Can I set up a Cyprus company from India under the LRS and ODI rules?
Short answer
Within limits. An Indian resident can send up to USD 250,000 abroad in each financial year (April to March) under the Liberalised Remittance Scheme, and an individual may set up or control a foreign company only in an operating business, not in financial services.
The Reserve Bank's overseas investment directions were updated on 1 April 2026; your bank applies them when it sends the money.
A Cyprus company whose key decisions are really made in India can be Indian resident under the place-of-effective-management test, so where the board decides matters as much as where the company is registered.
Sources
- Reserve Bank of India: Liberalised Remittance Scheme rbi.org.in
- Reserve Bank of India: directions on overseas investment rbi.org.in
- Income Tax Department: residence in India (section 6) incometaxindia.gov.in
Information, not advice. This answer describes the published rules as they stand on 12 October 2026, checked against the sources listed. Tax and residence rules depend on your own circumstances and change; check your position with a tax adviser qualified in India and in Cyprus before you act on it.
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