Nepal Eases Rules on Expatriate Remuneration Repatriation for Foreign Investment

The Nepal Rastra Bank Circular on Expatriate Remuneration Repatriation marks a significant policy shift for foreign nationals working in Nepal. Historically, expatriates were restricted to repatriating only 70% of their net remuneration after applicable taxes, while the remaining 30% had to remain in Nepal.

This long-standing rule, while aimed at controlling foreign exchange outflow, often created financial and compliance challenges for expatriates and their employers. With the issuance of the Unified Circular 2081 (Circular No. 7/2081), the Nepal Rastra Bank (NRB) has now eliminated this ceiling, allowing expatriates to remit 100% of their net income after tax.

This progressive reform positions Nepal as a more attractive destination for international talent and investment.

Key Provisions of the Nepal Rastra Bank Circular

The provision broadly reads as, 

“The remuneration specified in the contract entered into with the employer or in the appointment letter issued by the employer, after deduction of applicable taxes in accordance with prevailing laws, may be repatriated as follows: in foreign currency, in the case of foreign nationals employed in Nepali companies or industries having foreign investment pursuant to the Foreign Investment and Technology Transfer Act, 2018 (2075); in foreign currency, in the case of non-resident foreign nationals employed in Nepali firms, companies or institutions; and in Indian Rupees, in the case of foreign nationals employed in Nepali firms, companies or institutions. Such repatriation shall be permissible to the respective country on the basis of the prescribed supporting documents.”

The Unified Circular clarifies that expatriates may repatriate their income as follows:

• In foreign currency – for foreign nationals employed in Nepali companies or industries with foreign investment under the Foreign Investment and Technology Transfer Act, 2018 (2075).
• In foreign currency – for non-resident foreign nationals employed in Nepali firms, companies, or institutions.
• In Indian Rupees – for Indian nationals working in Nepal.

The repatriation is permitted based on valid employment contracts, appointment letters, and evidence of tax compliance under prevailing Nepali law.

Key Implications of the Reform

1. For Repatriation Expatriate Professionals

The Nepal Rastra Bank Circular on Expatriate Remuneration Repatriation assures expatriates that their full net salary can be transferred abroad. This eliminates stranded funds, enhances financial security, and simplifies financial planning for foreign professionals, particularly those on short-term assignments.

2. For Employers

Multinational corporations and Nepali companies engaging expatriates can now design transparent compensation packages. This change reduces negotiation hurdles, strengthens Nepal’s ability to attract global expertise, and improves its competitiveness compared to other regional markets.

3. For Investors

By removing the 70% restriction, Nepal aligns itself with international investment norms. This reform reduces a major regulatory bottleneck and reassures investors that Nepal is committed to a business-friendly environment.

4. For Licensed Financial Institutions

Banks and financial institutions authorized for foreign exchange must verify contracts, appointment letters, and tax compliance. Their role is crucial in ensuring smooth and compliant repatriation processes.

5. For Nepal’s Investment Climate

The reform complements the objectives of the Foreign Investment and Technology Transfer Act, 2018 (2075), which aims to encourage FDI, promote technology transfer, and attract skilled human resources.

Why This Nepal Rastra Bank Circular Matters

The removal of the 70% cap on expatriate remuneration repatriation signals that Nepal is serious about building a competitive investment climate. The reform reduces uncertainty for expatriates, encourages multinational firms to consider Nepal as a viable posting location, and harmonizes the country’s regulations with international standards.

It also sends a positive signal to development partners, investors, and multinational corporations looking to deploy foreign professionals in Nepal.

 https://www.nrb.org.np/contents/uploads/2025/08/2_2082.04.22_FEMD-Circular.pdf