Foreign Exchange and Banking for IT and Service Exporters
Nepal's foreign exchange rules for service exporters sit in a Nepali-language circular replaced every year. What it governs, and what cannot be verified.
The rule that decides whether a Nepali software firm can be paid sits in a circular, reissued in full once a year, published in Nepali, and amended between editions by numbered circulars that assume the reader already has the consolidation open. No statute a foreign lawyer would think to read contains it.
Where the authority comes from
The Foreign Exchange (Regulation) Act 2019 (1962) gives Nepal Rastra Bank control over dealings in foreign exchange. The Act was among six statutes amended by the omnibus act authenticated on 31 March 2025. Everything operational sits below it. The Bank’s Foreign Exchange Management Department issues the circulars. Commercial banks act as authorised dealers, and they are the point at which an exporter meets the rule.
The Department consolidates rather than codifies. It publishes a unified circular that supersedes the previous one entirely, then amends it during the year. The recent sequence is visible in the Bank’s own archive.
| Edition | Issued | Issuing circular |
|---|---|---|
| Unified Circular 2079 | 2079/12/20 | 18/2079–80 |
| Unified Circular 2080 | 2080/09/26 | 06/2080–81 |
| Unified Circular 2081 | 2081/12/22 | 7/2081–82 |
| Unified Circular 2082 | 2082/12/24 (7 April 2026) | 11/2082–83 |
Unified Circular 2082 has since been amended by Circular 12/2082–83 of 9 June 2026 and Circular 1/2083–84 of 23 July 2026. A compliance note written against the 2081 edition is describing a text that no longer exists.
This matters more than it sounds. In most jurisdictions foreign exchange controls sit in a regulation amended at the margin, so a rule learned in one year is still recognisable in the next. In Nepal the whole instrument is replaced annually, in a language most foreign counsel cannot read, in a font encoding that defeats ordinary text extraction. Even careful firms end up relying on their bank’s relationship manager to tell them what the rule currently is, and the bank’s interpretation becomes the operative rule.
What other instruments show
Two things can be said with confidence, because they come from sources outside the circular.
Nepali law contemplates residents receiving foreign currency for services rendered abroad, including by individuals. Income tax section 95A applies a 5% final rate to a resident natural person, not carrying on a business, who receives foreign currency for software or other electronic services supplied outside Nepal. A tax provision written for a transaction implies the transaction is lawful. It says nothing about which channel the money must come through, and the tax code answers that question nowhere.
The payments infrastructure a service exporter might otherwise use is closed to foreign ownership by design. Nepal Rastra Bank’s licensing policy for payment institutions has two licence categories, payment service provider and payment system operator, with minimum paid-up capital of NPR 50 million for a provider without card issuance, NPR 250 million with cards, NPR 400 million for an operator, and NPR 800 million where international payment operations are involved. Foreign investment in such an institution may not exceed 15% of paid-up capital. A global payment platform cannot take control of a licensed Nepali entity, so it does not build one. That leaves exporters with banks and licensed remittance companies as the compliant inbound channels.
Purpose codes and reporting
Nepal’s recorded ICT service exports were US$133.8 million in 2024. Practitioners describe a considerably larger flow. The reconciliation runs through reporting rather than through evasion.
Nepal Rastra Bank’s International Transaction Reporting System Guidelines 2022, issued on 29 August 2022, set how banks report cross-border transactions to the central bank. Reporting of this kind works by purpose code. The receiving bank classifies an inbound payment, and that classification is what the balance of payments records. A payment for software development received into a personal account through a remittance corridor can be coded as a personal transfer. Coded that way it never appears as a service export, however plainly it was a fee for services.
The consequence is circular. Because individual receipts are easiest through remittance channels, they are coded as transfers. Because they are coded as transfers, the recorded IT export figure stays low. Because the recorded figure stays low, the sector attracts less policy attention than its actual foreign exchange contribution would justify.
The regulatory sandbox
Nepal Rastra Bank issued Guidelines on the Regulatory Sandbox with an operative date of 14 May 2026, notified on 18 June 2026. Participants must be incorporated in Nepal, must field at least two full-time technical staff and a project manager with two or more years of fintech experience, and test for a maximum of six months, extendable by up to six further months with the Bank’s approval. The application window runs 45 working days and evaluation up to 120 working days.
The sandbox is a route for testing a regulated financial product. Nothing in its design suggests it was meant to give a technology exporter different foreign exchange treatment, and it does not. Its relevance here is narrower. It is the first formal mechanism by which a Nepali fintech can propose a payment arrangement to the central bank and get a structured answer.
FATF monitoring
One further constraint sits on top of the foreign exchange rules, and it comes from outside Nepal. Nepal remained under the Financial Action Task Force’s increased monitoring as at the June 2026 statement. For a service exporter that is no abstraction. Correspondent banks apply enhanced scrutiny to flows into monitored jurisdictions, and Nepali banks in turn apply enhanced customer due diligence to inbound receipts to keep their correspondent relationships. The friction an exporter meets at the counter often originates in a correspondent bank’s compliance department in Singapore or Frankfurt, with nothing in the unified circular behind it.
Documentation quality therefore does more work in Nepal than in a comparable market. A receipt supported by a signed services agreement, a matching invoice, a registered entity with a permanent account number and a consistent purpose code across payments is a different compliance object from a payment of similar size arriving into a personal account with no underlying paperwork. The rule may be the same for both. The outcome at the bank is not.
What we do not state
No repatriation deadline for service export proceeds appears here, nor whether service exporters may hold foreign currency accounts, nor how platform-based freelancer receipts are treated. Those rules, if they exist in their current form, live in Unified Circular 2082, published in Nepali in a legacy encoding that could not be read reliably and for which no English version was located. Stating a number from memory or from secondary summaries would be worse than leaving the gap visible.
An exporter who needs the answer has one reliable route, and it is unglamorous. Obtain the current unified circular and the two amending circulars from the Bank’s Foreign Exchange Management Department archive, and have the relevant sections read by counsel who works in Nepali. Anything else is a paraphrase of a document that was replaced in April.
Sources
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Nepal Rastra Bank, Foreign Exchange Management Department · Unified Circular 2082 issued 2082/12/24 (7 April 2026); earlier editions 2081 (2081/12/22), 2080 (2080/09/26), 2079 (2079/12/20) · Tier 1 — Primary legal instrument
Supports: That the unified foreign exchange circular is reissued annually and that the 2082 edition is the current one.
Accessed 26 August 2026
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Foreign Exchange Management Department circulars, FY 2082/83 and FY 2083/84
Nepal Rastra Bank · Circular 11/2082–83 of 7 April 2026; Circular 12/2082–83 of 9 June 2026; Circular 1/2083–84 of 23 July 2026 · Tier 1 — Primary legal instrument
Supports: The issue date of Unified Circular 2082 and the dates of the two amending circulars.
Accessed 26 August 2026
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Nepal Rastra Bank, Payment Systems Department · Policy 2079; first amendment 2080, notified 9 July 2023 · Tier 1 — Primary legal instrument
Supports: Two licence categories (payment service provider and payment system operator); minimum paid-up capital of NPR 50m, NPR 250m, NPR 400m and NPR 800m by category; the 15% cap on foreign investment in a licensed payment institution.
Accessed 26 August 2026
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International Transaction Reporting System (ITRS) Guidelines, 2022
Nepal Rastra Bank · 29 August 2022 · Tier 1 — Primary legal instrument
Supports: The existence and date of the ITRS reporting framework for international transactions.
Accessed 26 August 2026
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Nepal Budget 2083/84 (2026/27) — Key Highlights
NBSM (chartered accountants, Kathmandu) · Budget presented 29 May 2026 · Tier 6 — Professional or news source
Supports: The section 95A 5% final rate for a resident natural person receiving foreign currency for software or electronic services supplied outside Nepal.
Accessed 26 August 2026
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Guidelines on the Regulatory Sandbox
Nepal Rastra Bank, Payment Systems Department · Operative from 14 May 2026; notified 18 June 2026 · Tier 1 — Primary legal instrument
Supports: The existence, operative date and testing period of Nepal Rastra Bank's regulatory sandbox.
Accessed 26 August 2026
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