PayPal in Sri Lanka: what works in 2026, and what doesn’t

What changed in May 2026

For years, Sri Lankan PayPal accounts could send money but not receive it. On 15 May 2026, PayPal launched a receiving service with local partner banks. You link your PayPal account to your bank, receive payments from people abroad, and withdraw to the same bank account.

It doesn’t make PayPal a full business tool in Sri Lanka yet. Here is what PayPal’s own Sri Lanka page showed on 4 November 2026:

How to set it up

You start from your bank, not from PayPal:

• Sampath Bank: log in to Sampath’s online banking, open the PayPal section, and submit the request to sign up or link. Once the bank confirms, continue to PayPal to create or link your account.
• Commercial Bank: in the ComBank app, open Portfolio and choose Connect under “Connect your PayPal account”, then sign up or log in to PayPal.

After that, money you receive lands in your PayPal balance, and you withdraw it to the linked account.

What it costs

PayPal doesn’t publish separate Sri Lankan prices. Its standard fees for receiving payments apply, and your bank sets its own withdrawal charge. Check PayPal’s fee page and ask your bank before you quote prices to clients, because the two together, plus the exchange rate, decide what reaches you.

When the Sri Lankan PayPal route is enough

It works well if:

• your clients abroad are happy to pay you by PayPal;
• you invoice a few clients by sending them your PayPal email address;
• you don’t need customers to pay by card on your own website.

In that case, you may not need a US company at all.

When you still need a company abroad

The Sri Lankan route is personal-only for now, with no PayPal Checkout and no invoicing. You’ll need a company in a supported country if you want to:

• take card payments on your own website or Shopify store;
• charge subscriptions;
• sell through a platform that only pays out to a business account.

Stripe still doesn’t support Sri Lanka, so most founders form a US LLC and use Stripe with Mercury.

PayPal Business through a US LLC

A US LLC can also open a US PayPal Business account and add PayPal Checkout to its website, with payouts to Mercury. The catch: PayPal asks the owner of a US business account for a US taxpayer number. As a Sri Lankan owner without an SSN, that means an ITIN (Individual Taxpayer Identification Number) from the IRS.

Entryly can apply for your ITIN for $350. It isn’t part of the standard formation package, so message us on WhatsApp to add it. If you only need card payments, Stripe doesn’t need an ITIN from you: your LLC’s EIN is enough.