How to Start a Jewellery Business in Sri Lanka?

Starting a jewellery business in Sri Lanka involves understanding the local market, registering the company, etc. This blog delves into essential aspects of setting up a jewellery business in Sri Lanka, focusing on the mandatory requirements of 60% local ownership. This regulation is important for foreign investors aiming to penetrate the thriving market, underscoring its importance in ensuring prosperous business ventures.

Why start a Jewellery business in Sri Lanka?

Sri Lanka’s jewellery market shines brightly in the global industry. It is celebrated for its exceptional craftsmanship and high-quality precious stones. The country is celebrated not only for its stunning sapphires and other gemstones but also for its rich tradition in jewellery making, which attracts investors and enthusiasts from around the world.

Know about Sri Lanka’s Jewellery Market

Sri Lanka’s jewellery market presents abundant opportunities for new businesses, driven by a diverse consumer base that includes locals and tourists. Demand is particularly strong for authentic Sri Lanka gemstones. Below are the promising areas for individuals to start a Jewellery business in Sri Lanka:

1. Gold Jewellery

Gold remains highly popular, symbolizing wealth and status. The market caters to a range of references from traditional to contemporary designs.

2. Gemstone Jewellery

Given Sri Lanka’s reputation as the Gem Island, there is substantial opportunity in gemstone jewellery. Sapphires, rubies, and other semi-precious stones are in high demand, offering a niche market for unique and valuable pieces.

3. Diamond Jewellery

While historically less prevalent, there is a growing demand for diamond jewellery, especially among younger consumers. This trend creates potential for businesses focusing on modern designs.

4. Bridal Jewellery

Sri Lanka’s cultural heritage ensures a steady demand for bridal jewellery, which is known for its intricate designs and superior craftsmanship. This segment is lucrative due to the significant investments made during weddings.

5. Customs and Design Jewellery

As the middle class expands and disposable income rises, demand for customized and designer jewellery increases. Consumers seek personalized prices that reflect their style and identity.

Steps to Start a Jewellery Business in Sri Lanka

The steps to start a jewellery business in Sri Lanka, the individual needs to follow the following steps:

1. Market Research and Planning

The individual must conduct thorough market research to understand local demand, competitors’ offerings and target demographics. Develop a solid business plan outlining the unique selling proposition, pricing strategy and financial projections.

2. Find a Local Partner

Identify a trustworthy Sri Lankan partner to hold the mandatory 60% ownership. The partner should have industry experience and a strong network.

3. Choose the Business Name and Approval

The individual begins by selecting a suitable name for the business and ensuring it complies with Sri Lankan regulations. After choosing the name, the individual submits it for approval to the Registrar of Companies.

4. Type of Business Entity

Decide on the type of legal structure of the company, such as a private limited company, sole proprietorship, partnership, or public company. Each structure has different implications for ownership, liability, and governance.

5. Appointment of Company Secretary

Sri Lankan law mandates appointing a resident as company secretary before incorporation.

6. Registration of Official Address

A local registered address is required to establish a business in Sri Lanka.

7. Details of Shareholders and Directors

Provide detailed information about the proposed shareholders and directors, including personal details, address, and role within the company.

8. Filing of forms and Submission of Required Documents

To complete the company incorporation in Sri Lanka, one has to fill out the forms with supporting documents with the Department of Registrar of Companies. These documents typically include the company’s AoA, MoA and other required documents.

9. Public Notice

Within 30 days of starting a jewellery business in Sri Lanka, a public notice announcing the business incorporation must be published in the daily newspaper or government gazette, which includes the business name, registered address details, etc.

10. Open a Bank Account

The individual needs to open a corporate bank account. Once the incorporation is completed, the individual must select a corporate bank account in Sri Lanka.

11. Registration for Tax

The individual needs to obtain a Tax Identification Number and register a business for Value Added Tax.

12. Registration of EPF and Stamp Duty

The individual needs to pay stamp duty to the Inland Revenue Department and register for the Employees Provident Fund.

13. Licensing or Exportation Requirements

Depending on the business’s nature and location, additional licenses may be necessary from the National Gem and Jewellery Authority, a Diamond Lapidary license by NGJA and Sri Lanka Customs,

14. SEC or BOI Approval for Public Companies

The business requires Board of Investment approval, and since it operates as a public company, it can secure approval from the Securities and Exchange Commission in Sri Lanka.

Legal Framework for Investing in Sri Lanka’s Jewellery Sector

The key legal framework that governs foreign investments in Sri Lanka includes the Foreign Exchange Act of 2017 and the Board of Investment of Sri Lanka (BOI) of 1978. These laws provide a legal framework and protection for foreign investors looking to invest in a Jewellery Business in Sri Lanka.

The BOI plays an important role in promoting and facilitating foreign investment in Sri Lanka. It offers various incentives to attract foreign investors and various benefits to attract and retain investments.

While Sri Lanka is generally open to foreign investment, in the jewellery sector, foreign investors must partner with local stakeholders, and 60% of ownership is given to Sri Lankan nationals.

The Ministry of Industry and Commerce of Sri Lanka oversees the overall industrial policy and regulatory framework, ensuring that foreign investments align with national economic goals. However, the company registrar ensures that all businesses comply with local laws, including the 60% local ownership requirements for the jewellery sector.

Things to Remember while Starting a Jewellery Business in Sri Lanka

When selling gold, silver or jewellery in Sri Lanka, it is mandatory to stamp the manufacturer’s mark or warranty mark on the items. This mark must be registered with the National Gem and Jewellery Authority. All jewellery must comply with Sri Lankan gold, silver and platinum standards as outlined in the Gazette Notification dated 17.03.2003. These regulations are crucial for maintaining quality and authenticity in the jewellery market, protecting consumers and manufacturers.

60% Local Ownership Mandate for Sri Lanka’s Jewellery Business

The 60% local ownership rule mandates that foreign investors collaborate with Sri Lankan nationals, who must maintain at least 60% ownership in any new business venture, including the jewellery industry. This regulation limits foreign investors to hold a maximum of 40% ownership, with the majority stake retained by local partners.

The 60% local ownership rule was implemented under Sri Lanka’s overarching economic strategy to promote local entrepreneurship and ensure equitable distribution of benefits from foreign investments among local communities. This policy aims to enforce substantial local ownership, actively involving local entrepreneurs in the jewellery sector; it also aims to keep a larger portion of economic benefits within the country, fostering local economic growth and development.

This rule poses several implications for foreign investors, including:

  • Foreign investors will experience restricted control over the business due to their minority ownership.
  • Profits generated by the business must be divided based on the ownership percentage, with 60% allocated to local partners and 40% to foreign investors.
  • Establishing a robust and dependable partnership with local stakeholders is essential for ensuring the business’s success.

Key Challenges in Starting a Jewellery Business in Sri Lanka

Starting a jewellery business in Sri Lanka offers substantial rewards, yet foreign investors encounter several challenges in achieving success. Below are some key challenges:

  1. It’s important to understand local business manners, strategies, negotiation styles, and norms of communication.  
  2. Following Sri Lanka’s regulatory framework presents complexities.
  3. Acquiring necessary licenses and permits and complying with local laws demands thorough preparations. 
  4. Meeting the requirements of allocating 60% ownership to local partners can be challenging.
  5. The Sri Lankan jewellery market is fiercely competitive.
  6. Competing with established international brands already present in Sri Lanka’s market adds further challenges.

Roadmap to Success for Launching a Jewellery Business in Sri Lanka

To overcome the challenges in the Jewellery business in the market of Sri Lanka, follow the following roadmap to achieve success:

  • Dedicate time and resources to seek out trustworthy and experienced local partners.
  • Explore joint ventures with established local enterprises to quickly establish credibility in the market.
  • Undertake thorough market research to grasp consumer preferences and market dynamics.
  • Create products that reflect local cultural values to encourage a loyal customer following.
  • Engage actively with local authorities and industry associations.
  • Develop marketing campaigns that reflect local culture and values.
  • Utilize digital marketing strategies to reach a wider audience.
  • Maintain high standards of quality in the jewellery products.


Starting a jewellery business in Sri Lanka offers immense opportunities. By understanding and directing these factors effectively and leveraging local partnerships, market insights, and quality craftsmanship, foreign investors can successfully establish and grow the business in the Sri Lankan market.


  1. What are the primary types of jewellery popular in Sri Lanka?

    Sri Lanka's jewellery market is diverse, with a significant demand for gold, diamonds, gemstones, custom or designer jewellery, etc.

  2. What is the legal framework required for foreign investors to start a jewellery business?

    Foreign investors must partner with local Sri Lankan nationals who hold at least 60% ownership in the business. Also, needs to adhere to local registration, taxation and licensing regulations.

  3. What steps are involved in registering a jewellery business in Sri Lanka?

    The steps include market research, choosing a local partner, brand name, and business entity, and appointing a company secretary.

  4. How can digital marketing benefit a jewellery business in Sri Lanka?

    Digital marketing can help jewellery businesses reach wider customers, build brand awareness, and engage with potential customers to maintain growth.

  5. What is the full form of NGJA?

    The full form of NGJA is the National Gem and Jewellery Authority for licencing and quality standards.

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