Nepal Rastra Bank (NRB) has introduced revised regulations enabling information technology (IT) companies to invest abroad, marking a significant step in liberalizing outbound investment from the country. Under the fourth amendment to the Foreign Investment and Foreign Loan Management Regulations, has set the limit for overseas investment by IT firms at USD 1 million or an amount equivalent to 50% of their average foreign currency earnings from IT service exports over the past three fiscal years, whichever is lower.

The move is aimed at facilitating global expansion for Nepalese IT businesses, provided they meet specific criteria. To qualify, companies must have earned foreign exchange through IT service exports for at least the last three consecutive fiscal years. Additionally, any overseas investment must remain within the limits of the company’s paid-up capital and must pertain to IT-related sectors.

NRB will provide the necessary foreign currency exchange facilities to eligible companies under these revised provisions, aligning with existing industrial laws.

This regulatory update follows the Government of Nepal’s broader policy shift, announced in the budget for fiscal year (FY) 2025/26, which opens the door for Nepali individuals and companies to invest abroad for the first time. The budget allows firms to establish overseas sales branches or processing plants by exporting semi-processed goods. Companies may invest up to 25% of their annual export income for this purpose, with a requirement to repatriate at least 50% of the profits generated abroad.

The reform aligns with recommendations from a high-level economic reform commission, which had previously urged the government to permit outbound investment to enhance competitiveness and support international business expansion.

These measures collectively mark a pivotal shift in Nepal’s investment policy, signalling a more outward-looking economic strategy and offering new opportunities for the country’s growing IT sector.