Nepal is becoming an increasingly attractive investment destination, with foreign companies entering sectors like hydropower, ICT, manufacturing, and tourism. While the process of foreign company registration in Nepal has become more streamlined under FITTA 2019, one area that continues to raise questions among investors is the repatriation of profits.
Can you send your profits back to your home country? Yes—but only if you follow the legal, tax, and compliance protocols correctly.
This guide explains how foreign businesses can remit dividends, service fees, and capital gains from Nepal—legally and efficiently—while maintaining full compliance with the Nepal Rastra Bank (NRB), Inland Revenue Department (IRD), and the Department of Industry (DoI).
Nepal's legal framework offers full repatriation rights to foreign investors under:
The Foreign Investment and Technology Transfer Act (FITTA) 2019
NRB Foreign Exchange Regulation Guidelines
Income Tax Act 2058
Foreign investors can remit the following:
Net profits and dividends
Sale proceeds of shares or business
Interest and principal on foreign loans
Royalties and technical service fees
Management fees (approved under technology transfer agreements)
However, repatriation is allowed only after tax clearance and approval from Nepal Rastra Bank.
Before repatriating profits, the foreign investment must be:
Registered with the Department of Industry (DoI)
Approved by NRB with documented capital inflow
Incorporated under Nepalese law, typically as a private limited or public limited company
Make sure your initial FDI inflow is officially recorded via SWIFT through NRB and supported with bank advice.
Financial statements must comply with Nepal Financial Reporting Standards (NFRS) and must be:
Audited by an ICAN-certified Chartered Accountant
Approved by the Board of Directors and General Assembly
Translated into Nepali (if requested by authorities)
To qualify for repatriation, you must:
File your annual corporate income tax return
Clear all Tax Deducted at Source (TDS) obligations
Obtain a tax clearance certificate for the relevant fiscal year
Ensure all payroll, VAT, and service taxes are up-to-date before requesting approval.
If you are remitting profits as dividends:
Pass a Board Resolution approving dividend distribution
Declare net profits as per audited financials
Ensure dividends are declared only from post-tax profits
The following documents are generally required:
Foreign Investment Approval Letter from DoI
Capital Inflow Documentation (SWIFT advice, bank statements)
Audited Financial Statements
Tax Clearance Certificate
NRB Form for Foreign Exchange Approval
Board Resolution for Dividend Payment
Shareholder Register
Additional documents may be requested depending on the nature of repatriation (e.g., loan repayment, royalty).
The NRB is the central authority that approves any foreign currency outflows. Once you have:
Obtained tax clearance
Submitted audited financials
Met documentation criteria
The NRB typically provides foreign exchange approval within 15 working days.
Repatriation is usually allowed in the currency of investment or another convertible foreign currency (e.g., USD, EUR).
Nepal imposes the following taxes before profits can be remitted:
Corporate Income Tax: Standard 25% on net profit
Dividend Tax: Final withholding tax at 5%
TDS on Royalties/Fees: 15% unless reduced under tax treaties
Nepal has Double Taxation Avoidance Agreements (DTAAs) with over 10 countries, which may reduce withholding rates.
Repatriation allowed after payment of capital gains tax (usually 10–15%)
Must be declared under an approved Technology Transfer Agreement
TDS must be deposited before remittance
Must be pre-approved by NRB
Repayment schedule should be included in the loan registration with NRB
Failing to record initial capital inflow properly
Distributing dividends without proper board approval
Skipping tax clearance or TDS filings
Using informal channels for profit remittance
Not updating NRB on shareholding or loan structure changes
Any of these can delay or block repatriation approval.
Engage a local ICAN-certified CA firm familiar with FDI compliance
Maintain clean, audit-ready financials
File returns on time (TDS, VAT, SSF, CIT)
Ensure your foreign currency bank account is NRB-approved
Apply for repatriation at least 1–2 months before target payout date
For foreign investors, being able to legally and efficiently repatriate profits is crucial. Nepal’s legal framework under FITTA 2019, along with NRB and IRD coordination, does allow profit remittance—but only with strict compliance.
By understanding the full process—from tax clearance to NRB approval—foreign businesses can repatriate earnings with confidence, while protecting their credibility and future investment capacity in Nepal.
If you're pursuing foreign company registration in Nepal, understanding repatriation rules should be a core part of your investment strategy.