TLDR; Add the package as a dependency then modify your React setup to import files outside of the /src directory.

In my case, it doesn't look like yarn link is doing anything other than adding a resolutions entry in package.json, which according to the documentation is only used to specify the version to resolve. Perhaps my understanding of Yarn link is wrong (even though it held up in v1).

To fix the issue I had to add the reference to dependencies in package.json (even though I'd already run yarn link):

"dependencies": {
  "components": "portal:../components"

This caused the aforementioned You attempted to import components which falls outside of the project src/ directory error. To resolve this we either need to eject the React app and disable the ModuleScopePlugin in Webpack (therefore allowing the import of files outside the /src folder), or use craco with custom configuration. I've created yarn-eject and craco branches to demonstrate both.

It's not a particularly elegant solution, and I'm hoping someone can post a better alternative. I switched to Yarn 2 so that I could utilise the "Improved Peer Dependency Links" feature (so that I'm only relying on one version of react across my applications and shared components packages). I'd rather not have to eject my React app or use custom configuration if possible.

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