NRB Eases Overseas Investment Rules for IT Sector

Even if a Nepali Information Technology (IT) company has not earned foreign currency in previous years, it can now access foreign exchange settlement facilities of up to $20,000 for investment abroad.

Nepal’s central bank, through the fifth amendment to the Nepal Rastra Bank Foreign Investment and Foreign Loan Management Bylaw, 2021, has opened the door for newly established IT companies to invest overseas.

For years, IT companies had sought permission to operate abroad — particularly to open foreign branch offices. However, these efforts were blocked by the outdated Act Restricting Investment Abroad, 1964, a law dating back to King Mahendra’s reign. This changed in January 2025, when the government announced a reform package through an ordinance amending more than 30 laws. The overhaul aimed to remove legal barriers, streamline regulations, improve the business climate, and enhance public service delivery. Among the most significant changes was the creation of a legal pathway for Nepali IT companies to invest abroad. Firms can now invest overseas, open branch offices, and repatriate earnings legally.

To implement this, the NRB amended the Foreign Investment and Foreign Loan Management Bylaw, 2021, in June, allowing overseas investment of up to $1 million or 50% of a company’s average foreign currency earnings from IT service exports over the past three fiscal years — whichever is lower.

While the reform was seen as a step forward, many entrepreneurs and experts told New Business Age earlier this year that the eligibility criteria for overseas investment were too narrow, warning that the rules favoured only a small number of large firms already exporting IT services abroad.

Under the new amendment, the central bank has removed these conditions, allowing IT companies to access up to $20,000 for foreign investment without meeting prior export requirements.