting today and take the first step toward successful expansion.

 

Frequently Asked Questions

Is the United Kingdom a better option for company incorporation than Sri Lanka?

Answer: Yes, the United Kingdom offers a faster and more efficient online process. With company incorporation in the United Kingdom, registration can be completed in as little as 24 hours, compared to several days or weeks in Sri Lanka.

What are the tax differences between the UK and Sri Lanka for businesses?

Answer: The UK has a fixed corporate tax rate of 25% with available R&D reliefs. Sri Lanka uses a tiered system ranging from 14% to 30%, depending on industry and revenue.

How does cost of business setup compare in Sri Lanka vs the UK?

Answer: Sri Lanka offers lower labour costs, but the UK offers more affordable digital company incorporation services and modern infrastructure, especially outside major cities.

Is Sri Lanka good for startups?

Answer: Sri Lanka can be a good fit for startups in agriculture, manufacturing, and tourism. However, foreign startups may face regulatory hurdles. You can consider setting up businesses in the United Kingdom for more stable conditions.

Where can I find guidance on starting a business in the United Kingdom?

Answer: You can use this complete guide to starting a business in the United Kingdom by 3E Accounting for expert step-by-step advice.

What support is available for foreign investors in the UK?

Answer: There are several business finance support options available, including tax reliefs and funding schemes for innovation and green businesses.

How do I register a company in the UK as a foreigner?

Answer: Foreigners can register a company online through providers like 3E Accounting. Read this company registration guide to get started.

Can I get help with secretarial services in the UK?

Answer: Yes, 3E Accounting offers corporate secretarial and company secretary services to keep your business compliant with UK laws.