Foreign investors repatriate Rs 5.72 billion in dividends From Nepal, Nearly double from last year

KATHMANDU: Foreign investors repatriated NPR 5.72 billion (5 arba 72 crore) from Nepal in the form of dividends and investment returns by the end of Falgun in the current fiscal year, marking a sharp increase compared to the previous year, according to the Economic Survey 2082/83.

The data shows a significant rise in profit repatriation by foreign investors operating in Nepal, reflecting increased returns on investment as well as capital withdrawal.

Dividend Repatriation Nearly Doubles

According to the survey, foreign investors had taken out only NPR 2.98 billion in dividends and investment returns during the same period of the previous fiscal year.

This means the amount repatriated this year has nearly doubled, indicating stronger earnings among foreign-invested enterprises and increased movement of investment income abroad.

The rise comes at a time when Nepal is attempting to attract more foreign capital to support industrial expansion, infrastructure development, tourism, technology, and manufacturing.

Foreign Direct Investment Inflow Increases

Despite the rise in profit repatriation, Nepal recorded higher inflows of Foreign Direct Investment (FDI) during the review period.

According to the Economic Survey:

• Total FDI increased by 27.9 percent
• FDI inflow reached NPR 10.84 billion by Falgun 2082
• During the same period last fiscal year, FDI stood at NPR 8.47 billion

The increase suggests improving investor interest in Nepal despite ongoing concerns related to policy implementation, bureaucratic delays, and market limitations.

Net FDI Declines Due to Higher Outflows

However, the rise in dividend payments and investment repatriation has affected Nepal’s net foreign investment position.

The survey states that net FDI declined by 6.9 percent during the period.

• Net FDI by Falgun last fiscal year: NPR 5.49 billion
• Net FDI by Falgun this fiscal year: NPR 5.11 billion

The decline indicates that while gross foreign investment entering Nepal increased, higher outbound payments to investors reduced the net gain to the economy.

Economists often view this as a sign of maturing investments, where existing foreign companies begin repatriating profits after becoming operational and profitable.

Foreign Investment Liabilities Continue to Grow

The Economic Survey also reports a rise in Nepal’s foreign direct investment liabilities, which represent the total stock of foreign investment commitments in the country.

• FDI liabilities as of Asar 2081: NPR 332.97 billion
• FDI liabilities as of Asar 2082: NPR 340.28 billion

The increase indicates continued expansion of foreign investment exposure in Nepal’s economy.

Balancing Investment Inflows and Outflows

The growing repatriation trend reflects a dual reality for Nepal’s investment climate.

On one hand, higher dividend outflows suggest that foreign businesses are generating profits and gaining confidence in extracting returns from investments. On the other hand, increasing outflows can put pressure on the balance of payments if new investment inflows do not keep pace.

Nepal has long struggled to attract large-scale foreign investment due to regulatory bottlenecks, inconsistent policy implementation, land acquisition challenges, and delays in project approvals.

However, recent policy reforms aimed at simplifying investment procedures and improving ease of doing business are expected to support future inflows.

While the rise in FDI inflows is a positive signal for Nepal’s investment climate, policymakers may increasingly focus on ensuring that foreign investment translates into domestic productivity, employment generation, technology transfer, and export growth.

The challenge ahead will be maintaining a healthy balance between attracting new capital and managing rising profit repatriation by foreign investors.