Repatriation of Foreign Investment in Nepal | 2026 Guide
Repatriation of Foreign Investment in Nepal: Process, Approvals & Tax Rules (2026 Guide) | Legal Edge Nepal
FITTA 2019 · NRB Fifth Amendment Dec 2025 · Income Tax Act · Updated June 2026
Repatriation of Foreign Investment in Nepal: Process, Approvals, and Tax Rules
Since December 2025, routine dividend repatriation no longer goes through NRB. Your commercial bank approves it directly — within 15 working days. Here is what changed, and what it means for your investment.
Dec 2025
Nepal Rastra Bank's Fifth Amendment to the Foreign Investment and Foreign Loan Management Bylaw, 2078 moved routine repatriation approval from NRB's Foreign Exchange Department to A-Class commercial bank head offices. Same-country repatriation now approved by your bank within 15 working days. NRB approval required only if funds going to a different country than original investment source.
Jun 2026
This guide updated to reflect Fifth Amendment implementation, updated tax rates, and revised document checklist requirements.
🎯 Direct Answer — Repatriation of Foreign Investment in Nepal
Foreign investors in Nepal can repatriate dividends, capital gains from share sales, loan principal and interest, technology transfer royalties, and liquidation proceeds — after paying all applicable Nepali taxes. Since December 2025, A-Class commercial banks approve and process most repatriations directly within 15 working days. NRB approval is required only if the funds are going to a country other than where the original investment came from.
How to Use This Guide: This article reflects the NRB Fifth Amendment (December 2025) and FITTA 2019 as of June 2026. The Fifth Amendment is recent — confirm current documentation requirements and processing times directly with your commercial bank before applying. This article is not legal advice.
Key Figures at a Glance
June 2026
Metric
Value
Source
Bank processing time (complete docs)
15 working days
NRB Fifth Amendment, Dec 2025
Dividend withholding tax
5% — final, resident and non-resident
Income Tax Act 2058, §54
Royalty / technical service fee withholding
15%
Income Tax Act 2058
Interest withholding (foreign loans)
15%, or ~10% under most DTAAs
Income Tax Act 2058
Standard corporate income tax
25% (30% for banking, telecom, tobacco)
Income Tax Act 2058
Statutory approval deadline (approving body)
15 days from complete application
FITTA 2019, §20(7)
Ministry appeal deadline
30 working days
FITTA 2019, §20(12)
Royalty cap — technology transfer
5% of total selling price (excl. tax)
FITTA 2019, §20(2)(d)
15 daysBank processing time
5%Dividend withholding tax
15%Royalty withholding
25%Corporate income tax
30 daysMinistry appeal deadline
10+Nepal DTAA countries
⚡ Quick Summary
Since Dec 2025: A-Class bank approves same-country repatriation directly within 15 working days
NRB approval only needed if sending to a different country than original investment source
5% final withholding on dividends — same for resident and non-resident shareholders
No statutory cap on repatriation amount — constraint is your proportional ownership share
Tax clearance certificate from IRD required before any repatriation application proceeds
DTAA rate requires tax residency certificate filed with IRD before tax is calculated
Repatriation is the process of legally transferring investment-related money out of Nepal into foreign currency. Section 20 of FITTA 2019 names five categories a foreign investor can repatriate, after settling Nepali tax liabilities.
Category
Description
Legal Basis
Share sale proceeds
Proceeds from selling shares held with foreign investment
FITTA 2019, §20(1)(a)
Profit or dividend
Profit or dividend from the registered investment
FITTA 2019, §20(1)(b)
Liquidation balance
Remaining balance after liquidation or winding up of the company
FITTA 2019, §20(1)(c)
Technology transfer royalty
Royalty under a registered technology transfer agreement
FITTA 2019, §20(1)(d)
Damages / compensation
Amounts received from lawsuit, arbitration, or legal settlement in Nepal
FITTA 2019, §20(1)(e)
Foreign loan repayment
Principal and interest on foreign loans secured against Nepali assets
Separate NRB provisions
II. Legal Framework: Four Layers, One Process
Reference Level
Four layers of law and regulation govern repatriation, and they don't always move at the same pace — the December 2025 NRB amendment is a good example of regulation changing faster than the underlying Act.
Instrument
What It Covers
Foreign Investment and Technology Transfer Act, 2019 (FITTA, 2075 BS)
The statutory right to repatriate, the categories covered, and the 15-day approval deadline at the approving-body stage
Foreign Exchange (Regulation) Act, 2019
NRB's general authority over foreign currency transactions in and out of Nepal
NRB Foreign Investment and Foreign Loan Management Bylaw, 2078 (Fifth Amendment, December 2025)
Who approves repatriation, within what timeline, and when NRB must be involved
Income Tax Act, 2058 (2002)
Withholding tax rates on dividends, interest, royalties, and capital gains before repatriation
III. What Changed: The NRB Fifth Amendment (December 2025)
Read This First
⚠ If You've Read an Older Guide
If you've read a guide describing NRB as the approving authority for routine repatriation, that description predates the December 2025 amendment. The process has materially changed.
Before December 2025, a foreign investor needing to repatriate dividends or divestment proceeds went through two layers of approval: a recommendation from the Department of Industry (or the relevant sector regulator), then a separate foreign-exchange approval from NRB's Foreign Exchange Department.
Situation
Before Dec 2025
After Dec 2025 (Fifth Amendment)
Routine dividend repatriation — same country
DOI recommendation + NRB approval required
A-Class bank approves directly within 15 working days
Divestment proceeds — same country
DOI endorsement + NRB foreign exchange approval
Bank approves directly with complete documentation
Repatriation to DIFFERENT country
NRB approval required
NRB approval still required
Foreign equity inflows
NRB prior approval often required
Capital moves through normal banking; NRB records only
The One Distinction That Matters Most
A Singapore-based investor sending dividends back to a Singapore account goes through their bank alone. The same investor repatriating to a Netherlands account — after relocating treasury operations — needs NRB approval as well. This single distinction is the most consequential thing in this guide for anyone restructuring a holding company after they've already invested in Nepal.
IV. Who Can Repatriate, and What Conditions Apply
FITTA 2019
Any foreign investor with an investment properly approved and recorded under FITTA — whether through equity, reinvested earnings, lease financing, or a technology transfer agreement — has the statutory right to repatriate returns on that investment.
Three Conditions That Must Be Met
1. All Nepali tax liabilities on the relevant amount must be paid first.
2. The investment must have complied with the terms of its original approval and any related agreements.
3. The investor can only repatriate in proportion to their actual ownership share in the company. A 30% shareholder cannot repatriate more than 30% of a given distribution.
Repatriation can be made in the same foreign currency the original investment was brought in, or in another convertible foreign currency, generally with the bank's — or, in the cross-border case, NRB's — sign-off on the conversion.
V. The Repatriation Process — Step by Step
Follow This Sequence
1
Tax
Settle Tax Obligations and Obtain Tax Clearance Certificate
Pay the relevant withholding tax — 5% final withholding on dividends, 15% on royalties and most interest (subject to a lower treaty rate where a DTAA applies), standard corporate tax on capital gain from a share sale. Once deposited with the Inland Revenue Department, obtain the tax clearance certificate confirming all obligations are current.
IRD issues clearance once deposit is recorded — apply for clearance after the deposit clears, not simultaneously
2
DOI
Get Sign-Off from the Investment-Approving Body
For categories where the original investment needed approval from the Department of Industry, Investment Board, or a sector regulator — that same body must confirm the investor has met the terms of the original approval. Under FITTA §20(7), this body must decide within 15 days of receiving a complete application.
Statutory deadline: 15 days from complete application
3
Apply
Apply to Your A-Class Commercial Bank
With the tax clearance certificate and investment-approval documentation in hand, apply to the authorized commercial bank where the relevant account is held. Submit board resolution, audited financial statements, tax clearance certificate, withholding tax deposit receipt, and proof of original investment inflow.
All documents must be in order before submitting — incomplete applications restart the 15-day clock
4
Review
Bank Review and Approval — 15 Working Days
The bank's head office reviews documentation and verifies compliance checks — confirming dividend doesn't exceed accumulated distributable profit and that share transfers carry proper investment-authority endorsement. If everything is in order and funds are going to the same country the investment came from, the bank approves and processes directly.
Post-Fifth Amendment: bank is the final approving authority for same-country repatriation
Cross-Country Only
5
NRB
NRB Approval — Only if Destination Country Differs from Source
If the destination country differs from the original source country of investment, the bank forwards the application to NRB for a separate approval before the transfer can proceed. This step does not apply to most routine dividend repatriations — but check early if your corporate structure has shifted since the original investment was made.
Check this before assuming your repatriation is bank-only — restructured holding companies often miss this
6
Transfer
Funds Transfer and Reporting
Once approved, the bank converts and remits the funds to the investor's foreign account and reports the transaction to NRB under standard foreign exchange reporting requirements — regardless of which entity approved it.
Transaction reported to NRB even when bank is the sole approving authority
VI. Tax Treatment of Each Repatriation Category
Verify DTAA Rates
Category
Nepali Tax Before Repatriation
Notes
Dividends
5% final withholding tax
Same rate for resident and non-resident shareholders
Capital gains from share sale
Standard corporate tax rate on the gain
Rates differ for listed vs. unlisted shares; withholding tax credited at final settlement
Royalty under technology transfer
15% withholding tax
Reduced rate available under applicable DTAA with tax residency certificate
Interest on foreign loans
15% withholding tax
Often reduced to ~10% under DTAA — requires residency certificate filed with IRD before calculation
Liquidation proceeds
Tax on gain realized in liquidation
All outstanding company liabilities must be settled before balance is repatriable
Nepal has DTAAs with more than 10 countries including India and China. Apply the treaty rate by submitting a tax residency certificate to IRD before tax is calculated — not after.
Need Help with Foreign Investment Repatriation?
Legal Edge Nepal's foreign investment team handles tax clearance, DOI coordination, and bank documentation for repatriation from Nepal. We have managed FITTA compliance since 2018.
✓Withholding tax deposit receipt for the relevant payment (dividend, royalty, or interest)
✓Tax clearance certificate from the Inland Revenue Department (IRD)
✓Tax residency certificate from home country — if claiming reduced DTAA withholding rate
🏢 Corporate Documents
✓Board resolution authorizing the dividend distribution or relevant transaction
✓Audited financial statements for the relevant fiscal year (certified by registered chartered accountant)
✓Company registration certificate from the Office of the Company Registrar
✓PAN certificate
🌏 Investment Proof
✓Certificate of foreign investment registration from the Department of Industry or relevant sector regulator
✓Proof of original foreign investment inflow through banking channels, including foreign currency conversion records
✓For share sales: share transfer agreement and required approval from investment-approving body
🏦 Bank Application
✓Application to the authorized A-Class commercial bank where the relevant account is maintained
✓Bank statements showing the repatriable amount available in the company's account
VIII. Fees and Timeline at a Glance
June 2026
Step
Who Handles It
Typical Time
Withholding tax deposit and clearance
Inland Revenue Department (IRD)
Varies; clearance issued promptly once deposit recorded
Investment-approving body sign-off
DOI, sector regulator, or Single Stop Service Centre
Up to 15 days by statute
Commercial bank review and approval
A-Class commercial bank (head office)
Up to 15 working days from complete documentation
NRB approval (cross-country only)
Nepal Rastra Bank
Not separately fixed; allow additional time
Appeal if decision disputed
Ministry of Industry, Commerce and Supplies
30 working days
No government filing fee specific to the repatriation application. The cost is the tax paid on the underlying dividend, gain, or royalty, plus professional fees for documentation preparation.
IX. If Your Application Is Refused
Know Your Rights
Appeal Route Under FITTA §20(12)
If the investment-approving body refuses or delays a repatriation decision, the investor can appeal to the Ministry of Industry, Commerce and Supplies, which must decide within 30 working days. This appeal route exists specifically for disputes with the approving body's decision — it is not a substitute for fixing incomplete documentation, which is by far the more common cause of delay at the bank-review stage.
X. Common Misconceptions
Myth vs. Reality
Myth
NRB approves every repatriation from Nepal.
Reality
Not since December 2025. For repatriation to the same country the investment came from, your A-Class commercial bank approves it directly within 15 working days. NRB is only required when sending to a different country.
Myth
There's a cap on how much foreign investors can repatriate from Nepal.
Reality
No statutory cap exists on legitimate, tax-settled returns. The real constraint is proportional ownership — you can only repatriate in proportion to your actual ownership share in the company.
Myth
Dividends are tax-free for foreign shareholders in Nepal.
Reality
Dividends are taxed at a flat 5% final withholding rate — the same for resident and non-resident shareholders. Low by regional standards, but not zero.
Myth
You need separate approvals from both DOI and NRB for every repatriation.
Reality
That dual-track requirement was the pre-amendment norm. Routine same-country repatriation now goes through the bank alone, after DOI sign-off at the investment stage.
Myth
Repatriation must happen in the original investment currency.
Reality
It can be made in the original currency or another convertible foreign currency, with the relevant approving body's or bank's consent to the conversion.
Myth
DTAA rates apply automatically — no extra steps needed.
Reality
The reduced treaty withholding rate is not applied automatically. It requires a tax residency certificate from the home country to be filed with the IRD before the relevant tax is calculated — not after the fact.
XI. Process Traps That Cause Delays or Refusals
Avoid These
!
Tax Clearance Requested Before Withholding Tax Deposit Clears
IRD won't issue clearance until the deposit is recorded. Sequence this correctly — apply for clearance after the deposit clears, not simultaneously. This is the most common sequencing mistake.
!
Dividend Distribution Exceeding Accumulated Distributable Profit
Banks scrutinize this specifically under the Fifth Amendment's compliance checks. A mismatch between the declared dividend and distributable profit in audited accounts is an instant hold on the application.
!
Share Transfer Without Investment-Approving Body Endorsement
A share transfer recorded at the Company Registrar's Office without the matching DOI or sector-regulator approval creates a documentation gap the bank will catch and hold the application for.
!
Assuming the Destination Country Doesn't Matter
If treasury operations have shifted since the original investment, repatriating to a new jurisdiction without flagging the NRB approval requirement is one of the most common post-amendment mistakes. Check before submitting to the bank.
!
Missing or Expired Investment Registration Records
Companies that haven't kept their foreign investment registration and capital records current with the Department of Industry create avoidable friction at the bank-review stage. Update before applying.
!
DTAA Rate Claimed Without a Current Tax Residency Certificate
The reduced treaty withholding rate isn't applied automatically. The residency certificate must be on file with the IRD before the relevant tax is calculated — submitting it after the tax is deposited at the standard rate creates a refund dispute rather than a simple adjustment.
XII. Definitions
FITTA
Foreign Investment & Technology Transfer Act, 2019
Primary statute governing foreign investment and repatriation rights in Nepal. Section 20 defines repatriable categories.
NRB
Nepal Rastra Bank
Central bank and authority over foreign exchange transactions. Since Dec 2025, approves only cross-country repatriations directly.
A-Class Commercial Bank
NRB-licensed bank
Category of Nepali bank licensed by NRB to hold foreign currency accounts. Since the Fifth Amendment, approves most repatriation applications directly within 15 working days.
DOI
Department of Industry
Principal investment-approving body for most foreign direct investment under FITTA. Must sign off on repatriation within 15 days of complete application.
DTAA
Double Taxation Avoidance Agreement
Treaty between Nepal and another country that can reduce withholding tax rates on dividends, interest, and royalties. Nepal has DTAAs with 10+ countries including India and China.
Withholding Tax (Final)
Final tax deducted at source
Tax deducted at the point of payment that settles the recipient's full Nepali tax liability on that income, with no further filing required for that amount.
Tax Clearance Certificate
IRD document
Document issued by the Inland Revenue Department confirming all applicable taxes have been paid. Required before most repatriation applications proceed to the bank stage.
Single Stop Service Centre
Government facilitation body
Government body that can be granted, by Gazette notification, authority to approve repatriation applications in place of a sector-specific approving body.
Fifth Amendment
NRB Bylaw Amendment, Dec 2025
Amendment to NRB Foreign Investment and Foreign Loan Management Bylaw, 2078, delegating same-country repatriation approval to A-Class commercial bank head offices.
IRD
Inland Revenue Department
Nepal's tax authority. Issues tax clearance certificates and receives withholding tax deposits before repatriation can proceed.
Frequently Asked Questions
Click to Expand
Yes. FITTA 2019 explicitly guarantees the right to repatriate dividends, capital gains, loan repayments, royalties, and liquidation proceeds — once all applicable Nepali taxes are paid.
Section 20 of FITTA 2019 names five categories a foreign investor can repatriate: share sale proceeds, profit or dividend, liquidation balance, technology transfer royalties, and damages or compensation from legal proceedings in Nepal. Foreign loan repayments are covered under separate NRB provisions. All categories require applicable Nepali taxes to be settled first and a tax clearance certificate from the IRD before the repatriation application can proceed.
Only if sending money to a different country than where the original investment came from. Since December 2025, same-country repatriation is approved directly by your A-Class commercial bank within 15 working days.
The NRB Fifth Amendment (December 2025) delegated approval authority for same-country repatriation to A-Class commercial bank head offices. If a Singapore-based investor sends dividends back to Singapore, the bank handles it entirely. If that same investor wants to send the money to a Netherlands account instead — after restructuring treasury operations — NRB approval is required before the bank can process the transfer. This is the most important practical change from the amendment for investors with restructured holding companies.
A flat 5% final withholding tax — the same rate for both resident and non-resident shareholders. Once withheld and deposited, no further Nepali tax is owed on that dividend.
Nepal's 5% dividend withholding under Income Tax Act 2058, §54 is a final tax — it settles the recipient's full Nepali tax liability on that dividend payment with no further filing required. This rate applies equally to resident and non-resident shareholders. It is low by regional standards (India applies 20% on non-resident dividends in many cases) but is not zero as some guides suggest. The 5% must be withheld and deposited with the IRD before the tax clearance certificate can be obtained, which is required before the bank will process the repatriation.
Up to 15 working days from the commercial bank once documentation is complete. Including tax clearance and DOI sign-off, most straightforward cases complete within 2–4 weeks overall.
The 15-working-day clock starts when the bank receives a complete documentation package. Before reaching the bank, you need: (1) the withholding tax deposited and the IRD clearance certificate issued — timing varies but clearance is usually prompt once the deposit records; (2) DOI or sector regulator sign-off — up to 15 days by statute. A straightforward dividend repatriation to the same country typically completes in 2–4 weeks total if documentation is in order from the start. Incomplete documentation at any stage restarts the relevant clock.
No fixed cap. The real constraint is proportional: you can only repatriate in proportion to your actual ownership share. A 30% shareholder cannot repatriate more than 30% of a given distribution.
FITTA 2019 does not impose a monetary ceiling on legitimate repatriation. The constraints are proportional (ownership share), sequential (all taxes paid first), and documentary (complete documentation required). The bank also verifies that dividend amounts don't exceed accumulated distributable profit — a practical limit arising from company law rather than a repatriation cap. There is no concept of an arbitrary government-set ceiling on how much an investor can take out, as long as it represents a genuine, tax-settled return on a properly registered investment.
Appeal the approving body's decision to the Ministry of Industry, Commerce and Supplies within the statutory window. The Ministry must decide within 30 working days.
The formal appeal route under FITTA §20(12) exists specifically for disputes with the investment-approving body's decision on a repatriation application. In practice, most delays at the bank stage are caused by documentation gaps — missing tax clearance certificate, dividend exceeding distributable profit, or an unendorsed share transfer — rather than formal refusals. These documentation issues are typically resolved by resubmitting corrected materials rather than by formal appeal. The appeal mechanism is more relevant when the approving body delays beyond the 15-day statutory window or formally refuses without grounds.
The amendment's main relaxations target foreign equity inflows and repatriation of dividends, divestment proceeds, and investment returns. Foreign loan repayments involve separate NRB provisions — check these separately.
The Fifth Amendment to the NRB Foreign Investment and Foreign Loan Management Bylaw, 2078, focused primarily on two things: removing the prior NRB approval requirement for foreign equity inflows (once DOI has approved), and delegating same-country repatriation approval to A-Class bank head offices. Foreign loan inflows into Nepal have always involved a distinct NRB approval process, and that process has not been materially changed by this amendment. If your repatriation involves principal and interest repayment on a foreign loan secured against Nepali assets, check the current loan-specific provisions in the NRB bylaws directly rather than applying the equity repatriation process described in this guide.
Yes. Repatriation can be in the original currency or another convertible foreign currency, with the bank's (or NRB's, for cross-country transfers) consent to the conversion.
FITTA 2019 and NRB regulations permit repatriation in the original investment currency or in another convertible foreign currency. The bank processing the repatriation handles the currency conversion as part of the transfer, subject to standard foreign exchange conversion procedures. For cross-country repatriations requiring NRB approval, NRB also confirms the conversion terms. This flexibility is useful for investors who have restructured their currency exposure or whose home country uses a less liquid currency than the one they originally invested in.
It can — for interest and royalties especially. You must submit a tax residency certificate from your home country to the IRD before the tax is calculated. Nepal has DTAAs with 10+ countries including India and China.
Nepal's double taxation avoidance agreements (DTAAs) can reduce withholding tax rates on interest (often from 15% to around 10%) and royalties. To claim the treaty rate, you need to submit a current tax residency certificate from your home country's tax authority to the Inland Revenue Department before the relevant withholding tax is calculated and deposited. Submitting it after the deposit has already been made at the standard rate creates a refund dispute rather than a simple adjustment — sequence this correctly. The 5% dividend withholding rate is already low enough that most DTAAs don't change it materially; confirm with the IRD whether your specific treaty modifies the dividend rate.
Dividends are profit distributed while you still hold shares. Divestment proceeds are what you receive when you sell shares. Both are repatriable under FITTA, but divestment requires the share transfer to be properly recorded and endorsed by the investment-approving body first.
Dividends are distributions of company profit to shareholders during the normal course of investment — you remain a shareholder after receiving the dividend. Divestment proceeds are the consideration received when you sell some or all of your shares to a buyer. Both categories are listed as repatriable under FITTA 2019 §20. The key practical difference is that divestment requires the share transfer to be properly recorded with the Office of the Company Registrar and, where applicable, endorsed by the investment-approving body (DOI or sector regulator) before the bank will process the repatriation. A share transfer registered at the Company Registrar without the matching investment-authority endorsement is a documentation gap that will hold the repatriation application.
📚 Related Legal Guides
Essential reading for foreign investors operating in Nepal
Methodology Note
Legal Edge Nepal cross-checked the approval process, tax rates, and timelines in this guide against the NRB Fifth Amendment text, FITTA 2019, and Income Tax Act provisions as of June 2026. Because the Fifth Amendment is a recent regulatory change, confirm current implementation details directly with your commercial bank's head office and, where relevant, NRB before relying on the process described here. Bank-level implementation practices may still be settling.
Need Help Repatriating from Nepal?
Legal Edge Nepal handles tax clearance coordination, DOI sign-off, bank documentation preparation, and NRB compliance for foreign investment repatriation from Nepal.
