Working Capital Loan for Branch/ NRB Approval

Every company requires a initial funds in their bank account to establish a office set up, workspace and fees for professionals like auditors, accountants and lawyers. So, we will dive into two major practices currently being used by most of the foreign companies in Nepal.

1. Foreign companies want to have a business in Nepal can establish a company by getting approval of Foreign Direct Investment “FDI” from the concerned body of Government of Nepal. Such subsidiaries or branch companies can remit the initial funds required to establish a company from fresh as a share capital investment.

2. But what about branches with zero capital? What, branches with zero capital are possible in Nepal?Yes. Foreign companies having contracts in Nepal from the entity of Government of Nepal must register its branch in Nepal to complete such projects. And all the foreign companies which attracts mandatory Permanent Establishment “PE” must register themselves as branch in Nepal.In such cases, head office can provide the working capital loan to its branch in Nepal and can kick off its operation in Nepal. The branch shall obtain approval from Nepal Rastra Bank “NRB” for such working capital loan. At first, NRB provides approval of such loans for one year and later branch can obtain extension as per its operation in Nepal.

   Please refer to the PDF attached for detailed process of approval from NRB.

NRB Approval Process for Working Capital Loan