The new policy arrangement, proposed through an amendment bill to the existing Non-Resident Nepalese Act, addresses current legal restrictions under the Foreign Exchange Act that prohibit NRNs with foreign citizenship from transferring funds from local property sales out of Nepal. Officials noted that the lack of legal avenues has previously driven capital flight through informal channels like hundi.

Key Highlights of the Proposed Bill

• Expanded Property Rights: NRN identity cardholders will gain expanded rights to own, use, and manage movable and immovable assets acquired through inheritance, purchase, or stock investments.

• 50% Tax on Property Proceeds: To sell immovable property and transfer the funds abroad, NRNs will be required to pay a revenue/tax equivalent to 50% of the total asset value.

• Unrestricted Investment Repatriation: Funds brought into Nepal as formal foreign direct investment through banking channels, along with any accrued profits, can be repatriated without hindrance (though no government subsidies or concessions will apply).

• Capital Market & Banking Access: The bill opens formal pathways for NRNs to invest in Nepal's stock market and operate local bank accounts in either Nepalese Rupees (NPR) or foreign currency.

Political Restrictions & Systemic Impact

While the proposed law grants broad financial and property privileges to encourage investment from both current and future NRN generations, it strictly limits political and administrative power: NRNs will not hold voting rights, nor will they be eligible for constitutional appointments, civil service positions, or roles within the Nepal Army and Police.

The bill is currently in its final drafting stage and is expected to be registered in Parliament shortly. Once enacted, the law is anticipated to bring significant regulatory changes to Nepal's land revenue administration and foreign exchange management systems.