At a time when the inflow of remittances has surged due to the increasing number of Nepalis going for foreign employment and a strong US dollar, remittance outflow from Nepal has declined marginally in the seven months of the current fiscal year. Data published by the Nepal Rastra Bank (NRB) show remittance outflow has declined by 0.56 percent in the review period.
According to NRB, foreigners working in Nepal have sent Rs 4.01bn through official channels in the seven months of FY 2022/23 compared to Rs 4.03bn during the same period of FY 2021/22.
With more foreigners now coming to Nepal to work, the remittance outflow from the country has been increasing gradually in the past few years. Outward remittances in FY 2021/22 stood at Rs 7.67bn according to central bank data.
NRB officials say remittance going out of the country is the money sent by foreigners who came to Nepal for work after obtaining a work permit. This number does not include Indians who do not require work permits to live and work in Nepal.
As per the existing legal arrangements, foreign workers who come to work here are allowed to send 75 percent of their earnings to their home country and have to spend 25 percent of the money in Nepal.
Foreign nationals are also working in multinational companies, hydropower projects, banks, and insurance companies operating in Nepal. The number of expats is high in companies with foreign direct investments, development assistance projects, and banks with foreign investments.
Of late, there has been growth in the number of Chinese technical workers working in Nepal in hydropower and other infrastructure projects.
The decline in outward remittance in FY 2022/23, according to NRB officials, might be due to the decline in the number of people coming to Nepal for work. “There is no study on this matter,” said Prakash Kumar Shrestha, Executive Director of NRB, adding, “As of now, the size of outward remittance is not big and hence we’ve not prioritized and studied this aspect.”
NRB data show foreign nationals, except Indians, have sent around Rs 32bn in remittances to their country in the last five years. As per NRB, Rs 31.87bn were sent from FY 2017/18 to FY 2021/22.
While there is an assumption that Nepalis working in India send huge sums of money back to their country, the reality is remittance outflow to India from Nepal is much higher than what Nepal receives from the southern neighbor.
The World Bank data shows Indians working in Nepal remit home thrice the amount Nepalis remit from India. According to the World Bank’s Bilateral Remittance Matrix, Nepal received remittances worth $1.02bn from India in 2017, whereas remittance outflows from Nepal to India stood at $3.01bn.
According to the statistics of the Labor Department, there are currently 2, 316 foreign workers in Nepal. The citizens of 73 countries have come to Nepal for employment and received work permits to work in the country. The department says the majority of foreigners receiving work permits are Chinese.
The Labor Department says currently, 1,635 Chinese citizens are working in Nepal. Similarly, 94 citizens from the UK have received work permits followed by 93 citizens from the US.
Remittance Outflow from Nepal
(First Seven Months)
|2022/23||Rs 4.01 billion|
|2021/22||Rs 4.03 billion|
|2020/21||Rs 3.49 billion|
Annual Remittance Outflow from Nepal
|2021/22||Rs 7.67 billion|
|2020/21||Rs 6.01 billion|
|2019/20||Rs 5.43 billion|