Joint Ventures, Technology Transfer and Branch FX — Approval and Settlement Records

A percentage royalty needs a verifiable revenue base and contract period. A head-office cost allocation needs supporting services and a defensible allocation, not only an internal debit note.

NRB's Foreign Investment and Foreign Loan Management Bylaw, 2078, fifth amendment dated 2082/09/14, distinguishes ordinary approved foreign-investment inflow from foreign borrowing and later outward payments. Regulation 4(1) removes NRB prior approval for the ordinary approved investment inflow described there, while preserving the prescribed written information before receipt and the authorised bank's documentation. Regulation 5(1) requires recording the qualifying inflow within six months. This does not turn an unapproved activity or a loan into an automatically permitted equity investment.

Match the investor, approved recipient, currency, remitting account and investment purpose with the bank receipt and recording application. A receipt reference is not a substitute for the investment approval or the later recording evidence. If funding arrives in instalments, reconcile the amount received, the amount recorded and the amount still permitted under the approval. Escalate a receipt from a different person before using it as the investor's subscription evidence.

Regulation 6 of that bylaw provides a repatriation framework involving licensed commercial banks, supporting records and the competent authority's approval or recommendation where required. Its special branches and exceptions must be read separately. Before requesting a payment, identify whether it is a dividend, disposal proceeds, royalty, loan repayment or a branch closing balance. The contract, legal entitlement, tax working and approval conditions must all agree.

An October 2026 NRB circular changes specified service-remittance delegation amounts. It does not create a universal permission to send any service invoice abroad. Use the relevant current clause, sector recommendation where required, payment conditions and bank evidence. Technology-transfer fees should also reconcile with the approved contract and commercial base; classifying a royalty as a general service payment may leave the approval problem unresolved.

A Nepal venture pays a foreign partner for brand rights and production assistance. The file identifies the distinct rights and services, approved agreement, calculation base, tax treatment and lawful remittance route. Changes in fee or territory are assessed for amendment/approval requirements rather than implemented from a side email alone.

For a hypothetical royalty calculated at an agreed three percent of verified eligible sales of NPR 10,000,000, the contractual calculation is NPR 300,000. This example assumes that the agreement and fee basis are lawful; it establishes no regulatory rate or ceiling. Keep the sales reconciliation, excluded items, credit notes, reporting period and any withholding or foreign-exchange calculation with the payment request. If the revenue base later changes, record the correction and its effect on the next settlement.

A branch or foreign company ceasing operations must address corporate, sector, tax and FX closure separately. Settle employees, creditors, assets and outstanding returns, obtain required decisions and preserve records. A remaining bank balance cannot be remitted merely because the project ended; establish entitlement and the current permission route.

Reconcile inward investment and loan records to subsequent payments and the approved legal structure. Monitor extensions and scope changes. Check current thresholds, delegated powers and remittance conditions for the actual transaction.