Starting a Daraz/online store in Sri Lanka from Australia: Setup, logistics, taxes.

Section 1: The Foundation: Business Setup & Daraz Registration

Before you list your first product, you need a solid legal foundation in Sri Lanka. Setting up a proper business and gathering the right documents from the start will prevent major problems later. This process requires a local presence, so having a trusted family member or partner on the ground is key.

Choosing Your Business Structure

You cannot operate a Daraz store in Sri Lanka as a foreign individual; you must register a local business. The two most common options are a Sole Proprietorship or a Private Limited (Pvt) Ltd company. A sole proprietorship is simpler and faster to set up, making it ideal for small operations. However, a (Pvt) Ltd company offers better legal protection, separating your personal assets from the business. For a detailed comparison, read our guide on how to register a small business in Sri Lanka: Sole proprietorship vs (Pvt) Ltd vs partnership.

Essential Documents and Bank Account

Once your business is registered, you must open a Sri Lankan bank account in the business's name. Daraz will deposit your earnings into this account. You will need the following documents for the Daraz registration process:

• Business Registration Certificate: Proof that your business is legally registered.
• Owner's ID: A copy of the National Identity Card (NIC) of the registered owner or a company director.
• Bank Account Proof: A copy of a cancelled cheque or a bank statement clearly showing the business name and account number.

Signing Up on Daraz Seller Center

With these documents ready, go to the Daraz Seller Center website to begin your application. You will need to fill in your store details and upload clear copies of your documents. Ensure that the name on your business registration, ID, and bank account all match perfectly, as any errors will cause delays.

For more details on the platform itself, explore our guide on how to start selling on Daraz Sri Lanka in 2026.

Section 2: Product Sourcing and Listing Optimization

Once your store is set up, you need products to sell. Finding the right items and presenting them well are the keys to making sales. Since you are managing the store from Australia, you have a few ways to source your goods.

A popular method is to partner with local suppliers in Sri Lanka. A trusted family member or friend can help you find reliable wholesalers or small manufacturers. This approach keeps your shipping costs low and supports the local economy. Alternatively, you can import unique products from Australia that are not common in Sri Lanka. While this can create a niche market, be mindful of shipping costs and import duties.

Finding What Sells

Before you commit to a product, research the Sri Lankan market. See what items are in high demand. A great starting point is to check the top trending product categories on Daraz. This shows you what customers are already buying, from electronics to beauty products. Also, look at what your competitors are selling and read customer reviews to find gaps in the market.

Making Your Products Stand Out

How you list your items on Daraz is crucial. This is called listing optimization. Follow these simple tips:

• High-Quality Photos: Use clear, bright images from multiple angles. Good photos build trust and help customers see exactly what they are getting.
• Detailed Descriptions: Write clear and simple descriptions. Use bullet points to list features and benefits. Answer common questions a buyer might have about size, material, or warranty.
• Smart Pricing: Your price should be competitive but also profitable. Calculate all your expenses, including the product cost, shipping, packaging, and seller fees. Understanding Daraz fees and profit margins is essential for setting the right price.

Section 3: Cross-Border Logistics and Fulfillment

Managing your business from Australia means you need a smart way to get products to your customers in Sri Lanka. This is where logistics and fulfillment come in. Your success depends on a reliable system for storing, packing, and shipping orders on time.

Sourcing Your Products

You have several options for finding products. You can source them from Australian suppliers, buy in bulk from China through sites like Alibaba, or partner with local manufacturers in Sri Lanka. Shipping individual products from Australia is often too expensive due to high international courier fees. For this reason, many sellers find it more profitable to source their goods within Asia or directly in Sri Lanka.

Getting Orders to Customers

Once a customer places an order, you need a system to fulfill it. Here are the most common models:

• Local Partner: You can work with a trusted family member or hire a local employee in Sri Lanka to manage your inventory. They can pack and ship orders as they come in. This is a great, low-cost option when you are just starting out.
• Third-Party Logistics (3PL): For a more professional and scalable solution, you can hire a 3PL company in Sri Lanka. They handle everything from warehousing and inventory management to packing and delivery, freeing you up to focus on marketing and sales.
• Fulfilled by Daraz (FBD): If you are selling on Daraz, their FBD service is an excellent choice. You send your products in bulk to a Daraz warehouse, and they handle storage, packing, and shipping for every order. You can learn more in our guide on how to start selling on Daraz Sri Lanka.

Handling Imports and Returns

If you import products into Sri Lanka, be prepared for customs duties and taxes. These costs will affect your final product price, so research them carefully. Just as important is having a clear returns policy. A simple and fair return process is crucial to build trust for a new Sri Lankan online store and encourage repeat business.

Section 4: Managing Finances: Payments, Taxes, and Compliance

Running an online store from another country requires careful financial management. You need to handle payments, move money, and follow the tax laws in both Sri Lanka and Australia. Getting this right from the start will prevent future problems.

Receiving Payments and Transferring Funds

If you sell on Daraz, they process customer payments and deposit the funds into your Sri Lankan bank account after deducting their fees. For a separate website, you can use local payment gateways like PayHere or FriMi to accept online payments.

To bring your profits to Australia, you will need to transfer the money from your Sri Lankan bank. Choosing the right service is key to saving on fees. For a detailed comparison, see our guide on the best remittance apps for Sri Lankans in Australia.

Understanding Your Tax Obligations

Taxes can be complex when you operate across two countries. As an Australian resident for tax purposes, you must declare your worldwide income to the Australian Taxation Office (ATO). This includes all profits from your Sri Lankan online store.

At the same time, your business income is generated in Sri Lanka, making it subject to Sri Lankan tax laws. Thankfully, a double tax agreement between the two countries helps prevent you from being taxed twice on the same income. It is highly recommended to work with accountants in both countries to ensure you are fully compliant. For more information, read about tax planning for Sri Lankan expats and ATO compliance.

Staying Compliant

Always maintain clear and organized records of all your sales, expenses, and bank transactions. Good bookkeeping is essential for managing your business effectively and makes tax filing much smoother. Professional advice is a smart investment to navigate the rules correctly.