Branch earnings are not a generic dividend file. A foreign company operating through a Nepal branch must consider the Income Tax Act’s foreign-permanent-establishment rules and the NRB foreign-exchange route for a branch. The starting point is a clean operating and registration record under the branch office registration guide.
How to Repatriate Branch Office Profits from Nepal
- Confirm the amount proposed for remittance and the relevant financial year.
- Reconcile the amount with the branch’s audited Nepal accounts.
- Confirm the applicable branch tax treatment and complete the required tax payment/evidence.
- Prepare the authorised corporate decision for the remittance.
- Gather the foreign-investment recording and branch registration evidence.
- Obtain the current Schedule 9A requirements from the authorised bank or NRB.
- Prepare the audit, tax, compliance and banking records.
- Confirm the intended foreign recipient and destination country against the investment record.
- Submit the foreign-exchange/remittance file through the applicable route.
- Retain the approval and bank-execution evidence after payment.
What is being remitted?
The Income Tax Act treats a Nepal foreign permanent establishment of a non-resident as responsible for income tax on its income. It also provides that income sent abroad by that foreign permanent establishment is treated as a dividend distribution for the Act’s purpose. That is why a branch should not copy a subsidiary’s generic shareholder-dividend checklist.
This page does not state a current corporate-tax or remitted-income tax rate. Rate schedules and Finance Act implementation can change, so confirm the applicable tax-year treatment using current Inland Revenue Department guidance and the branch’s advisers. For general rate context, see corporate tax rates in Nepal, then verify the current treatment for the branch’s own year and activity.
The NRB route is branch-specific
NRB’s Foreign Exchange Management Department currently publishes the Foreign Investment and Foreign Loan Management Bylaw with a fifth amendment in Nepali. Its published English reference is only through the third amendment. The English reference directs a branch-office foreign-exchange facility to Schedule 9A, subject to the necessary evidence and justification.
That gives the branch a distinct framework, but it does not make remittance automatic. The bank and NRB process must match the branch’s registration, accounting, tax and foreign-exchange records.
Build the document file before applying
The last available official English Schedule 9A reference identifies a decision of the board, general meeting or authorised person; NRB foreign-investment recording evidence; audit material; tax-clearance or return evidence; Credit Information Bureau non-blacklisting evidence; compliance declarations; and proof of taxes applicable to the proposed repatriation. It also refers to the relevant approval or recommendation where available.
Treat that as a preparation map—not a claimed current exhaustive checklist. NRB’s current fifth-amendment text is Nepali and the English text has not been consolidated to that amendment. Obtain the current Schedule 9A list from the authorised bank or NRB before filing, and make the file consistent across all dates, names, financial years and amounts.
Audit, tax clearance and tax proof
The branch’s audited Nepal financial statements are central. The Companies Act requires foreign companies to prepare, audit and file Nepal-transaction balance sheet and profit/loss statements with OCR within six months after the financial year ends. The separate branch annual compliance checklist explains the continuing OCR record that supports this stage.
For tax evidence, do not treat a tax-clearance certificate as a substitute for analysing the proposed remittance. NRB’s English reference calls for current tax-return or clearance evidence and proof of taxes applicable to the amount proposed. Use the current tax clearance certificate guide for context, then confirm the evidence and tax treatment with the IRD and the bank for the actual fiscal year.
Recording, approval and bank execution
Before an application, reconcile the foreign-investment recording evidence, the authority decision supporting the remittance, the audited figures, tax records and bank trail. The applicant should be properly authorised. The English bylaw reference generally directs approved repatriation to the investor and country from which the investment was received, with a separate Schedule 9B mechanism for a different recipient country. That is a reason to identify the intended recipient early rather than change it late in the bank review.
Avoid promising a remittance date. The older English text includes a 15-working-day decision/information standard for a complete application, but the current public English text is not consolidated to NRB’s fifth amendment. It is therefore not used as a current processing promise here.
Branch remittance checklist
- identify the proposed amount and relevant financial year;
- reconcile audited Nepal accounts with the proposed amount;
- check current tax returns, clearance and proof of tax applicable to the remittance;
- prepare the authorised decision and foreign-investment recording evidence;
- obtain the current branch Schedule 9A list from the authorised bank or NRB;
- confirm the intended recipient and country against the investment record; and
- keep the application, approval and bank-execution evidence together.
Official Sources and Further Reading
- NRB Foreign Exchange Management Department — current Nepali fifth-amendment bylaw and English reference materials.
- NRB Foreign Investment and Foreign Loan Management Bylaw, including Fifth Amendment (Nepali) — controlling current text.
- NRB Foreign Investment and Foreign Loan Management Bylaw, English reference — Bylaw 6 and Schedule 9A; not a current consolidated English text.
- Income Tax Act, 2002 — section 68.
- Inland Revenue Department
- Foreign Investment and Technology Transfer Act, 2019
- Companies Act, 2063 — section 156.
