Nepal Eases Rules for IT Firms to Expand Globally
Key Takeaways
- New regulations let Nepali IT firms invest abroad and bring back overseas profits
- The Cabinet approved changes to the Foreign Regulation Act in late January
- Moves aim to help Nepal hit a $6 billion IT export goal within ten years
Nepal’s Cabinet has approved amendments to the Foreign Regulation Act, opening the door for local IT companies to invest overseas and set up branch offices abroad. The decision, cleared on January 26, lets Nepali firms bring home income earned in foreign markets, supporting broader international competition and economic expansion. Companies must apply through the Ministry of Communication and Information Technology, which will evaluate their readiness before granting permission. Once approved, Nepal Rastra Bank will manage the foreign currency exchange.
Industry voices have responded positively, linking the change to Nepal’s ambition of reaching $6 billion in IT exports over the next decade. However, some experts caution that earlier investment rules remain unclear and call for more flexible policies to handle skilled workers and investment oversight effectively. In 2022, IT services contributed $515 million to Nepal, representing 1.4% of GDP and 5.5% of foreign exchange reserves. To further encourage growth, the government plans tax incentives for IT firms based in special economic zones, hoping this will create jobs and keep key operations within Nepal.
