Repatriation by Foreign Investor

A foreign investor may repatriate its investment and/or earnings in accordance with the prevailing laws of Nepal after paying all applicable taxes. The foreign currency exchange facility to repatriate the foreign investment and earned money is provided by NRB normally based on approval/ recommendation of Foreign Investment Approving Authority or the concerned body.

Foreign exchange facility is provided by NRB for the repatriation of following foreign investment and earned money.

1. The amount received from the sale of shares of foreign investment,
2. The amount of profits or dividends received from foreign investment,
3. In case the company or industry has gone into liquidation, the amount that remains after the entire liability has been settled after the liquidation.
4. Amount of gain (royalty) received under technology transfer agreement, but, in case of royalty or fee for the use of trademark under technology transfer in the alcoholic industries other than 100% liquor exporting industry, the amount of such gain shall be as per the Foreign Investment and Technology Transfer Regulations, 2077,
5. Lease rent amount under lease investment,
6. The amount of damages or indemnity received from the final settlement of a case, arbitration or any other legal proceedings in Nepal.
7. The amount to be repatriated in accordance with the prevailing laws.

Procedure for repatriation of Investment / Return

• Apply to FDI approving authority or concerned body for approval of repatriation
• Get Approval letter for repatriation
• Apply to Foreign Exchange Facilitation Unit of NRB located at single point service centre for foreign exchange approval for repatriation
• After getting approval from NRB, repatriate the investment / earned money

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Approval of Repatriation from DOI

Repatriation on Sale of Share

For the repatriation of the sale of shares of the foreign investor, he/she or the concerned company must apply to the Department of Industry with the following documents.

• Application in the prescribed format
• Copy of the Board of Director’s resolution
• Updated Share Register from the Office of Company Registrar
• Updated Directors Register from the Office of Company Registrar
• Latest Audited Financial Statements
• Latest Tax Clearance Certificate
• Endorsement letter from NRB as a proof of Foreign investment made and recorded in NRB
• Approved Share Sale/Purchase agreement
• Approval letter of Share sale/purchase form DOI/CRO
• In case company has gone into liquidation, Tax Clearance certificate and the proof of any residual amount
• Share Valuation Report
• CIB Report whether blacklisted or not

Repatriation of Dividend

Any foreign investor wishing to repatriate his dividend from his investment as per the FITTA 2019 has to obtain approval from the DOI. The foreign investor or the company has to apply to the DOI with the following documents:

• Application in the prescribed format
• Copy of the Board of Director’s resolution
• Updated Share Register from the Office of Company Registrar
• Updated Directors Register from the Office of Company Registrar
• Latest Audited Financial Statements
• Latest Tax Clearance Certificate
• Endorsement letter from NRB as a proof of Foreign investment made and recorded in NRB
• Decision of the BOD and AGM for the dividend and Bonus allocation / approval
• Proof of distribution of bonus to employees as required by the Bonus Act
• Proof of payment of required tax in the concerned tax office.
• CIB Report whether blacklisted or not

Repatriation of Loan and Interest

The industrial unit with foreign loan (as a part of foreign investment)  has to apply to the DOI for sending out the principal and interest on foreign loan obtained with the approval of DOI along with the following documents:

• Application in the prescribed format
• Copy of the Board of Director’s resolution
• Updated Share Register from the Office of Company Registrar
• Updated Directors Register from the Office of Company Registrar
• Latest Audited Financial Statements
• Latest Tax Clearance Certificate
• Endorsement letter from NRB as a proof of Foreign investment made and recorded in NRB
• Letter of approval of the loan agreement
• Proof of payment of required tax in the concerned tax office
• CIB Report whether blacklisted or not

Repatriation of Technology Transfer Fee /Royalty/ Lease Rental

The industrial unit with approved Technology Transfer Agreement (TTA), trademark license agreement, management agreement, technical assistance agreement can apply to the DOI for the transfer of fees as per the agreement. The company has to submit the calculation of the amount due to the foreign technology supplier certified by the auditor along with the certificate of payment of income tax on royalty as per the prevailing tax rate. Normally Following documents are required:

• Application in the prescribed format
• Copy of the Board of Director’s resolution
• Updated Share Register from the Office of Company Registrar
• Updated Directors Register from the Office of Company Registrar
• Latest Audited Financial Statements
• Latest Tax Clearance Certificate
• Endorsement letter from NRB as a proof of Foreign investment made and recorded in NRB
• Approved technology transfer documents along with the calculation of the fees
• Approved TTA/ lease rent agreement
• Proof or payment of applicable taxes on royalty/lease rental.
• CIB Report whether blacklisted or not

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Approval of Foreign Exchange facility from NRB for Repatriation of investment and earnings

The foreign currency exchange facility to repatriate the foreign investment and earned money is provided by NRB based on approval/ recommendation of Foreign Investment Approving Authority or the concerned body. However, in case of transaction whose nature is such that the approval of Foreign Investment Approving Authority or the concerned body may not be available approval for foreign currency exchange facility to repatriate the foreign investment and earned money may be provided by the NRB on the basis of necessary evidence and justification.

While providing approval for foreign currency exchange facility for repatriation of foreign investment and earned money, such approval for foreign currency exchange  is provided in such a way that the amount of foreign investment and earned money to be repatriated shall be deposited in the bank account of the same foreign investor in whose name the foreign investment has been originally received and generally in the same country from where initial foreign investment was made.

Following documents are required to be submitted to NRB for approval of Foreign Currency Exchange facility for repatriation.

1.    Approval from the Foreign Investment Approving Authority for repatriation of foreign investment and earnings,

2.    A copy of the decision of the general meeting or the board of directors or the authorized officer of the company / industry with the foreign investment for obtaining the approval of foreign currency exchange facility to repatriate investment and earnings,

3.    Copy of proof of recording/accounting of foreign investment in NRB,

4.    Copy of latest audit report,

5.    Copy of latest tax clearance certificate or proof of Submission of tax return,

6.    Proof of company / industry not being blacklisted by Credit Information Bureau,

7.    Self-declaration from the applicant regarding no overdue loans from Nepali banks and financial institutions, no misappropriation of foreign currency, no outstanding tax liability, compliance with prevailing national and international legal provisions relating to prevention of financial investment in money laundering and terrorist activities and compliance with prevailing legal provisions,

8.    In case of gain from technology transfer, a copy of the details of the amount as per the technology transfer agreement certified by the accredited auditor and the invoice issued by the concerned investor,

9.    In case of sale of shares of institutions not listed in Security market, a Copy of valuation of assets and liabilities (Due Diligence Audit) from the auditor disclosing the price per share,

10.  Proof of payment of applicable advance income tax and value added tax (VAT) on the amount to be repatriated.

11.  A copy of the letter from OCR regarding latest update (Adhyawadhik) of the company.

Note:

1) The applicant shall be an authorized officer.

2) In the case of repatriation of foreign investment from the sale of shares by the listed company/industry through the stock market in accordance with the prevailing law, the documents mentioned in No. 2, 4, 5 and 6 shall not be required for such listed company/industry.

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Approval of Foreign Exchange facility from NRB for repayment of foreign loans

The foreign currency exchange facility required for repayment of principal and interest of foreign loan approved by NRB and accounted by NRB and included in the payment schedule approved by NRB can be obtained from the Banks and Financial Institutions. The approval of NRB is not required for such exchange facility.

For the exchange facility of foreign currency required for the payment of foreign loan the concerned borrower shall file an application including following  documents :

1.    Copy of proof of foreign debt accounted /recorded in NRB,

2.    Copy of latest audit report,

3.    Copy of latest tax clearance certificate or proof of Submission of tax return,

4.    A copy of the letter from OCR for the latest update (Adhyawadhik) if loan repatriated by the Company.

5.    Proof of not being blacklisted by Credit Information Bureau,

6.    Self-declaration from the applicant regarding no over-due loans from Nepali banks and financial institutions,

7.    Self-declaration from the applicant regarding no misappropriation of foreign currency, compliance with prevailing national and international legal provisions relating to prevention of financial investment in money laundering and terrorist activities and compliance with prevailing laws.

8.    Proof of payment of TDS while paying interest.

           ( If the borrower is natural person, documents as mentioned in (2) and (3) is not required.)

When repaying a foreign loan, the amount shall be deposited in the bank account of the same foreign lender in whose name the foreign loan has been received and generally in the same country from where the foreign loan has entered.

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