This article is all about the Notice Regarding Transfer of Foreign Currency into Nepal through Online Financial Services for E-Commerce Businesses and the recent legal provisions.
Introduction – Notice Regarding Transfer of Foreign Currency into Nepal through Online Financial Services for E-Commerce Businesses
As online platforms become predominant mediums for income, there’s a growing need for clear regulations and frameworks that ensure smooth, transparent, and legal transactions.
This article delves into Nepal’s journey in the field of online earnings, outlining the challenges faced by digital entrepreneurs in the past and highlighting the recent changes introduced by the Nepal Rastra Bank.
History of Online Earnings in Nepal
If someone is an entrepreneur or a content creator in Nepal and earns from platforms like Youtube, Instagram, Facebook, Spotify, and other online sites, the government has restricted you from directly receiving your earnings in Nepal because there were concerns about the origin and legitimacy of these transactions.
As a result, many had to rely on international payment gateways, like Western Union, to receive their online earnings.
On 17th September 2020, the Payment System Department of Nepal Rastra Bank released a groundbreaking notice. This notice has directly affected the way online earnings and e-commerce businesses can handle foreign currency transactions in Nepal.
Accepted Types of Earnings
Nepal is open to online businesses. They are giving official approval to the online businesses. The bank has now listed specific ways to earn money that they will accept:
- They approve earnings from IT-related services and products.
- Content shared on social media platforms.
- They also recognize earnings from international retail business or trading.
- When foreign currency is obtained, local banks and service providers are ready to exchange it for Nepalese Rupees.
- After the conversion, funds can be moved to digital wallets or other local payment methods.
- It’s essential to note that there are limits set by the bank for such transactions.
Guidelines for International Payments
- If there are royalties or fees to be paid to foreign entities, such as for using music from an overseas artist, they must be addressed.
- Such payments should align with the rules given by the Foreign Exchange Management Department.
Rules for Payments Abroad
- When royalties or fees are owed to international parties, for using a song from a global artist in a video, specific regulations must be followed.
- These payments need to comply with the rules set by the Foreign Exchange Management Department.
Adherence to Legal Norms
- Even with the new regulation, it’s important to remember the importance of abiding by the law.
- Online earnings should not be linked to illicit activities like money laundering or supporting terrorism.
- Following all existing laws and regulations is mandatory and should not be overlooked.
Maintaining Accurate Transaction Records
- Each month, a comprehensive transaction report needs to be submitted to the Payment System Department.
- It’s important not to miss the submission deadline, which is set at fifteen days after the end of the month.
Impact of New Regulation
In the past, there were many uncertainties regarding online transactions, making it challenging for skilled Nepalese individuals to fully participate in the worldwide digital market.
These new rules not only give legal recognition to online earnings but also actively support it. These regulations not only ignite a sense of enthusiasm among digital entrepreneurs in Nepal but also establish a transparent and lawful framework for conducting online businesses.
Nepal’s recent initiative marks a significant stride towards deeper integration into the global e-commerce and online content creation landscape.
This move offers a reassuring signal for those who were hesitant to venture into the digital arena due to prior complexities.
In a rapidly evolving digital age, it becomes imperative for nations like Nepal to evolve and expand their digital horizons.
The implementation of such guidelines and structures sets the stage for a promising future, not only for Nepalese digital entrepreneurs but also for the flourishing community of content creators.
Also Read: Business Visa in Nepal