Businesses that receive a foreign exchange (FCY) licence from Nepal Rastra Bank (NRB) have an additional compliance responsibility that is often overlooked.

Obtaining an NRB licence allows eligible businesses to conduct specified foreign exchange transactions, but the licence also comes with ongoing reporting and regulatory obligations. These obligations are separate from regular PAN, VAT, TDS, income tax and Company Registrar (OCR) compliance.

Nepal Rastra Bank’s Foreign Exchange Management Department maintains a list of licensed entities and regulates foreign exchange transactions through its applicable bylaws, circulars and reporting systems.

Who Needs to Pay Attention to This Compliance?

Foreign exchange licensing is relevant to a wide range of businesses and institutions.

Depending on the category of licence, this can include:

• Travel agencies
• Trekking agencies
• Hotels
• Cargo companies
• Airlines
• Money changers
• Remittance companies
• Casinos
• Banks and financial institutions
• Other entities authorised to conduct specified foreign exchange transactions

NRB’s published list of licensed entities includes thousands of non-bank entities, alongside banks, money changers and remittance companies.

For example, NRB’s annual reporting has specifically identified hotels, travel agencies, trekking agencies, cargo companies and airlines among entities licensed for foreign exchange transactions.

What Is the Monthly FCY Compliance?

A business holding an NRB foreign exchange licence is generally required to report its relevant foreign exchange transactions through the Foreign Exchange Licensing and Reporting System (FXOL) or through the reporting mechanism prescribed for its category.

NRB introduced FXOL to streamline reporting of foreign exchange transactions by licensed institutions. The system was initially used for entities licensed through the Foreign Exchange Management Department and was subsequently extended to entities licensed through NRB provincial offices.

This means that obtaining the licence is not the end of the process.

Licence → Foreign exchange transactions → Monthly reporting → Record keeping → NRB compliance

should be treated as an ongoing cycle.

What Needs to Be Reported?

The exact information depends on the type of foreign exchange licence and the transactions permitted under that licence.

Depending on the business, reporting may relate to:

• Foreign currency received
• Foreign currency sold or purchased
• Foreign tourists
• Foreign currency transactions related to tourism
• Card transactions
• Foreign currency payments
• Remittance transactions
• Other authorised foreign exchange transactions

The applicable NRB circular or reporting format should be followed for the particular category of licence.

This is important because a travel agency and a money changer do not necessarily have the same reporting requirements.

Is Monthly Reporting Required Even When There Is No FCY Transaction?

This is one of the areas where businesses should be careful.

A company should not simply assume that it can ignore the reporting system because it had no foreign currency transaction during a particular month.

The reporting obligation depends on the applicable licence, reporting category and NRB instructions. Where a return or report is required for the reporting period, the business should follow the applicable nil/no-transaction reporting procedure rather than simply leaving the compliance unattended.

If you are unsure whether your licence requires a nil report, it is better to verify the current reporting requirement with the relevant NRB office or compliance professional.

Monthly Compliance Is Separate From VAT and Tax Filing

This distinction is extremely important for business owners.

A travel agency, for example, may have the following compliance obligations:

Every month

• VAT return, if VAT registered
• TDS-related compliance, where applicable
• NRB foreign exchange reporting, where applicable

Periodically

• Tourism-sector half-yearly reporting
• Other regulatory reports

Annually

• OCR/company compliance
• Audit
• Income tax return
• Licence renewals and other annual regulatory requirements

Therefore, an accountant handling only VAT and TDS may not necessarily be handling the company’s NRB foreign exchange licence compliance.

Why Do Businesses Miss NRB Foreign Exchange Reporting?

There are several practical reasons.

1. The Business Has Very Few Foreign Currency Transactions

A small travel agency may receive only a handful of foreign customers in a month.

Because the transaction volume is low, management may assume the reporting requirement is insignificant.

2. The Accountant Focuses on Tax Compliance

Many businesses primarily think about:

VAT + TDS + Income Tax + OCR

and forget that an NRB licence creates an additional regulatory reporting responsibility.

3. The Licence Was Obtained Years Ago

A company may have obtained its foreign exchange licence several years ago but have changed accountants or employees since then.

As a result, the person currently handling the accounts may not know the historical NRB reporting process.

4. Records Are Not Maintained Specifically for FX Reporting

The accounting records may be sufficient for VAT and income tax but not organised in a way that makes NRB reporting straightforward.

This can create problems when preparing monthly foreign exchange reports.

Keep Records Ready Every Month

Businesses with an NRB foreign exchange licence should maintain appropriate records throughout the month rather than trying to reconstruct transactions at the end of the reporting period.

Depending on the business, records may include:

• Foreign currency receipts
• Foreign currency sales/purchases
• Customer details
• Passport-related information where applicable
• Invoices
• Foreign currency settlement records
• Bank statements
• Card transaction records
• Exchange transaction records
• Supporting documents
• Previous NRB submissions

The exact records required depend on the licence category and applicable NRB requirements.

NRB Can Inspect Licensed Entities

An NRB foreign exchange licence should not be treated as a one-time registration.

Nepal Rastra Bank has authority to regulate and supervise licensed foreign exchange entities. Its published supervisory reports describe onsite inspection, offsite supervision and enforcement activities for regulated entities.

NRB’s Foreign Exchange Management Department also maintains licensed-entity records and publishes updated lists of entities authorised to conduct foreign exchange transactions.

This is why proper records and regular reporting are important.

What Happens If Monthly Reporting Is Not Done?

Late or missing reporting can create a compliance issue with the regulator.

NRB’s supervisory reports have identified monthly reports not being submitted on time among observed compliance issues in regulated institutions.

The consequence of non-compliance depends on the type of licence, nature of the violation, applicable circulars/bylaws and the regulator’s action.

Businesses should therefore not wait until licence renewal or an inspection to discover that several months of reporting are missing.

How Much Does Monthly NRB/FCY Compliance Cost in Nepal?

The professional fee for handling this work is not a single government-fixed amount.

It depends on:

• Type of NRB licence
• Number of transactions
• Number of documents
• Whether the business has proper records
• Whether previous reports are pending
• Whether reconciliation is required
• Whether the accountant is only filing or also maintaining the underlying records

For a small travel agency, hotel or similar business with relatively simple foreign exchange transactions, an indicative professional fee could be:

These are indicative professional service fees, not fees charged by Nepal Rastra Bank.

A business with a large number of foreign exchange transactions may require a customised fee.

Can NRB Compliance Be Included in an Accounting Package?

Yes.

For businesses such as travel agencies and hotels, it can make sense to combine the different monthly compliance requirements.

For example:

Monthly Accounting & Compliance Package

Accounting

• Bookkeeping
• Bank reconciliation
• Sales and purchase records

Tax

• VAT return
• TDS compliance
• Tax-related reconciliation

NRB

• Foreign exchange transaction review
• FXOL/required monthly reporting
• Supporting record maintenance

Other Regulatory Compliance

• Tourism-sector reporting
• Licence compliance reminders
• OCR annual compliance

This gives the business owner one central compliance system instead of managing different accountants for different regulators.

Monthly FCY Compliance Checklist

Before considering the month complete, check:

• NRB foreign exchange licence is valid
• Applicable licence category has been identified
• Foreign exchange transactions for the month have been compiled
• Supporting invoices/documents are available
• Foreign currency receipts/payments have been reconciled
• Bank/card records have been checked where applicable
• FXOL or applicable NRB reporting requirement has been reviewed
• Monthly report has been submitted where required
• Submission evidence has been saved
• Outstanding previous-month reports have been checked
• Any NRB circular changes have been reviewed

Don’t Treat an NRB Licence as Just Another Certificate

For a business authorised to conduct foreign exchange transactions, the licence comes with continuing regulatory responsibilities.

A travel agency, trekking agency, hotel or other licensed entity should therefore maintain a compliance calendar covering:

NRB Foreign Exchange Reporting + VAT + TDS + OCR + Tourism Compliance + Income Tax

rather than treating each requirement separately.

The Foreign Exchange Management Department continues to issue and amend circulars, so businesses should also monitor changes to the applicable NRB framework. For example, NRB issued amendments to its foreign exchange unified circular during FY 2082/83.

Need Help With Monthly NRB Foreign Exchange Compliance?

If your business holds an NRB foreign exchange licence and you are unsure whether your monthly reporting is up to date, a compliance review can identify missing reports and help establish a regular filing system.

Professional assistance can cover:

Transaction records → Reconciliation → FXOL/required report → Submission → Compliance record

For a small business with straightforward transactions, monthly professional fees may typically start around Rs. 1,500–2,500, with higher charges where reconciliation, record preparation or overdue reporting is involved.

Disclaimer: Foreign exchange reporting requirements differ according to the licence category and applicable NRB circulars/bylaws. The current requirements should be verified with Nepal Rastra Bank before filing, particularly because NRB periodically amends its foreign exchange framework.