An NRN status is obtained by registration in the concerned authorities. As per the provisions of Sections 3 and 4 of the  Non Resident Nepali Act 2008 (hereinafter “the Act”) and Rules 3 and 4 of the NRN Rules 2009 (hereinafter “the Rules”), any NRN person or their family who wishes to be registered as an NRN should firstly submit an application for registration of their names before the Chief of Mission (if abroad) or before the Secretary of the Ministry of Foreign Affairs  (if in Nepal)  in the format as prescribed in Schedule-2 of the Rules , along with following application fees:

a. If the application is made in Nepal

1. NPR. 1500/- (Nepalese Rupees One Thousand and Five Hundred), or 

b. If the application is made in foreign country before the Chief of Mission

1. USD 20/- (Unite States Dollar Twenty) 

The Secretary or the Chief of the Mission or officials authorized by them shall examine the application and make decisions regarding registration. If the registration is deemed appropriate, the name of the applicant will be registered in record as an NRN, and an identity card will be issued in the name of the applicant/s, after collecting following fees: 

a. For Foreign Citizens of Nepali Origin:

1. USD 500/- (Five Hundred United States Dollar)  for citizens of countries in Europe, North America, South America, Australia,  New Zealand, Japan and Korea
2. USD 250/- (Two Hundred Fifty United States Dollar) for citizens of other countries

b. For Nepali Citizens Residing Abroad:

1. USD 50/- (Fifty United States Dollar)

For the purposes of registration, a person should have fulfilled the criteria of definition of an “NRN” under Section 2 Sub-Sections (a), (b), (c ) of the Act. 

As per the definition given under Sub-Sections (a), (b), (c ) of Section 2 of the Act, an NRN is:

a. Any person who is either a Foreign Citizen of Nepali Origin or a Nepali Citizen Residing Abroad falls under the definition of an NRN.

b. A Foreign Citizen of Nepali origin is defined as any person who himself/herself or whose father, mother, grandfather or grandmother was a citizen of Nepal and has subsequently acquired the citizenship of a foreign country other than member countries of SAARC. 

c. A Nepali Citizen Residing Abroad is defined as any person who has been residing in any foreign country except member countries of the SAARC for at least 2 (two) years and is engaged in any profession, occupation, business and employment therein. However, any person who is serving in a diplomatic mission or consulate situated in a foreign country under the assignment of the government of Nepal or who is studying in an academic institution situated in a foreign country does not fall under the definition of an NRN. 

In contrast, a resident Nepali person is a person who has Nepali citizenship and whose normal abode or residence is in Nepal and is engaged in any profession, occupation, business or employment in Nepal or by Nepali government in foreign countries. 

 The Income Tax Act 2002 levies income tax on all income earned in Nepal based on either source or residency. For the purposes of levying income tax in Nepal, a person whose normal abode is in Nepal or who  has continuously resided in Nepal for 183 (One Hundred and Eighty Three) days in any Income Year is considered to be a resident of Nepal (in case of Natural Persons). Similarly, in case of legal persons, a foreign permanent establishment in Nepal, a partnership firm registered in Nepal or a company incorporated under the laws of Nepal or a company whose effective management lies in Nepal in any Fiscal Year are considered to be residents of Nepal. If an NRN satisfies the above test for any Income Year, he/she is considered to be a resident of Nepal for that Income Year. 

An NRN and a company, partnership or a permanent establishment of an NRN if considered as a Nepali resident in any Income Year or NRN individuals who do not pass the residency test but  derive an income from any business, employment, investment or windfall gain having source in Nepal will fall within the income tax regime of Nepal and following rules and obligations will be applicable to them: - 

1. In the personal income of an NRN natural person,personal income tax proportional rate as specified in Schedule-1 of Finance Act 2022. 
2. In gross profit  generated by partnership, companies or foreign permanent establishments of an NRN in Nepal, corporate tax rate of 25% (this may be subject to certain sector-specific tax deductions as per the prevailing law).
3. 25% tax on windfall gains received by the NRN individual in Nepal or by their business or establishment in Nepal.
4. While repatriating income from investments in Nepal, the withholding tax in the following rates: 

1. 5% for dividends
2. 15% for Interests
3. 15% for service fees
4. 15% for Royalties received for technology transfer

Besides, provisions of Double Taxation Avoidance Agreements concluded between Nepal and the respective foreign country of the NRN will apply. As of now, Nepal has concluded DTAA with Eleven countries:  Norway, India, China, Pakistan, Sri Lanka, Qatar, South Korea, Mauritius, Thailand, Austria and Bangladesh. 

An NRN can make foreign investment in Nepal using convertible foreign currency, either by himself/herself in individual capacity or through a foreign company in which s/he owns more than 50 (fifty) percent shares. However, the investment can be made only  in industries and businesses made open to foreign investment as per the prevailing law, or in any business or industries made open to investment by NRNs  by the government of Nepal, by publishing notice in Nepal gazette. 

The Foreign Investment and Technology Transfer Act 2019 (FITTA) is the relevant legislation applicable to investments by NRNs as it places investments  made by NRNs under the definition of Foreign Investments (Section 2(k)). As per the prevailing law, foreign investments are open to foreign investors including NRNs in any sector except:

1. In industries or businesses listed in the Negative List under Schedule -1 of FITTA.
2. In businesses/industries not classified as an “Industry” under the Industrial Enterprises Act, 2076. 
3. Investment of an amount less than that specified by the Government of Nepal by publishing notice in Nepal Gazette. The threshold amount for foreign investment is currently NPR 20 Million. Furthermore, this threshold amount shall not be applicable to natural NRN persons for investing in Nepal through investment companies established by joint ventures of him/her and the government of Nepal. (Nepal Gazette, Vol. 72, Number 44, Part 5, 2079)

An NRN can make foreign investments in any of the following forms which fall under the purview of forms of foreign investment under the FITTA and the NRN Act:

1. Investment in shares of companies in Nepal in foreign currency
2. Reinvestment of dividends derived from shares or investment of foreign currency in industries 
3. Lease financing
4. Investment in venture capital fund
5. Investment made in listed securities through secondary securities market
6. Investment by purchasing shares or assets of a Nepali Company
7. Investment through banking system in stocks issued by Nepali industries or companies in foreign stock markets
8. Technology transfer 
9. Providing services as foreign technical consultant or management service by

concluding an agreement between the industry/business and the NRN.

However, NRNs looking to invest in Nepal should give notice to the concerned authorities as required by the law. Firstly, a prior approval from the Investment Board Nepal or the Department of Industries should be taken. Secondly, a notice should be given to Nepal Rastra Bank regarding the amount to be injected in Nepal along with declaration that the money to be invested was earned from lawful sources. Thirdly, the NRN should be registered in PAN and VAT. Fourthly, a bank account should be opened in a commercial bank of Nepal for the purposes of sending money from foreign countries for investment. Besides, if an NRN seeks to invest by registering a company in Nepal, approval from the concerned authority for registering a specific industry, along with compliances to registration process at the Office of Company Registrar and local authorities  should be followed. Finally, the Ministry of Foreign Affairs should be informed about the investment made in the format prescribed in Schedule- 7 of NRN Rules. 

The NRN Act 2008 provides that Foreign Citizens of Nepali Origin shall have the right to acquire, own and sell land and other properties in Nepal for the purpose of residing inside Nepal or for family purposes. However, the right is subject to limitations of law. A prior approval should be received from the Secretary of Ministry of Foreign Affairs for purchasing land by Foreign Citizens of Nepali Origin, by disclosing the location, area, and purchase price of the land. Furthermore, the NRN Rules 2009 sets limit on the area of land that can be acquired by a Foreign Citizen of Nepali Origin as follows: 

In respect of Nepali Citizens Residing Abroad, they shall have the right to acquire, own, exploit and dispose property in Nepal as any other Nepali citizens in accordance with the law. 

 NRNs with a valid NRN Identity Card can open and operate an account in convertible foreign currency for the amount earned by him/her in convertible foreign currency, in any commercial Bank or Financial Institution authorized by the Nepal Rastra Bank (NRB). However, in order to open and operate an account in convertible foreign currency, prior approval should be obtained from NRB. 

NRNs, like any other foreign investors, have the right to repatriate income from investments or the amount received by selling investments made in Nepal to their countries in convertible foreign currency that they had initially invested in, or in any other convertible foreign currency with the approval from NRB. As per Section 20 of FITTA 2019, proceeds from sell of shares, profits or dividends received in investments, remaining amount following settlement of all liabilities upon liquidation, Royalty received for technology exchange (subject to cap set by Foreign Investment and Technology Transfer Rules (FITT Rules) 2021, lease rent obtained under lease investment, compensation or damages amount received as per any court order or decisions of arbitration, mediation in Nepal, and other money that can be repatriated as per the prevailing laws. 

In order to repatriate the amount of investment made in Nepal and the income generated from such investments, an NRN should follow the procedures as follows: - 

1. Submit an application before the Secretary of Ministry of Foreign Affairs along with following details and documents:

1. Copy of certificate of  approval received for making investment in Nepal.
2. Decision of board of directors of the respective company or institution regarding repatriation of investment.
3. Copy of tax clearance certificate.
4. Audited balance sheet of the previous Income Year
5. Copy of certificate of payment of loans or liabilities, in case any loan has been taken from other persons or institutions
6. Name, branch and address of the bank through which the amount will be repatriated
7. Affidavit stating that no taxes or loans or other liabilities to be paid in Nepal are outstanding

The Secretary, upon receiving the application filed as above, may give approval to repatriate income earned from investments in Nepal in a single installment and in case of repatriation of investments made in Nepal,  the whole or partial amount of investment in single or multiple installments.  Following the approval, the NRN should submit an application before NRB for foreign exchange services in order to repatriate in convertible foreign currency. Only NRN investors who had previously notified NRB of their investment will be able to repatriate their incomes to their respective countries. 

 As per the provisions Constitution of Nepal 2015, only citizens of Nepal are eligible voters. In that regard, Foreign Citizens of Nepali Origin have no voting rights in Nepal. Nepali Citizens Residing Abroad shall have the right to vote provided that they return to Nepal to cast their votes. There is no provision as to the exercise of voting rights by Nepali Citizens Residing Abroad. 

The property law of Nepal prescribes limits on right to inheritance and succession of ancestral property by a foreign citizen. However, it makes an exception in case of NRNs. As per the property law, foreign citizens are forbidden to transfer, register in their names and extract benefits from ancestral immovable properties inherited or succeed by them without obtaining prior approval from the government of Nepal. However, both Nepali Citizens Residing Abroad and Foreign Citizens of Nepalese Origins can inherit the ancestral property without obtaining such approval (Section 433, Muluki Civil Code 2017). Nevertheless, a Foreign Citizen of Nepalese Origin should have a valid NRN ID Card to enjoy the said Rights. Furthermore, a foreign citizen who receives ancestral property by the way of inheritance or succession following approval by the government of Nepal should transfer such property to any other Nepali citizen and such foreign citizen shall only receive a temporary land ownership certificate for that purpose. However, an NRN can own the inherited and succeed property and receive a permanent land ownership certificate. 

In case of any disputes between an NRN investing in Nepal and Nepali investor, the dispute is settled through Arbitration, the mechanism for which is prescribed by FITTA 2019. Following the same, an NRN can seek legal remedies as per the following procedural provisions: 

1. Settlement through mutual discussion and dialogues under facilitation by the Department of Industries. In order to obtain this remedy, an NRN should apply to the Department for facilitating the resolution of disputes. 
2. In case the dispute cannot be settled within 45 (Forty Five) days as per (a), the disputes shall be resolved as per the agreement on dispute resolution between the parties, if any. For obtaining this remedy, an NRN should initiate proceedings for dispute resolution as agreed. 
3. In case there is no agreement on dispute resolution between the parties, the dispute shall be resolved through Arbitration as per the Arbitration Act of Nepal 1999. In order to obtain this remedy, an NRN should initiate Arbitration proceedings as per the Arbitration Act 1999. 
4. Unless otherwise agreed by the parties, the Arbitration proceedings shall be conducted in consonance with UNCITRAL Arbitration Rules and Procedures. 
5. The seat of Arbitration shall be Nepal and the substantive laws of Nepal shall apply for dispute resolution unless otherwise agreed by the parties.  
6. The parties may enter into a dispute resolution agreement after the dispute has arised and notify the same to DOI/IBN. In such a case, dispute will be resolved as per the aforementioned process. 

Besides, for disputes arising between an NRN and a Nepali citizen in individual capacity, such cases are handled as per the regular court procedures via litigation. An NRN can start a court litigation by duly registering the plaint in the concerned court having jurisdiction over the matter, within the provisions of Muluki Civil Code 2017. It is also important to note here that in civil matters that can be mediated as per the prevailing law, parties may choose to resolve their disputes through mediation even while a court case is pending. Mediation can be resorted to at any stage of litigation or arbitration, upon agreement between the parties (Mediation Act 2011). 

In matters relating to disputes between an NRN and their employer in Nepal, an NRN may file an application to the labor office and labor courts (for appeal against decisions of labor office) within the provisions of Labor Act 2017. Similarly, for legal remedies against decisions of any Offices or Departments, an NRN may file an application to appeal or review such decisions as per the prevailing laws. 

Immigration rule (11) Non-resident Nepali Act, 2064  The Non-Resident Nepali Act 2064 has specific provisions in section 3 that if a Non-resident Nepali or his/her family intends to register his/her name in such status shall submit an application before the prescribed authority with the fees as prescribed.

The Labor Act 2017 has specific provisions as to rights of foreign citizens, which directly apply to Foreign Citizens of Nepali Origin. The Act  protects an NRNs  by prescribing standards of employment while being employed in Nepal as followings: 

1. Employment contract should be duly executed between a foreign citizen and a Nepali employer stating out conditions of service, remuneration and benefits and other information relating to the employment.
2. Employment contract with a foreign citizen should be executed in such a language that the foreign citizen understands or in English. 
3. A foreign citizen being employed in Nepal can repatriate the amount of remuneration earned by him/her in a convertible foreign currency. 
4. The remuneration, conditions of service and benefits of an employee who is a foreign citizen shall not be less favorable than the standards set under the Labor Act or Labor Rules. 
5. The employment contract between the foreign employee and Nepali employer will remain valid for such period as mentioned in the contract, absent such contractual period, for a period of maximum three years.

The aforementioned provisions of the Labor Act of Nepal aim to protect foreign citizens, including those of Nepali origin, who have been employed in Nepal against discrimination or exploitation. These provisions make sure that an employment contract outlining working conditions, salary and benefit  exists in the language that the foreign citizen understands, that the right of the foreign citizen to repatriate remuneration earned in Nepal is protected, and that the foreign citizen has all the rights to minimum standards of employment provided elsewhere in the Labor Act. Similarly, Nepali Citizens Residing Abroad have all the rights under the Labor Act that other Nepali citizens have. 

Additionally,  Article 29(1) of the Constitution of Nepal provides Right against exploitation to every person. Sub-Article (4) of the same Article provides that no one shall be employed against their will. Article 34 of the Constitution protects Rights of Labor to reasonable remuneration, benefits and contribution based social security. TheseArticles apply to NRNs as well. 

Nevertheless, the Act forbids employing a foreign citizen as long as the employer can acquire a skilled manpower from amongst Nepali Citizens. Furthermore, the Act requires such employers to make arrangements for training a Nepali Citizen in the needed skills and to gradually replace foreign employed citizens by Nepali citizens. This provision can act opposite to the protection and discrimination of employees in Nepali enterprises on the basis of citizenship. Foreign Citizens of Nepali Origins are affected by the provision. 

In order to receive the protection under the Labor laws of Nepal, an NRN (Foreign Citizen of Nepali Origin) should have duly received a work permit from the Department of Labor.

NRNs can invest in Nepal either by purchasing securities of existing companies or by registering a new company in Nepal. In this respect, provisions of FITTA, Industrial Enterprises Act 2020, and Company Act 2006 are applicable. The following is the step-wise overview of legal provisions and requirements for NRNs who wish to start a business or invest in Nepal: 

Step 1: An NRN who wishes to invest in Nepal or start a business in Nepal should obtain prior approval from the Department of Industries or the Investment Board of Nepal after disclosing the timetable of injecting investment into Nepal and the working plan, as per the provisions of Industrial Enterprises Act, FITTA 2019, NRN Act 2008, NRN Rules 2009 and FITTA Rules 2021. For investment up to 6 Billion Nrs, approval should be obtained from DOI and for investment of more than 6 Billion, approval should be obtained from IBN. 

Note: An NRN wishing to start a business or invest in Nepal should bear in mind the Negative list of investments that are prohibited by foreigners in Nepal under Schedule-1 of FITTA. Similarly, the minimum floor that an investment should be of minimum Nrs. 20 Million should also be followed. 

Step 2: After approving the foreign investment from DOI/IBN, a notification should be sent to NRB. 

Step 3: Following an approval from DOI, the NRN should also obtain approval from the concerned authorities for investing in specific industries. For example, approval from Civil Aviation Authority Nepal should be obtained for investing in airlines industries. 

Step 4: The NRN should also register their business at the Industrial Department, as per the provisions of Industrial Enterprises Act. For this purpose, 

1. Businesses/industries should also be registered at the concerned local level. 
2. Any business or industry that an NRN wishes to start in Nepal should have fulfilled its Environment Impact Assessment or Initial Environmental Examination as per the provisions of Environment Protection Act 2019, and Industrial Enterprises Act 2020. The Industrial Department shall only register businesses/industries fulfilling these requirements.

Step 5: An NRN establishing a new business in Nepal should register their business should make an application to the Office of Company Registrar (OCR) in manner set forth in Section 4 of the Company Act 2006 to register the company at the OCR.

However, In respect of investments being made by an NRN in an existing company in Nepal such that the capital structure of the company changes, the existing company should notify DOI/IBN within 30 days. The NRN should also obtain a non-blacklist certificate from CIB (Credit Information Bureau).

Step 6: Following approval of investment and registration thereof, A bank account should be opened and operated by the NRN in case of investing in a new company, in the manner set forth in FITTA and NRN Act. A prior approval from NRB needs to be obtained for opening a bank account in convertible currency. Furthermore, a prior notification should be given to NRB, which should be presented before the bank in which the account is opened, for operation of the account.  

Step 7: An NRN should bring in an investment amount within one year from the date of approval in the prescribed proportion for bringing in foreign investment, in the manner prescribed in Rule 9 of FITT Rules.

Step 8: An NRN should give notice about their investment to the Ministry of Foreign Affairs as per the provisions of FITT Rules.

Step 9: Notice should be given to Nepal Rastra Bank about the investment brought into Nepal and it should be recorded thereon in the manner set forth in NRN Act,  the FITTA and the NRB's Foreign Investments and Foreign Loans Management By-laws 2078 (BS) within 6 months of bringing in foreign investment in Nepal. 

Step 10: Notice should be given to the Office of Company Registrar about commencement of business after commencing the business operation.

As per the provisions of Citizenship Act 2063, in respect of NRNs who are Foreign Citizens of Nepali Origin who had previously renounced their Nepalese Citizenship for obtaining a Foreign Citizenship can re-obtain their Nepali citizenship upon,

1. Renouncing the Foreign Citizenship, and
2. Returning back for Residing in Nepal 

Such NRNs should submit an application to the Ministry of Foreign Affairs or the concerned Chief District Officer for re-obtaining a Nepali Citizenship. They shall obtain the Citizenship of the same kind as they used to have before obtaining a Foreign Citizenship.

In respect of Foreign Citizens of Nepali Origin who themselves did not have a Nepali Citizenship but their parents/grandparents had Nepali Citizenship, 

In case of Nepali Citizens Residing Abroad, they need not re-obtain Nepalese Citizenship as they already have one. In this way,  NRNs willing to return to Nepal permanently after living abroad can enjoy the same rights and privileges as Nepalese citizens by lawfully obtaining citizenship. 

NRNs who are residing in a foreign country except member countries of SAARC after having obtained Citizenship of that country can obtain an NRN Citizenship Nepal enjoy privileges of dual citizenship., subject to following conditions: - 

1. He/She had obtained Nepali Citizenship by birth or descent in the past, or 
2. His/Her Father or Mother, Grandfather or Grandmother had obtained a Nepali CItizenship in the past.

NRNs who have obtained an NRN citizenship shall have Economic, Social and Cultural Rights in Nepal (Article 14 of the Constitution of Nepal 2015). In contrast, NRNs who have merely registered themselves as NRNs and received an NRN Identity Card have limited Rights granted under the NRN Act and other Acts applicable to them such as FITTA and National Civil Code.

For carrying out specific activities in Nepal, NRNs need to obtain necessary approval, permits or licenses from the concerned authority designed to regulate such specific sectors. Section 4 of the Non-resident Nepali Act, 2064 has mentioned about the necessary permits and license .

• A non-resident nepali intending to take an identity card shall submit an application before the prescribed authority.
• If an application is submitted , the prescribed authority may, upon making necessary inquiry, issue an identity card of non-resident nepali to the applicant upon collecting the fees as prescribed.
• The identity card issued under this act is valid for up to ten years for foreign Nepalese citizens with a visa, and up to two years for Nepalese citizens residing abroad.
• For the process of renewal, the non-resident nepali shall submit the application to the prescribed authority before the expiry of the valid date.

NRNs can apply for positions at private companies and non-governmental organizations (NGO) by obtaining a work permit from the relevant authorities. There are no restrictions of this kind for Nepali citizens who live abroad. However, they risk losing their NRN status if they decide to remain in Nepal. Additionally, in order to pursue a profession, foreign nationals of Nepali descent must adhere to the same regulations as any other foreign national. The conditions might be greatly loosened with the adoption of NRN citizenship. 

The NRN Act and NRN Rules provide that NRNs  (both Nepalese Citizens Residing Abroad as well as Foreign Citizens of Nepalese Origin) can repatriate their investment in Nepal or profits generated therefrom to their respective countries, if such investment was made following the procedure of law such as obtaining prior approval from Department of Industries or the Investment Board of Nepal, and the  notification thereof has been sent to & the investment has been duly recorded in NRB. 

The FITTA makes similar provision and enlists following payments as payments repatriable by foreign investors, including NRNs: 

1. Proceeds from sell of shares,
2. Profits or dividends received in investments,
3. Remaining amount following settlement of all liabilities upon liquidation, 
4. Royalty received for technology exchange (subject to cap set by FITT Rules), 
5. Lease rent obtained under lease investment, 
6. Compensation or damages amount received as per any court order or decisions of arbitration, mediation in Nepal
7. Other amounts repatriable as per prevailing laws of Nepal

An NRN should receive an approval from the Ministry of Foreign Affairs for repatriation of their investment or income. Repatriation should be done in the prevalent exchange rate in the same foreign currency in which the investment was done by the NRN.  However, if the NRN decides to repatriate his/her investment in a different foreign currency, another approval from NRB will be needed.

FITTA Rules has prescribed the ceiling on repatriation of royalty as follows:

Cap on Repatriable Royalty or Other Fee 

1. Cap on Royalty amount for all kinds of technology transfer or for other fee of industry

2. Cap on Royalty amount or other fee for use of Trademark only 

Besides, Income Tax Act 2058 prescribes following withholding taxes for repatriation of following income earned in Nepal : 

1. 5% for dividends 
2. 15% on interests 
3. 15% for Service fees
4. 15% for Royalties

The FITTA makes provision of National Treatment of a foreign investor in Nepal. This protects an NRN ivestor from acts by Government of Nepal in malicious intent against or prejudicial to an NRN investor in relation to their investment. Besides, the general criminal legal framework of Nepal protects NRNs from fraud and scams while conducting business or investment in Nepal. NRNs can take recourse provided under the general criminal law procedures of Nepal.

Punishment and fine as prescribed under criminal laws of Nepal. In case of NRNs who have injected foreign investment in Nepal, their foreign investment permit may be revoked if they are found to be acting in contradiction with terms and conditions of their investment’s approval/permit.