NRB Permits Nepali IT Firms To Invest Up To $1M Overseas For Global Expansion
19th June 2025, Kathmandu
Nepal Rastra Bank (NRB) has opened the door for Nepal’s IT companies to invest abroad. The central bank recently amended its regulations. Now, IT firms can invest up to USD 1 million overseas. This move aims to support the growth and international expansion of Nepal’s IT sector.
NRB IT Firms Invest $1M Overseas
Foreign Investment Limit And Eligibility
The new regulation caps foreign investment at USD 1 million or 50% of the average foreign currency earnings from IT service exports over the last three years—whichever is lower. This limit provides a clear guideline for IT companies willing to invest abroad.
However, the IT companies must have earned foreign exchange from IT service exports for at least the previous three fiscal years. This condition ensures that only established exporters can benefit from this facility.
Legal Amendments And Government Support
This step follows recent government actions. In Magh 2079 BS (January/February 2023), the government revised key laws through an ordinance. These include the Foreign Investment and Technology Transfer Act 2075, the Company Act 2063, and the Foreign Exchange Act 2019.
The amendments allow Nepali companies to open branch offices overseas. They can also invest directly in shares of foreign companies. Nepal Rastra Bank’s updated regulation implements these changes by detailing the procedures and limits for foreign investments by IT firms.
Application And Approval Process
IT companies seeking to invest abroad must apply to Nepal Rastra Bank for foreign exchange. The bank will decide within 15 working days of receiving the application. This process aims to be quick and efficient.
Additionally, the companies must submit audited financial statements of their foreign investments. These statements should cover both the foreign country’s and Nepal’s fiscal years. Companies have up to six months after the fiscal year ends to submit these documents.
If auditing is not required by the host country, companies may submit uncertified financial reports with valid proof. This flexibility helps firms comply with various international standards.
Repatriation Of Funds And Compliance
Funds earned from foreign investments must return to Nepal through the formal banking system. The regulation strictly requires this to ensure transparency and legal compliance.
If Nepal Rastra Bank finds any foreign exchange misuse or law violations, it will take legal action. Companies must also provide detailed foreign investment data when requested by the central bank.
Expanded Definition Of Technology Transfer
The amendment clarifies the meaning of “technology transfer.” It includes agreements between Nepali and foreign industries or companies involving patents, trademarks, designs, technical knowledge, and trade secrets.
Moreover, services such as management consulting, IT, marketing, financial auditing, engineering, outsourcing, digital data processing, and reverse engineering are included. This broad definition supports various technical collaborations.
Opportunities For Non-Resident Nepalese (NRNs)
The regulation benefits Non-Resident Nepalis as well. NRNs can now apply to buy shares in joint investment companies in Nepal. They can do this before receiving formal foreign investment approval, provided they deposit the money in a foreign investor account.
If shares are not allocated, applicants can request a refund through banks with supporting documents. This arrangement simplifies the investment process for NRNs and encourages their participation in Nepal’s economy.
Opening Pathways For Specialized Investment Funds
Nepal Rastra Bank has also allowed foreign investment in private equity and venture capital funds. These specialized funds can now bring in foreign capital according to set limits.
Furthermore, investors can repatriate profits from these funds. This move aims to attract more foreign investment into high-growth sectors such as IT and startups.
Background: Government’s Budget Support
The government had earlier promoted foreign investment in the FY 2082/83 budget. The current amendments align with this goal. They encourage IT companies to invest abroad within their paid-up capital limits.
Key Points Summary
IT firms can invest up to USD 1 million or 50% of average foreign earnings from IT exports in the last three years.
Only IT companies with at least three years of export earnings qualify.
Nepal Rastra Bank will process foreign exchange applications within 15 working days.
Companies must submit audited or certified financial reports of foreign investments within six months after fiscal year-end.
Returned funds from overseas investments must pass through Nepal’s banking system.
Violations of foreign exchange laws will face penalties.
Technology transfer includes patents, technical knowledge, and services such as IT, management, and marketing.
NRNs can invest in joint venture companies and get refunds if shares are not allotted.
Foreign investment in private equity and venture capital funds is now permitted.
The government supports foreign investment through recent budgetary measures.
Conclusion
Nepal Rastra Bank’s latest regulation is a major step to help Nepal’s IT sector grow globally. It sets clear rules and support for overseas investment. IT companies can now expand operations abroad more easily.
At the same time, the regulation encourages Non-Resident Nepalis to invest in Nepal. The allowance for foreign investment in specialized funds will also boost capital flow into emerging industries.
This reform reflects Nepal’s commitment to modernize its investment policies and promote international business opportunities.
For more:- NRB IT Firms Invest $1M Overseas
