NRB Eases Equity Inflows, Repatriation And Outward Investment

Executive Summary

Nepal Rastra Bank (NRB) has issued the Fifth Amendment to the Foreign Loan and Investment Management Bylaws, 2078 (2021)for on 30 December 2025 (though NRB Board decision was done on December 11, 2025). The amendment reflects a regulatory shift from approval-centric controls to post-transaction supervision. It simplifies foreign equity inflows,decentralizesrepatriation approvals to commercial banks, and relaxes restrictions on outward investment by Nepali companies.

Foreign Equity Inflows

The amendment removes the requirement for prior NRB approval for foreign equity investments, including investments in existing companies and share transfers.

PreviousPosition:

Foreign investors wererequiredto obtain NRB approval for foreign exchange entry even after receiving sectoral approval from the Department of Industry or theformerlyInvestment Board of Nepal(which is no longer investment approving authority). Thisadditionallayer applied particularly to brownfield investments and share acquisitions.

Changed Position:

NRB approval is no longerrequiredfor foreign equity inflows once approval is obtained from the Department of Industry or the Investment Board of Nepal. Foreign capital may be remitted throughauthorisedbanking channels, with NRB involvement limited to post-inflow recording for foreign exchange purposes.

Repatriation of Dividends and Investment Proceeds

The amendmentdecentralisesthe approval process for repatriation of investment-related proceeds.

PreviousPosition:

Applications for repatriation of dividends, disinvestment proceeds, andinvestment returns were processed by the Foreign Exchange Department of NRB. Although a 15-day timeline existed in principle, processing was often delayed due tocentralisedreview.

Changed Position:

Authority to approve repatriation has been delegated to the Head Offices of A-Class Commercial Banks. Banksare required tocomplete the approval process within15 daysof receiving complete documentation. NRB approval isrequiredonly where repatriation issoughtto a country other than the originalsourcecountry of investment.

Outward Investment by Nepali Companies

The amendment relaxes restrictions on outward investment under theAct Restricting Investment Abroad.

PreviousPosition:

Outward investment waspermittedonly for export-oriented Nepali companies, primarily in the IT and services sectors, subject to profitability requirements and foreign currency earnings thresholds. Prior approval from NRB wasrequiredeven for limited overseas investments.Summary of the earlier law can be readhere.

Changed Position:

Any Nepali company may now invest up to USD 20,000 abroad without prior NRB approval, regardless of profitability, export orientation, or foreign currency earnings. Investments exceeding this threshold remain subject to regulatory approval and applicable conditions.

While the monetary capremainslimited, the removal of eligibility and approval barriers marks a structural change in Nepal's outward investment framework.

Conclusion

The Fifth Amendmentrepresentsone of the most significantliberalisationsof Nepal's foreign exchange regime in recent years. Byeliminatingduplicative approvals for foreign equity inflows,decentralisingrepatriation decisions, and opening a limited outward investment window for all Nepali companies, NRB has reduced regulatory friction whileretainingtargeted supervisory oversight.

The full text of the Fifth Amendment to the Foreign Loan and Investment Management Bylaws, 2078 (2021) can be accessedhere.

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