NRB Eases Foreign Currency Payments for Service Imports

Nepal Rastra Bank (NRB) has eased rules for making foreign currency payments on service imports, including fees for language proficiency and standardized tests such as TOEFL, IELTS, PTE, GRE, GMAT, and SAT.

Under the revised provision in the Unified Foreign Exchange Directive 2081, Nepali institutions importing such services from foreign providers can now receive foreign exchange facilities of up to USD 15,000 per transaction. Previously, there was no provision for making such payments.

To access this facility, firms, companies, or institutions must submit their registration and tax certificates, tax clearance or filing proof, advance tax payment records, the latest audit report, invoices for the imported service, and, in cases where an agreement is required, an authenticated contract with the service provider.

Higher Limits Without Regulator’s Recommendation
The central bank has also increased the limit for importing services without the recommendation of the regulator from USD 12,000 to USD 15,000 per transaction. Similarly, advance payments of up to USD 15,000 or equivalent in convertible foreign currency for service imports will no longer require a foreign bank guarantee. This limit was previously USD 12,000.

For technical education, vocational training, and online learning, payments of up to USD 5,000 annually—either in a lump sum or installments—can be made directly to the foreign institution. This provision did not exist before.

Nepali firms or institutions can now also enter into service agreements or make payments abroad of up to USD 8,000 per transaction without approval or recommendation from their regulator, up from the earlier USD 5,000 limit.

Relief for Insurance Companies
NRB has removed the requirement for prior approval when Nepali insurance companies pay individuals from India or other countries for specialist services such as actuarial, survey, or valuation work. These payments can now be made through commercial banks based on a recommendation from the Nepal Insurance Authority, with no limit on the amount.

Facilitation for Airlines
For airline operators, the requirement for a regulator’s recommendation previously applied to service imports of up to USD 100,000. Under the new rule, no such recommendation is needed for payments up to USD 8,000 or INR 500,000.

Relief for Foreign Nationals Working in Nepal
Foreign nationals, including Indians, can now remit their entire post-tax salary earned in Nepal to their home country. Earlier, they were allowed to remit only up to 70 percent of their net salary.

Vehicle Imports Linked to Pollution Standards
Through the same directive amendment, NRB has prohibited the import of reconditioned or used vehicles and other transport equipment that do not meet the Nepal Vehicle Emission Standard 2082.

Under the new government standard, two-wheelers, three-wheelers, and small four-wheelers must comply with Euro 5 norms, while larger four-wheelers must meet Euro 6 norms. Previously, imports were allowed under the 2012 standard, which permitted vehicles meeting up to Euro 3 emission norms.