NICCI asks NRB to ease repatriation, remittance, working capital guideline

KATHMANDU: Nepal-India Chamber of Commerce and Industry (NICCI) appraised various issues including the repatriation of dividends and salaries of foreign employees, hassles with payments for cross-border services and the effectiveness of the single-window service at Nepal Rastra Bank (NRB).

A team from NICCI, led by its President Sunil KC, met with the newly appointed Governor of NRB, Dr Biswo Nath Poudel, on Wednesday at his office and apprised him of various issues faced by Indian multinational companies (MNCs) in Nepal.

Congratulating Dr Poudel on his appointment as the 18th governor of NRB, NICCI President KC apprised him of the gamut of issues faced by Indian joint venture companies in Nepal and requested that he facilitate their operations. “Indian joint ventures are Nepal’s major stakeholders in economic growth and employment creation,” he said, urging the central bank governor to assist foreign investors.

Berger Paints’ Saibal Gosh apprised Governor Poudel of the lengthy repatriation process and requested that it be expedited. “To repatriate dividends, companies must obtain NRB approval, submit audited financial statements, tax clearance certificates and verify that profits were earned through operations permitted under foreign direct investment (FDI) norms,” he said, adding that foreign employees must individually seek NRB approval to repatriate their salaries. This process involves bank documentation, employment contracts and proof of income tax paid, and only 70% of the salary is allowed for repatriation, which needs to be reviewed.

Likewise, Dabur Nepal’s legal department, represented by Sumitra KC, requested that the governor eliminate the duplication of paperwork due to the ineffectiveness of the Single Window Service Centre. “The Service Centre was established to ease the process of sending payments to parties for services obtained by companies from foreign service providers. However, the current practice does not reflect its intended purpose and there remains a duplication of the process between the Department of Industry and NRB when obtaining permission, which is time-consuming and needs to be reviewed and simplified,” she said.

Executive Director of GoldStar Shoes, Vidushi Rana, also requested that the governor facilitate access to export incentives, as this will help make Nepali products competitive in foreign markets.

On the occasion, National Insurance chief executive officer Navneet Gupta requested that the central bank increase the cash limit carried by Indian tourists visiting Nepal. Likewise, the Chief Financial Officer (CFO) of Asian Paints, Sameer Shrestha, requested that the governor adopt a more liberal approach to restrictions on outward remittances. “Paying for technical services, consultancy, software licensing and digital services outside Nepal – including from India – requires prior NRB approval, especially for amounts above a certain threshold of INR 100,000 for Indian companies and $5,000 for third-country companies operating in Nepal. These thresholds need to be reviewed to reflect the current market and practice,” he added.

Similarly, the chairman of Sanima GIC, Kunal Kayal, requested that the governor make the Working Capital Guideline more practical and timely.

Responding to the issues raised, central bank Governor Poudel informed the team that he had already given instructions to the relevant departments to ensure that permission for repatriation procedures is granted within 14 days of receiving an application and that genuine issues falling under the NRB’s domain would also be addressed favourably to ease all concerns.