Setting up an Indian company as an NRI in Sri Lanka
Under the Companies Act, 2013, an Indian private limited company needs at least one director who is a
resident of India for a specified minimum number of days in the preceding calendar year -- an NRI
founder based in Sri Lanka typically brings in an India-based co-director to satisfy this. FDI into most
sectors is permitted under the automatic route, without prior Reserve Bank of India approval, subject to
sector-specific caps and reporting.
A genuine parallel: Sri Lanka's own resident-director and resident-secretary rules
Sri Lanka's Companies Act No. 7 of 2007 requires at least one director of a Sri Lankan company to be
ordinarily resident in Sri Lanka -- a foreign national can be a director, but not the sole director
without a Sri Lanka-resident co-director. The company secretary must also be Sri Lanka-resident, a
natural person, and professionally qualified. There is no minimum share-capital requirement and no
nationality restriction on shareholders, but the registered office must be a physical Sri Lankan
address.
Non-resident investment into Sri Lanka and repatriating business profits
Non-resident investment into Sri Lankan companies runs through Foreign Exchange Regulation No. 02 of
2021, generally via an Inward Investment Account, with a threshold (commonly cited around USD 5 million
for retail-trade equity investment specifically) that varies by sector -- confirm current thresholds with
a Sri Lanka-licensed adviser before committing capital. On the Indian side, repatriating dividends or
business profits from an Indian company to Sri Lanka follows the standard FEMA reporting and
NRO/authorized-dealer-bank process described in this platform's Compliance section. On the Sri Lankan
side, the Central Bank of Sri Lanka's exchange control regime governs outward transfers, and remains
under gradual, IMF-programme-linked liberalization as of 2026 -- confirm current outward-remittance rules
before moving significant funds out of Sri Lanka.
