Is a US LLC legal for someone living in Sri Lanka?

Under US law: yes

Every US state lets non-residents form and own an LLC. You don’t need a visa, a US address or an SSN. Your company needs a registered agent in the state where it’s formed, and an EIN from the IRS to open bank accounts and file taxes.

Owning the LLC comes with yearly US duties:

• Form 5472 with a pro forma Form 1120, filed with the IRS every year by a single-member LLC owned by a non-resident, due 15 April. The penalty for not filing starts at $25,000.
• A registered agent, renewed every year.
• A state annual report in states that require one, such as Wyoming.

Since March 2025, FinCEN no longer requires companies formed in the US to file beneficial ownership (BOI) reports, so that older requirement doesn’t apply to your LLC.

Under Sri Lankan law: yes, with rules to follow

No Sri Lankan law stops a resident from owning a company abroad. Two sets of rules shape how you do it: the Central Bank’s foreign exchange rules and the IRD’s tax rules.

Paying for your company

Paying a service provider such as Entryly to form your LLC is a payment for a service. You can pay Entryly in rupees through Dialog Genie or a Sri Lankan bank transfer.

Sending money abroad to invest in your LLC

Most founders never do this: the LLC is funded by the money its customers pay. But if you send money from Sri Lanka to put capital into your foreign company, that’s an outward investment under the Foreign Exchange Act, No. 12 of 2017.

Outward investments by residents go through an Outward Investment Account (OIA) at a licensed bank, within limits the Central Bank sets. Banks publish lifetime limits for individuals on their OIA pages, and the limits have changed several times since 2021, so ask your bank for the current figure before you send anything.

Bringing money home

The Central Bank’s rules on repatriating and converting export proceeds, including the stricter Rules No. 2 of 2026, are aimed at export businesses. They don’t apply to freelancers, or to owners receiving income from their own foreign company. For you, the rule that matters is the tax one below: income brought in through a Sri Lankan bank qualifies for the 15% cap.

Tax: you declare it in Sri Lanka

If you live in Sri Lanka, your income is taxable here, wherever your company is formed. Since 1 April 2025, income from services you provide to clients abroad, paid in foreign currency and brought in through a Sri Lankan bank, is taxed at a maximum of 15% for individuals. Income kept offshore can be taxed at the normal rates, up to 36%. In August 2026 the IRD reminded freelancers that they must include this income in their self-assessment returns.

Read the Sri Lanka tax guide for the rates, a worked example and filing dates.

What makes it illegal

Owning a US LLC is legal. These things aren’t, and no company structure changes that:

• hiding income from the IRD, or keeping earnings offshore to avoid Sri Lankan tax;
• giving false information to the state, the IRS, banks or Stripe;
• sending money abroad outside the Central Bank’s rules;
• doing business with sanctioned countries or people.

A simple checklist

1. Form your LLC and get your EIN.
2. Open Mercury and, if you need it, Stripe.
3. Register with the IRD for a TIN if you don’t already have one.
4. Bring earnings into your Sri Lankan bank account regularly, through Wise or a bank wire.
5. Keep your Mercury, Stripe and Wise statements.
6. File Form 5472 every April in the US, and your Sri Lankan self-assessment return every year.
7. Before you send any money from Sri Lanka to your LLC, talk to your bank about an OIA.