Kathmandu, June 20: Nepal Rastra Bank (NRB) has adopted a more flexible approach to cross-border investments, easing rules for both Nepalis investing abroad and foreigners bringing investments into Nepal. The central bank introduced these changes via the fourth amendment to the ‘Foreign Investment and Foreign Debt Management Regulations, 2021’.

Key revisions include allowing Non-Resident Nepalis (NRNs) to invest in Nepal’s secondary market, enabling foreign investors to bring capital in convertible currencies, and permitting Nepali IT companies to invest in foreign firms. Under the updated rules, NRNs applying for shares in joint venture investment companies will no longer face regulatory obstacles, even if funds are deposited before government approval is secured.

Additionally, NRNs can now open bank accounts in Nepali currency for investment purposes—previously limited to foreign currencies. This has enabled NRNs to issue primary shares worth up to Rs 8.5 billion for their companies. For instance, the Nepal Development Fund—established with Rs 10 billion paid-up capital including a five percent stake from the government—can now offer up to 85 percent of its capital in shares to NRNs.

Foreign investors are also allowed to deposit earnings and repatriation amounts in Nepali rupees within local financial institutions. Meanwhile, Nepali IT companies can invest abroad up to US $1 million. According to NRB, this ceiling is capped at the lower of either US $1 million or 50 percent of the average foreign exchange earnings from IT exports over the past three fiscal years.

The NRB also clarified that individuals or companies planning foreign investments will have access to foreign currency facilities in 22 convertible currencies, including the Indian rupee and US dollar. Approved companies must submit audited financial reports annually within six months after each fiscal year. Misuse of allocated foreign currency for purposes other than the approved IT investments will result in legal action.

People’s News Monitoring Service