8th August 2023, Kathmandu
Nepal Rastra Bank Foreign Exchange Management Department is introducing a game-changing policy that will provide foreign exchange facilities to industries and businesses engaged in exporting information technology and other services.
This dynamic move aims to bolster the growth of these sectors by enabling them to establish contact offices abroad, conduct overseas financial transactions, and acquire essential software and equipment using foreign currency.
Foreign Exchange Expansion for Service Exporters
In a strategic amendment to the integrated instructions related to foreign regulations, Nepal Rastra Bank is extending foreign exchange facilities to industries and businesses actively exporting information technology and various services.
This initiative reflects the bank’s commitment to fostering a conducive environment for economic growth and innovation in the digital domain.
Key Facilitation Measures
The policy overhaul introduces multiple facilities for IT and service exporters, including:
Establishing Contact Offices Abroad
Industries can now set up contact offices abroad, enhancing their global presence and facilitating smoother cross-border operations.
Overseas Money Transfers (Nepal Rastra Bank Foreign Exchange)
Exporters can easily transfer funds to their foreign bank accounts, streamlining international financial transactions.
Software and Equipment Procurement
The foreign exchange facility extends to purchasing essential software, programs, and equipment in foreign currency, enhancing technological capabilities.
Connectivity Enhancement (Nepal Rastra Bank Foreign Exchange)
The policy enables seamless connectivity of software, programs, and equipment across international borders, fostering collaborative growth.
Financial Incentive
According to the guidelines set by Nepal Rastra Bank, industries and businesses engaged in exporting information technology and services are eligible for foreign exchange facilities through commercial banks. They can avail up to 10 percent of the foreign currency earned during the previous financial year.
To access this incentive, companies must present audited financial statements showcasing their foreign currency earnings from service exports, along with bank account details for the converted foreign currency.
Export to India and Further Steps
For exporters earning foreign currency through trade with India, additional requirements come into play. They must submit details of their Nepali rupee account and provide proof of foreign exchange issued by the relevant bank.
Furthermore, the approval of the relevant body within the Nepal Government is imperative to access the requested amount of foreign currency facility, as outlined by Nepal Rastra Bank.
Nepal Rastra Bank’s innovative policy shift holds the potential to revolutionize the information technology and service export sectors. By offering foreign exchange facilities, the central bank is actively supporting the growth of these industries, encouraging expansion into international markets, and fortifying Nepal’s position in the global digital economy.
This strategic move not only empowers exporters but also aligns with Nepal’s vision of becoming a technological hub in the region.
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