Foreign Direct Investment (FDI) & Market Entry

Profit Repatriation Nepal | NRB Compliance

Profit repatriation in Nepal allows foreign investors to remit dividends, capital gains, and investment proceeds under the Foreign Investment and Technology Transfer Act 2019. As of December 2025, commercial banks approve repatriation within 15 working days without prior NRB approval. Tax clearance and proper documentation remain essential. Sunshine Law Firm provides end to end repatriation compliance and commercial bank liaison.

What is Profit Repatriation and NRB Compliance in Nepal?

Profit repatriation in Nepal is the legal process by which foreign investors remit earnings from their Nepali investments to their home countries or other jurisdictions. Under the Foreign Investment and Technology Transfer Act 2019 (FITTA 2019), foreign investors are entitled to repatriate 100% of profits, dividends, capital gains, royalties, and investment proceeds after satisfying tax obligations and regulatory requirements.

The Nepal Rastra Bank (NRB) historically required direct approval for all repatriation transactions. However, the December 30, 2025 fifth amendment to the Foreign Investment and Foreign Loan Management Bylaw 2021 fundamentally changed this process. Commercial banks now have authority to approve repatriation, while NRB functions as regulatory and supervisory authority only.

Permitted repatriation categories include: income from share sales, profits and dividends, liquidation proceeds, royalties and technology transfer fees, lease rental payments, compensation from legal settlements, and specialized investment fund earnings.

Foreign investors must comply with one year lock in period from investment injection date and obtain tax clearance before repatriation.

Without proper NRB compliance and commercial bank approval, foreign investors cannot legally access foreign exchange for repatriation, resulting in trapped earnings and potential regulatory violations.

Our Profit Repatriation and NRB Compliance Services

Sunshine Law Firm handles profit repatriation end to end in Nepal, from NRB compliance verification through commercial bank approval and foreign exchange execution.

NRB Compliance Audit : Verification of investment recording, lock in period completion, and regulatory standing with Nepal Rastra Bank

Tax Clearance Coordination : Liaison with Inland Revenue Department to obtain tax clearance certificates and resolve outstanding liabilities

Commercial Bank Application Preparation : Complete documentation package for A Class commercial bank approval including board resolutions, auditor certifications, and compliance declarations

Repatriation Structure Advisory : Optimization of repatriation timing, currency selection, and destination country routing to minimize costs and delays

Third Country Repatriation : NRB Schedule 9B applications for repatriation to jurisdictions other than original investment source country

Expatriate Salary Repatriation : NRB Circular 2081 compliance for 100% net remuneration repatriation (previously restricted to 70%)

Royalty and Technology Transfer Repatriation : Auditor certified royalty calculations and technology transfer agreement compliance for remittance approval

Liquidation and Exit Repatriation : Complete process for remitting proceeds from company winding up, asset sales, and investment termination

Ongoing Compliance Management : Annual reporting, dividend declaration compliance, and future repatriation pathway maintenance

How Profit Repatriation Works Step by Step

The profit repatriation process in Nepal generally involves 8 key steps, now handled through A Class commercial banks rather than direct NRB approval following the December 2025 amendment.

Step 1: NRB Compliance Verification (2 to 3 days) Confirm foreign investment is properly recorded with Nepal Rastra Bank. Verify lock in period completion (one year from investment injection). Check for any regulatory holds or compliance deficiencies .

Step 2: Tax Clearance Obtention (5 to 10 days) Secure tax clearance certificate from Inland Revenue Department or evidence of tax return filing. Ensure no outstanding tax liabilities. Obtain audited financial statements for relevant fiscal year.

Step 3: Board Authorization (1 to 2 days) Obtain board resolution or general meeting resolution authorizing specific repatriation amount and destination. Resolution must specify dividend declaration if applicable.

Step 4: Document Preparation (3 to 5 days) Prepare commercial bank application package: recommendation from DOI/IBN (if required), board resolution, NRB investment recording proof, tax clearance, Credit Information Center non blacklist certificate, auditor certified dividend/royalty statements, and self declarations .

Step 5: Commercial Bank Submission (1 day) Submit complete application to A Class commercial bank where foreign invested company maintains account. Bank serves as approving authority under December 2025 amendment .

Step 6: Bank Review and Approval (15 working days) Commercial bank reviews application for compliance with FITTA 2019 and Foreign Investment and Foreign Loan Management Bylaw. Bank must decide and notify applicant within 15 working days of complete application receipt.

Step 7: Foreign Exchange Execution (1 to 3 days) Upon approval, commercial bank executes foreign exchange transfer to investor’s designated account. Funds normally remitted to same investor, same country as original investment, and to investor’s own name account.

Step 8: Post Repatriation Compliance (Ongoing) Maintain records of repatriation for future audits. Update NRB records if required. Plan for subsequent repatriation cycles if applicable.

Total processing time generally ranges from 3 to 6 weeks depending on tax clearance speed, document completeness, and commercial bank workload.

Documents Required

The following documents are typically required for profit repatriation from Nepal, categorized by repatriation type:

For All Repatriation Applications:

Commercial bank foreign exchange approval application
Recommendation from DOI or IBN (where approval is required to be issued as recommendation under prevailing law)
Certified copy of board resolution or general meeting resolution authorizing repatriation
Copy of evidence certifying foreign investment recorded with Nepal Rastra Bank
Copy of most recent tax payment or tax return submission
Tax clearance certificate for fiscal year relating to profits/dividends if different from current year
Credit Information Center certificate confirming company not blacklisted (valid within 6 months of application)

Self Declaration by Applicant Covering:

No overdue loans from any Nepali bank or financial institution
No misuse of foreign currency
No outstanding tax liabilities of any kind
Compliance with anti money laundering and counter terrorism financing laws
Compliance with all applicable prevailing laws

For Dividend Repatriation:

Audited financial statements showing profit availability
Annual general meeting minutes declaring dividend
Bank statements showing dividend distribution

For Royalty/Technology Transfer Repatriation:

Copy of DOI approved technology transfer agreement
Auditor certified statement confirming royalty amount payable
Invoices/bills issued by foreign technology provider

For Expatriate Salary Repatriation (NRB Circular 2081):

Employment contract or appointment letter
Evidence of tax deduction at source
Salary payment records

For Third Country Repatriation (Schedule 9B):

Application with detailed reasons and justification
Evidence of previous repatriations to requested country
FATF compliance confirmation for destination country

Note: All documents must be certified copies or originals as specified. Non English documents require certified Nepali translation.

Timeline and Government Fees

The profit repatriation process in Nepal typically takes 3 to 6 weeks from application preparation through foreign exchange execution, subject to tax clearance timelines and commercial bank processing.

Official Timeline:

Commercial bank approval: 15 working days from complete application
NRB third country approval (if applicable): Additional 15 to 30 days

Practical Timeline:

NRB compliance verification: 2 to 3 days
Tax clearance obtention: 5 to 10 days
Document preparation: 3 to 5 days
Commercial bank review: 15 working days
Foreign exchange execution: 1 to 3 days

Government Fees:

Commercial bank foreign exchange approval: Generally no specific fee
Credit Information Center certificate: Nominal fee (approximately NPR 500 to 1,000)
Tax clearance from IRD: No fee if no outstanding liability
NRB third country approval (Schedule 9B): No specific fee

Foreign Exchange Considerations:

Repatriation normally in same currency as original investment or other convertible currency
Exchange rate determined by commercial bank based on NRB reference rate
Repatriation to India may be in Indian Rupees

Professional Fees: Our fees vary based on repatriation complexity, tax clearance requirements, and whether third country routing is involved. Contact us for transparent quote including all documentation, bank liaison, and compliance management.

Why Use Sunshine Law Firm for Profit Repatriation and NRB Compliance

Our lawyers have handled numerous profit repatriation matters for foreign investors across manufacturing, services, technology, and trading sectors, successfully navigating both pre and post December 2025 amendment procedures.

Sunshine Law Firm maintains professional relationships with Nepal Rastra Bank Foreign Exchange Management Department and A Class commercial bank compliance officers. Our team has specific expertise in FITTA 2019 repatriation provisions, December 2025 amendment implementation, and NRB Circular 2081 expatriate salary repatriation.

Common mistakes clients avoid by using our advisory: applying to NRB directly (no longer required for standard repatriation), submitting incomplete document packages causing 15 day timeline restart, failing to obtain Credit Information Center clearance, and attempting third country repatriation without Schedule 9B approval. We ensure compliance verification before application, complete documentation for commercial bank approval, and proper routing for destination countries.

We prioritize transparent process tracking, direct commercial bank liaison, and proactive compliance management to prevent repatriation delays and regulatory complications.