How to pay Chinese suppliers from Sri Lanka
To pay a Chinese supplier from Sri Lanka, send US dollars by telegraphic transfer through a commercial bank in Sri Lanka to the supplier's company account in China or Hong Kong, quoting the proforma invoice number. Since 19 June 2026, banks report every import payment to Sri Lanka Customs and may send advance payments only for importers registered with Customs. This guide covers the rules, the payment currency, the routes, published bank charges, the documents and the risks of paying through agents.
- The Imports and Exports (Control) Regulations No. 06 of 2026 require banks to assign a unique number to every import payment and notify Sri Lanka Customs of its details.
- From 19 June 2026, commercial banks may not make an advance payment for an import unless the importer is registered with Sri Lanka Customs as an eligible importer.
- Rupees cannot be converted into foreign currency and credited to a BFCA, so importers pay from earned dollars or buy dollars from the bank at the time of payment.
- Goods exporters may pay current export-related costs, such as raw material imports, from export proceeds before converting the residual by the 10th day of the following month.
- The CBSL renewed its CNY 10 billion currency swap with the People's Bank of China in December 2024 for another three years.
- People's Bank charges 1% on an outward transfer for imports from a rupee account and 0.25% from a foreign currency account, plus Rs. 2,000 for SWIFT.
How to pay a Chinese supplier from Sri Lanka: the short answer
A Sri Lankan importer pays a Chinese supplier through a commercial bank in Sri Lanka. The bank sends the payment by SWIFT, usually in US dollars, gives it a unique transaction number, and reports it to Sri Lanka Customs so that the payment can be matched to the goods when they arrive. SWIFT is the international messaging network banks use for cross-border payments, and each bank has an 8 or 11 character SWIFT code.
The usual sequence for an order from China is:
- Register with Sri Lanka Customs as an eligible importer and keep your Taxpayer Identification Number (TIN) to hand. Since 19 June 2026, banks may not make an advance payment for an import unless the importer is registered.
- Agree the price, the payment terms and the Incoterm with the supplier, and get a proforma invoice. An Incoterm is a standard trade term, such as FOB or CIF, that sets who pays freight and insurance. A proforma invoice is the supplier's priced quotation for the order.
- Pay the deposit through your bank as an advance payment for imports, quoting the proforma invoice number. The bank buys the dollars with your rupees, or pays from your Business Foreign Currency Account (BFCA).
- Pay the balance on open account against a copy of the bill of lading, or through a letter of credit or a documentary collection.
- Clear the goods with a customs declaration, using the same supplier name, invoice number and value that the bank reported.
A BFCA is the foreign currency account a Sri Lankan business opens to hold foreign exchange it earns from non-residents. This guide covers the Sri Lankan rules, the payment currency, the routes, published bank charges, the documents and the risks of paying through agents. For the supplier's side, such as how Chinese factories invoice and why many use a Hong Kong account, see our general guide on how to pay suppliers in China.
Sri Lankan rules on import payments in 2026
Import payments in Sri Lanka are governed by two sets of rules. The Imports and Exports (Control) Act, No. 1 of 1969, and the regulations under it set how banks handle and report import payments. The Foreign Exchange Act, No. 12 of 2017, administered by the Central Bank of Sri Lanka (CBSL) and its Department of Foreign Exchange, sets which accounts the money can come from.
Regulations No. 06 of 2026: every import payment reported to Customs
The Imports and Exports (Control) Regulations No. 06 of 2026 were published in Gazette Extraordinary No. 2493/39 on 18 June 2026 and took effect on 19 June 2026. They amend the Special Import License and Payment Regulations No. 1 of 2011, with the stated aim of strengthening the monitoring of outward remittances for imports. All banks must assign a unique number to each transaction and notify Sri Lanka Customs of its details at once. Importers must be registered with Sri Lanka Customs as eligible importers before making advance payments, and commercial banks may not make an advance payment for an importer that is not registered. The Controller General of Imports and Exports issues operational instructions to Customs and the banks.
| What the bank reports to Customs | Why it matters to you |
|---|---|
| Your TIN and address as remitter | The payment is tied to your company's tax and customs records |
| The beneficiary's address and account number | The supplier you pay must be the supplier on your documents |
| Bank and branch codes, currency and amount | The value paid can be compared with the value declared |
| Terms of payment and delivery | Advance, open account or documentary terms are recorded for each payment |
| Remittance date and proforma invoice number | Each payment is linked to a specific order |
| Description of goods | Customs can match the payment to the goods that arrive |
Source: Government of Sri Lanka, Gazette Extraordinary No. 2493/39, Imports and Exports (Control) Regulations No. 06 of 2026 (18 June 2026), as published on 29 October 2026.
Where the dollars can come from
Under CBSL Directions No. 05 of 2021, a BFCA can make outward remittances for current transactions, which include import payments, but Sri Lankan rupees cannot be converted into foreign currency and credited to a BFCA. So an importer pays a Chinese supplier either with dollars it earned and holds in its BFCA, or with dollars its bank sells it against rupees at the time of payment.
Exporters who also import have a useful window. Under the Repatriation of Export Proceeds into Sri Lanka Rules No. 2 of 2026, goods exporters must convert the residual of their export proceeds into rupees by the 10th day of the following month, but the residual is what remains after permitted payments, which include current export-related transactions and commitments for one month. An apparel or rubber exporter that buys raw materials from China can therefore pay that supplier from its export dollars before the conversion deadline.
Paying in US dollars or Chinese yuan
Most Chinese factories quote export orders in US dollars, and most Sri Lankan import payments are made in dollars. Yuan is also an option at some banks: People's Bank offers its BFCA in 16 currencies, including the Chinese yuan (CNY, also called renminbi).
At central bank level, the CBSL and the People's Bank of China signed a bilateral currency swap of CNY 10 billion in March 2021 to promote bilateral trade and direct investment. In December 2024 the two central banks renewed it for another three years on the same terms. A currency swap lets each central bank obtain the other's currency. It does not by itself mean that your bank sends yuan.
| Point | Pay in USD | Pay in yuan (CNY) |
|---|---|---|
| What most suppliers quote | USD is the usual invoice currency for export orders | Some suppliers accept or prefer yuan; ask |
| Source of funds | BFCA dollars, or dollars bought with rupees | A CNY account, or yuan bought with rupees |
| Conversion | Rupees to dollars at the bank's rate, unless paid from earned dollars | Rupees to yuan at the bank's rate; the supplier does not convert |
| Central bank arrangement | Not applicable | CBSL and PBoC swap of CNY 10 billion, renewed December 2024 for three years |
| Availability | All banks dealing in foreign exchange | Ask whether your bank sends yuan and at what rate |
Sources: CBSL, renewal of the bilateral currency swap agreement with the People's Bank of China (January 2025); People's Bank, Business Foreign Currency Account key facts. As published on 29 October 2026.
Paying in yuan saves the supplier a conversion, not you. Some suppliers price a yuan order slightly lower for that reason, so compare the yuan quote at your bank's rate with the dollar quote before you choose.
How the money reaches a Chinese supplier
Many Chinese factories invoice through a Hong Kong trading company with a Hong Kong bank account, and others give a mainland account. Because your bank reports the beneficiary's account and address to Customs, the beneficiary should be the company named on the proforma invoice and contract.
| Supplier asks for | How you pay from Sri Lanka | What to check |
|---|---|---|
| USD to a Hong Kong company account | Outward telegraphic transfer by SWIFT in USD | The Hong Kong company is the seller on the proforma invoice |
| USD to a mainland China account | Outward telegraphic transfer by SWIFT in USD | The supplier's bank checks the contract and invoice before it credits the funds |
| Yuan (CNY) to a mainland account | Ask your bank whether it sends yuan and at what rate | Compare the yuan quote with the dollar route |
| Letter of credit | Your bank issues the credit; the supplier is paid against documents | Documents must match the credit exactly |
| Documents against payment or acceptance | Banks release the shipping documents to you against payment or acceptance | The supplier carries more risk than under a credit |
Routes as described in this guide; supplier-side checks from PNC Bank's summary of China's goods trade foreign exchange rules. As published on 29 October 2026.
A telegraphic transfer (TT) is a bank transfer sent by SWIFT message. Sri Lankan banks list it separately for advance payments and for open account payments.
What the supplier's bank checks
China manages foreign exchange through the State Administration of Foreign Exchange (SAFE). As summarized by PNC Bank, a Chinese company must be on SAFE's list of companies with goods trade foreign exchange business, and banks cannot handle foreign exchange for companies that are not on it. The supplier's bank checks each receipt for a genuine trade background, using documents such as the contract, invoice and customs declaration. The same summary states that the remitter and the beneficiary must be the parties to the contract. A payment from a company that is not on the contract can be held while the supplier's bank asks questions.
Deposit, balance and payment terms
The payment term decides when money leaves Sri Lanka, what you hold in return, and how your bank reports the payment.
| Term | How it works | Fit with the Sri Lankan rules |
|---|---|---|
| Advance payment (deposit) | You pay part of the order before production | Only for importers registered with Sri Lanka Customs; reported with a unique transaction number |
| Open account balance | You pay the rest by transfer once the goods have shipped or arrived | Reported to Customs with the terms of payment and delivery |
| Letter of credit | Your bank promises to pay the supplier when it presents documents that match the credit | Bank commission applies; discrepancies delay payment |
| Documents against payment (DP) | The bank releases the shipping documents when you pay | Lower bank cost than a credit; the supplier carries more risk |
| Documents against acceptance (DA) | The bank releases the documents when you accept a bill to pay later | The supplier gives you credit and carries the risk |
Source: Gazette Extraordinary No. 2493/39 for registration and reporting; terms as described in this guide. As published on 29 October 2026.
A letter of credit (LC) is a bank's written promise to pay the seller when it presents documents that comply with the credit's terms. It protects you against paying for goods that were never shipped, but it does not check quality. A supplier that has not traded with you before may ask for an LC on the first order and accept deposit and balance on later orders. Book a pre-shipment inspection before you release the balance on a large order, and check that your customs registration is active before the deposit is due, because the bank cannot send the advance without it.
What it costs: published bank charges
Each Sri Lankan bank publishes its own tariff. The table shows People's Bank's published charges for outward telegraphic transfers for imports. The account you pay from changes the commission.
| Item | From a rupee account or cash | From a foreign currency account |
|---|---|---|
| Outward TT, advance payment for imports | 1%, minimum Rs. 5,000, maximum Rs. 200,000 | 0.25%, minimum Rs. 4,000, maximum Rs. 100,000 |
| Outward TT, open account import payment | 1%, minimum Rs. 5,000, maximum Rs. 200,000 | 0.25%, minimum Rs. 5,000, maximum Rs. 100,000 |
| Foreign draft, advance payment for imports | 0.5%, minimum Rs. 4,000, maximum Rs. 200,000 | 0.25%, minimum Rs. 4,000, maximum Rs. 100,000 |
| SWIFT charge, MT103 | Rs. 2,000 | Rs. 2,000 |
| SWIFT charge, MT103 with MT202 | Rs. 3,000 | Rs. 3,000 |
Source: People's Bank, Foreign Currency Tariff (July 2026), as published on 29 October 2026. The 1% commission on rupee-funded transfers applies from 20 May 2026. Other banks set their own charges.
MT103 is the SWIFT message for a customer payment, and MT202 is the cover message banks send between themselves. On an advance payment worth Rs. 9 million, a 1% commission from a rupee account is Rs. 90,000, while 0.25% from a foreign currency account is Rs. 22,500. The rupee-account maximum of Rs. 200,000 applies from Rs. 20 million. Three costs sit outside the tariff. The first is the exchange rate at which the bank sells you dollars or yuan, so ask for the rate before you confirm. The second is correspondent bank charges deducted on the way to China. The third is the supplier's own bank charge.
Charge codes
Every SWIFT payment carries a charge code. OUR means you pay all transfer fees and the supplier receives the full invoice amount. SHA shares the fees, so intermediary banks can deduct theirs from the amount. BEN puts all fees on the supplier. A payment that arrives short delays shipment while the supplier queries the gap. Check the supplier bank's code with our SWIFT code lookup before the first payment.
Documents that tie the payment to customs
Your bank, Sri Lanka Customs and the supplier's bank each match the same facts: the supplier's name and account, the proforma invoice number, the goods and the value. Since June 2026 your bank sends those facts to Customs for every payment, so keep them identical across every document.
| Stage | Document | Issued by |
|---|---|---|
| Before the first advance payment | Registration as an eligible importer; TIN | Sri Lanka Customs; Inland Revenue |
| Before ordering | Proforma invoice and contract naming the supplier's company and its bank account | Supplier and buyer |
| Each payment | Payment application quoting the proforma invoice; unique transaction number; SWIFT confirmation | Importer and bank |
| After shipment | Bill of lading or air waybill, commercial invoice, packing list, certificate of origin where required | Carrier and supplier |
| Clearance | Customs declaration, usually lodged by a licensed customs house agent | Importer's agent |
Source: Gazette Extraordinary No. 2493/39 for registration and reporting. Typical sequence; requirements vary by bank and product. As published on 29 October 2026.
A bill of lading is the document the shipping line issues when it receives the goods. Ask the supplier for a copy before you pay the balance, and check that the shipper, consignee and goods match the invoice. If the final invoice value differs from the proforma, tell your bank and your customs agent before clearance, so the payment record and the declaration agree. If the supplier changes its bank details by email, confirm the change by telephone on a number you already hold before the bank pays.
Hundi, agents and crypto: what goes wrong
Some importers pay a Chinese supplier through a hundi dealer or an agent who collects rupees in Colombo and pays from an account in China. Hundi is an informal money transfer system that settles through a network of dealers rather than through banks. The facts below are what an importer should weigh before using these routes.
- The payment is missing from the Customs record. Since 19 June 2026, banks report every import payment to Sri Lanka Customs with the supplier, the amount and the proforma invoice number. Goods paid through an agent arrive with no matching bank record.
- Advance payments run through commercial banks. The 2026 regulations make customs registration a condition for a bank to send an advance, which assumes the advance is sent by a bank.
- The supplier's bank may query it. China's rules expect the payer to be the party on the contract. A transfer from an agent's account is a payment from a third party.
- There is no trace. A SWIFT transfer from your bank carries a reference and can be traced through the banks. Cash handed to an agent cannot.
- Crypto has no license holder in Sri Lanka. The CBSL stated in July 2022 that it has not licensed or authorized any entity to operate virtual currency schemes or exchanges, and described virtual currencies as unregulated. On 29 July 2026 the Daily FT reported that the Cabinet had approved steps to regulate virtual asset service providers, with the Securities and Exchange Commission as proposed regulator.
Where Helm fits, and a checklist
Helm is a financial technology company, not a bank. Accounts are held with regulated partner institutions. Helm works with companies registered in Sri Lanka and provides USD account details in the company's own name, with a US routing and account number that receives ACH, Fedwire and SWIFT payments.
The Sri Lankan rules shape how it fits. Import payments from Sri Lanka are made and reported by commercial banks in Sri Lanka, and export proceeds must be received in Sri Lanka within 180 days. A Helm account sits outside Sri Lanka, so it does not replace your Sri Lankan bank for paying imports into Sri Lanka. It fits these flows:
- A trading affiliate outside Sri Lanka that buys from China for customers in other markets can send international payments by SWIFT to Chinese suppliers, with the rate, fee and expected arrival shown before sending.
- Foreign buyers of Sri Lankan goods can hold dollars and pay their Sri Lankan suppliers from their own account.
- Trade finance, such as supplier finance and working capital, is arranged case by case.
Confirm with your bank or the Department of Foreign Exchange that any account abroad is permitted for your purpose before opening one. Each account has a named account manager, and review questions are answered in writing within one business day. Helm agrees pricing with each business in writing before the account opens, and shows the rate, the fee and the expected arrival before you confirm each payment.
Checklist
- Register with Sri Lanka Customs as an eligible importer before the first deposit is due.
- Get a proforma invoice and check that the seller on it is the company you will pay.
- Pay from your BFCA where you hold earned dollars, since the commission is lower than on a rupee-funded transfer.
- Exporters: pay raw material suppliers from export proceeds before the 10th-day conversion deadline.
- Send each payment by SWIFT on OUR terms, quoting the proforma invoice number.
- Pay the balance against a copy of the bill of lading, or use a letter of credit for a new supplier.
- Keep the bank's transaction number with the invoice, bill of lading and customs declaration for each order.
For how importers elsewhere organize supplier payments, see the importers page.
Open a Helm account
USD, EUR and GBP accounts in your company's name, with a named account manager.
Open accountQuestions
How do I pay a Chinese supplier from Sri Lanka?
Pay through a commercial bank in Sri Lanka by outward telegraphic transfer in US dollars to the supplier's company account in China or Hong Kong, quoting the proforma invoice number. The bank assigns the payment a unique number and reports it to Sri Lanka Customs.
Do I need to register with Sri Lanka Customs to pay a supplier in advance?
Yes. Under the Imports and Exports (Control) Regulations No. 06 of 2026, in force from 19 June 2026, importers must be registered with Sri Lanka Customs as eligible importers, and commercial banks may not make advance payments for importers that are not registered.
What information does my bank send to Sri Lanka Customs about an import payment?
The bank reports your TIN and address, the beneficiary's address and account number, bank and branch codes, currency and amount, terms of payment and delivery, the remittance date, the proforma invoice number and a description of the goods, linked to a unique transaction number.
Can I buy dollars with rupees and put them in my BFCA to pay a supplier later?
No. CBSL Directions No. 05 of 2021 state that rupees cannot be converted into foreign currency and credited to a BFCA. You can pay from dollars you earned and hold in the BFCA, or buy dollars from your bank at the time of payment.
Can a Sri Lankan exporter pay a Chinese supplier from export proceeds?
Yes, within the conversion rules. Goods exporters must convert the residual of export proceeds into rupees by the 10th day of the following month, but the residual is what remains after permitted payments, which include current export-related transactions and one-month commitments.
Can I pay a Chinese supplier in yuan from Sri Lanka?
It depends on your bank. People's Bank offers foreign currency accounts in CNY, and the CBSL renewed its CNY 10 billion currency swap with the People's Bank of China in December 2024, but each bank decides whether it sends yuan and at what rate.
What do Sri Lankan banks charge to send money to China?
Each bank publishes its own tariff. People's Bank charges 1% (minimum Rs. 5,000, maximum Rs. 200,000) on an outward transfer for imports from a rupee account and 0.25% from a foreign currency account, plus Rs. 2,000 for the SWIFT message.
Why does my Chinese supplier want payment to a Hong Kong account?
Many Chinese factories sell through a Hong Kong trading company that holds a Hong Kong bank account. Make sure the Hong Kong company is the seller on the proforma invoice, because your bank reports the beneficiary's account to Sri Lanka Customs.
Is it safe to pay a Chinese supplier through hundi from Sri Lanka?
Since June 2026 banks report every import payment to Sri Lanka Customs, so goods paid through hundi arrive with no matching bank record. The supplier's bank may also query a payment that comes from someone other than the buyer on the contract.
Can I pay a Chinese supplier with USDT from Sri Lanka?
The CBSL stated in July 2022 that it has not licensed or authorized any entity to operate virtual currency schemes or exchanges. In July 2026 the Cabinet approved steps to regulate virtual asset service providers, but no regime was in place, so take advice before using a stablecoin for an import payment.
References
- Government of Sri Lanka: Gazette Extraordinary No. 2493/39, Imports and Exports (Control) Regulations No. 06 of 2026 (18 June 2026)
- CBSL Department of Foreign Exchange: Directions No. 05 of 2021, Business Foreign Currency Accounts
- CBSL Department of Foreign Exchange: Gazette No. 2492/10, Repatriation of Export Proceeds into Sri Lanka Rules No. 2 of 2026
- Central Bank of Sri Lanka: Renewal of the bilateral currency swap agreement with the People's Bank of China
- People's Bank: Foreign Currency Tariff (July 2026)
- Central Bank of Sri Lanka: Public awareness in relation to the use of virtual currencies in Sri Lanka (12 July 2022)
- Daily FT: Cabinet backs legal framework to regulate virtual asset service providers (29 July 2026)
- PNC Bank: Navigating China's regulations on foreign exchange for goods trade
This guide is general information for businesses, not financial, legal or tax advice. Rules, fees and timings were checked against the sources listed on the review date and may change.