Licence Holding Structure and Separate Registration in Sri Lanka

1. Key takeaways

GRZAN’s recommendation for the licence-holding structure of Sri Lankan projects is that an independent licence holder — a legally registered local entity that takes no part in channel distribution — act as the MAH and hold the registration certificate, with distributors signing a separate distribution agreement. The basis is the official statement of MAH responsibility: the MAH is responsible for registration, licensing, import, sale and distribution, handling of quality incidents, and all related matters, and its name appears on the registration certificate. Separating the channel from this role means the registration certificate is unaffected whenever the distributor is changed.

The recommendation applies the published MAH definition to its logical conclusion. If the law loads every responsibility — regulatory, commercial and quality-related — onto the entity named on the certificate, then whoever occupies that name should be chosen for reliability, not for reach into the sales channel. Distribution capability is replaceable and contractible; registration standing is not. The sections below set out the published basis, the reasoning, and the contractual instruments that make the separation work in practice.

2. Legal basis

The published MAH requirements and post-market responsibilities, as stated on the medical device pages of the NMRA website, are consolidated in the table below. They are the legal raw material from which the recommended structure is derived, and every element of the three-document set described later traces back to one of these rows.

3. Expert insights

Insight one: the core problem this structure solves is hostage risk. When the MAH is simultaneously the distributor, the registration certificate becomes a bargaining chip in commercial negotiations. Every renewal, every variation and every continued import runs through a counterparty who profits from the product’s dependence on them. Once the roles are separated, the distributor holds only the right to sell, not the qualification to enter the market — and the balance of the relationship shifts accordingly. A manufacturer negotiating with its distributor then negotiates about volume and price, not about access to its own registration; the threat of losing the market entirely no longer lives in the contract. This is also why the separation should be made at the start of the project, before any commercial relationship has accumulated a dependence worth exploiting.

Insight two: an independent MAH must have genuine performance capability. It must be able to import, to report through the vigilance system, and to cooperate with surveillance and recall. A licence holder willing only to lend its name cannot carry these obligations. The published responsibilities are not nominal — they include handling quality incidents and answering to the Market Control Division across seven post-market functions. Before appointing an independent holder, the manufacturer should verify operational substance: import licences, trained personnel for vigilance, a documented willingness to appear before regulators, and the financial capacity to run a recall it did not cause. A name on a certificate without substance behind it converts every risk in the market into a risk of the certificate itself. Selection should therefore run on capability criteria documented in writing, not on referral or familiarity.

Insight three: four contractual clauses cannot be omitted. Who keeps the original registration certificate, who initiates renewal, how cooperation on certificate transfer works when the relationship ends, and who bears GDP compliance — these four clauses decide whether the structure actually works on the ground. Each clause answers a failure mode: a certificate held hostage, a renewal missed because nobody was contractually obliged to file it, a transfer blocked at the end of the relationship, and a GDP gap where both parties assumed the other was responsible. Contracts that leave any of the four silent have not yet created the structure; they have only described it. Drafting all four before signature is materially cheaper than negotiating them mid-dispute, when the certificate has already become the contested asset.

4. Practical recommendations

The three-document set GRZAN implements for clients in Sri Lanka consists of: a manufacturer’s letter of authorisation (LOA) — defining the scope of authorisation, covering the 5-year validity period of the registration, and agreeing on notice periods for termination and cooperation on transfer; a MAH service agreement — covering vigilance, document custody, renewal and cooperation with inspections; and a distribution agreement — covering territory, volumes, pricing and termination terms. The three documents must cross-reference each other with no conflicting clauses before the structure is sound. Conflicts typically hide in overlapping definitions — two documents claiming the same obligation, or a termination clause in one that contradicts the transfer clause in another. A final cross-document review, clause by clause, is therefore part of the implementation itself, not an optional polish, and should be repeated whenever any one of the three is amended.

5. Verification checklist

• □ The MAH is a legally registered local Sri Lankan entity
• □ The LOA’s term covers the 5-year validity period of the registration
• □ Custody of the original certificate and cooperation on transfer have been agreed
• □ Responsibility for vigilance, renewal and cooperation with inspections has been divided
• □ The party responsible for GDP compliance has been designated
• □ The distribution agreement and the MAH service agreement contain no conflicting clauses

Regulatory information verified as of 28 October 2026.

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support across South Asia, including Sri Lanka. Our team prepares dossiers to NMRA expectations, manages submissions and deficiency responses, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com