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How to Register with Nepal Rastra Bank (NRB) for FDI — Step-by-Step Guide for Foreign Investors in Nepal

October 4, 2025 Banking & Finance by admin_lawsagar

Table of Contents

Introduction

This article provides a practical, step-by-step roadmap to register with Nepal Rastra Bank for FDI and comply with NRB’s foreign-exchange and recording requirements. It synthesises statutory obligations under the Foreign Investment and Technology Transfer Act (FITTA) 2019, NRB bylaws (Foreign Investment & Foreign Loan bylaw), and standard administrative practice of the DOI/Investment Board Nepal (IBN), the Office of Company Registrar (OCR), and Inland Revenue.

Key authorities you will rely on in the process:

FITTA (Foreign Investment and Technology Transfer Act, 2019).
Nepal Rastra Bank foreign investment/bylaw and procedural guidance (NRB).
Department of Industry / Investment Board (DOI/IBN) and InvestNepal procedural notes.

1. Overview: Who must register with NRB and why

If a foreign investor (individual or entity) invests capital into a Nepalese company — whether by subscribing to new shares, purchasing existing shares, or injecting loan/loan-equity — the enterprise must obtain and record foreign investment approvals and foreign-exchange facilities following FITTA, and complete the NRB formalities for recording the investment and obtaining foreign currency facilities.

Practically, NRB’s role is to:

permit movement and use of convertible foreign currency associated with FDI, and
record the capital inflow for statistical and regulatory purposes. The NRB approval/registration is therefore mandatory to bring convertible foreign currency into Nepal, to open foreign currency accounts, and to repatriate investment and returns later.

Bottom line: You do not complete an FDI inbound transaction in Nepal until you have satisfied NRB recording/approval and the related foreign-exchange formalities.

2. Legal framework — FITTA and NRB bylaws (what matters for registration)

A few provisions determine NRB’s role:

FITTA (2019): FITTA sets the FDI approval architecture (DOI/IBN → sectoral approvals → investor protections) and explicitly contemplates NRB’s approval for foreign exchange facilities (such as remittance, repatriation, payments to foreign experts, debt servicing). After the DOI/IBN recommends foreign exchange facilities, the NRB grants the foreign currency approvals and records the investment.
NRB Foreign Investment & Foreign Loan Bylaw / Directives: NRB has published implementing bylaws and directives that specify procedural details — how to register FDI, formats for certificates, how banks should confirm inward remittance, and the forms for recording foreign investment or approving foreign exchange facilities. These set out schedules, documentation, and the format of the NRB certificate that investors or banks rely upon.
Administrative practice: DOI/IBN issues the initial FDI approval letter (or recommendation). Thereafter, OCR registration, IRO tax registration and local business license follow. Finally, the company approaches NRB (normally through the commercial bank receiving the inward remittance) to record the investment and apply for foreign exchange facilities. Multiple practitioner guides and law firms track this sequential process.

Why this matters: NRB approval triggers the company’s access to foreign exchange — without it, the company cannot legally credit and use foreign currency inside Nepal, nor repatriate profits later.

3. Step-by-step process to register with Nepal Rastra Bank for FDI

Below is the stepwise roadmap you — or your client — should follow. Treat this as a checklist for legal compliance.

STEP A — Obtain formal FDI approval (DOI or Investment Board Nepal)

Identify competent approving body — small/standard investments: Department of Industry (DOI); large, strategic or infrastructure projects: Investment Board Nepal (IBN). Prepare project proposal and application under FITTA.
Submit application with: investor profile, project report, investment amount, source of funds, technical/financial feasibility, employment plan and environmental clearances (if required).
Obtain approval letter (Foreign Investment Approval Letter) from DOI/IBN — this is the key document to carry forward.

STEP B — Incorporate/register the company (Office of the Company Registrar)

Incorporate the company (Private Limited / Public as applicable) at the Office of the Company Registrar (OCR). Upload the approved MOA/AOA and the DOI/IBN approval as required.
Share allocation & paid-up capital: ensure share allotment and capital structure in incorporation documents reflect the FDI plan (foreign shareholding percentage, types of shares). Most banks and NRBs scrutinise these details.

STEP C — Obtain tax & local registrations

PAN / Tax registration at Inland Revenue Office (IRO) — necessary before operations and tax compliance.
VAT registration (where applicable).
Local business operating license (ward/municipal). NRB will expect tax registration details when recording FDI.

STEP D — NRB registration and foreign exchange approval (the core NRB step)

This is the step commonly referred to as registering with Nepal Rastra Bank for FDI.

Open a foreign currency (FC) account / FC-related formalities with a domestic bank: The Nepalese commercial bank (licensed bank) plays the front-end role. The investor or company coordinates with the bank where the inward remittance will be tendered. Banks are required to follow NRB formats and submit authenticated documents.
Remit foreign currency into Nepal: The foreign investor remits funds into Nepal in convertible foreign currency (USD, EUR, etc.) to the domestic bank’s FC account following the bank’s inward remittance procedures.
Bank issues certificate and forwards NRB application: After verifying inward remittance and supporting documents (FDI approval letter, incorporation certificate, share allotment evidence, source of funds, passport copies, bank confirmations), the bank will prepare NRB submission in the prescribed format (NRB schedule/certificate) to record the investment and to request any foreign exchange facilities (e.g., permission to repatriate profits, pay foreign experts, service foreign debt). The NRB bylaw provides the schedule/formats.
NRB records the investment and issues a certificate/permission: Upon satisfied verification, NRB records FDI and may issue (i) a recording/registration certificate and/or (ii) foreign exchange permission as per request (e.g., to open FC account, repatriate funds later). The recorded entry is the formal NRB recognition that the capital has been legally brought in under FITTA and NRB rules.

Key point: NRB typically acts after inward remittance and on the bank’s certification; banks are the conduit. You cannot “register” with NRB in a vacuum without inward remittance and DOI/IBN approval.

STEP E — Post-injection compliance

Statutory notice to NRB: The company must submit statutory notices (forms provided in NRB bylaws) of the share capital allotment, and bank confirmations to NRB within the timelines specified. Failure to notify may cause difficulty in obtaining foreign exchange facilities or repatriation later.
Foreign exchange facilities: If the company requires foreign currency to pay foreign consultants, repay external loans, service bonds or repatriate dividends/paid-up capital, NRB approval is needed — normally on recommendation of the approving body (DOI/IBN) or by relying on NRB’s own guidelines.
Recordkeeping and annual returns: NRB conducts surveys and requires periodic disclosure of foreign investment statistics (NRB FDI surveys). Companies may need to respond to NRB’s data calls and keep books showing the origin and application of FDI funds.

4. Documents checklist

Below is the practical checklist you should assemble BEFORE approaching the bank/NRB:

A. From investor:

Notarised passport copy of foreign investor(s) / company registration and certificate of incorporation of foreign corporate investor
Board resolution of the foreign investor (if corporate) approving the investment
Source of funds declaration + supporting documents (bank statements, certified source certificates)
KYC documents (AML compliance)

B. From the Nepalese company:

DOI/IBN FDI Approval Letter (original / certified copy).
Certificate of incorporation / OCR registration certificate
Memorandum & Articles of Association (MOA/AOA) showing authorised/paid-up capital and foreign shareholding clause
Share allotment resolution and share transfer agreement (if FDI via purchase)
Notarised copy of the share register and updated shareholder list
Tax registration (PAN), VAT registration (if applicable), and local business license
Board resolution accepting investment and authorising the bank/signatory
Project report/utilisation plan (if requested by DOI/NRB)

C. Bank paperwork:

Inward remittance advice / SWIFT copy showing funds received
NRB prescribed forms/certificate formats for recording foreign investment (see NRB bylaw schedules)
Bank letter certifying inward remittance and AML verification

D. Additional supporting:

Environmental clearance (if required by DOI)
Technical agreements (if it’s a technology transfer)
Loan agreements or shareholder agreements for hybrid instruments

Tip: Provide certified translations where original documents are not in English/Nepali. NRB and DOI prefer authenticated documents.

5. Practical tips, timelines, and common pitfalls

Timelines

DOI/IBN approval: typically 2–8 weeks, depending on project complexity and sector (larger projects take longer).
Incorporation & OCR registration: 1–2 weeks (if all documents are ready).
NRB recording/foreign exchange permission: bank processing + NRB review 1–4 weeks, often running parallel with other registrations. Practitioners report that the full FDI process often completes within 2–3 months if no complications; complex cases take longer.

Common pitfalls (and how to avoid them)

Missing DOI/IBN approval — NRB will not record FDI without the DOI/IBN approval letter or recommended permission. Fix: sequence approvals correctly.
Incomplete bank paperwork / AML checks — banks must be satisfied about the source of funds. Fix: get certified bank statements, source documents, and KYC ready.
Mismatch in shareholding / MOA language — if shares issued do not match DOI approval, NRB/bank will query. Fix: align MOA/AOA, share allotment and DOI approval.
Failure to notify NRB after injection — later repatriation may be blocked. Fix: file a statutory notice and obtain an NRB recording promptly.
Ignoring sector restrictions — some sectors may be restricted or conditional for FDI. Fix: check the FITTA negative list and sectoral policy before committing.

Practical negotiation points

Seek bank pre-approval on documentation before instructing remittance — it saves time.
Use escrow or conditional share purchase mechanisms to coordinate share transfer with remittance and NRB recording.
For larger investments, engage NRB/DOI advisors early to clarify foreign exchange facilities and repatriation conditions.

6. FAQ — concise answers (legal view)

Q1: Do I need NRB approval before remitting money into Nepal?
A: In practice, the bank will accept inward remittance but will request DOI/IBN approval and supporting documents for NRB recording and foreign exchange permission. Without proper DOI approval and NRB recording, you may face restrictions on using/repatriating funds.

Q2: Can a foreign investor buy existing shares (secondary acquisition)?
A: Yes, FDI via purchase of existing shares is allowed, but the acquisition and subsequent inward remittance must be notified and recorded with NRB; DOI/IBN approval and OCR formalities still apply.

Q3: How is repatriation of profits handled?
A: NRB grants foreign exchange facilities for repatriation on proof of taxes paid and subject to FITTA/NRB conditions. Repatriation normally requires NRB permission and bank facilitation.

Q4: What documents prove the “source of funds”?
A: Auditor-certified bank statements, investment sale documents, loan agreements, board resolutions and notarised declarations — banks and NRB require clear provenance to satisfy AML requirements.

Q5: Are there shareholding limits for foreigners?
A: FITTA and sectoral policies specify sectors with restrictions; certain sectors may cap foreign shareholding or be closed. Always check FITTA and sectoral lists before planning.

7. Checklist

DOI/IBN approval letter (original / certified)
Certificate of incorporation (OCR)
MOA / AOA (reflecting shareholding)
Board resolution accepting investment / authorising bank signatories
Share allotment certificate/share transfer agreement
Notarised passport / corporate extract of foreign investor
Source of funds documents (bank statements, sale agreement)
Tax registration (PAN), VAT (if applicable), and local license
Bank inward remittance SWIFT/advice
Bank letter certifying inward remittance and AML checks

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