On 27 January 2025, One to Watch hosted a Masterclass Session at Hotel Ambassador, Lazimpat, Kathmandu. The session, titled “A Practical Guide to Managing Overseas Revenue for IT Firms,” provided valuable insights into financial and legal aspects of managing foreign income for tech businesses in Nepal.

The event saw a participation of 30 attendees representing 23 companies. The session was designed to help IT businesses navigate foreign revenue management, taxation, compliance, and banking challenges.

Key Topics Covered

Accounting Perspective – CA Prashidhda Neupane (Partner, Shrestha and Neupane Associates)

• Foreign Revenue Challenges: Discussed common issues such as revenue recognition, exchange rate fluctuations, tax planning, and banking concerns, along with best practices to mitigate these risks.
• Taxation Aspects: Explained personal vs. business income tax rates and tax minimization strategies through deductions and proper accounting.
• VAT Considerations: Provided guidance on VAT registration for companies earning foreign revenue, highlighting cases where VAT may be 0% and how companies can benefit from input tax deductions.
• Foreign Taxation & Double Taxation: Explained how businesses can claim foreign taxes paid as deductions in Nepal and the importance of withholding tax certificates.
• Banking & Payment Gateways: Covered best practices for managing foreign currency accounts, optimizing payment gateways, and utilizing options like SWIFT transfers, Payoneer, and PayPal.
• Scenario-Based Planning: Discussed real-world examples illustrating the impact of different revenue structures on tax planning and banking considerations.

Legal Perspective – Mr. Anish Bastola (Partner, Vidhi Legal Concern)

• Regulatory Framework: Explained key laws, including the Foreign Investment and Technology Transfer Act (FITTA), Industrial Enterprise Act (IEA), and Foreign Exchange Regulation Act (FERA).
• Receiving International Revenue: Provided insights on legal requirements such as invoices, service agreements, and compliance with Nepal Rastra Bank (NRB) guidelines.
• Reinvestment of Foreign Revenue: Discussed legal provisions for reinvesting earnings abroad, approval processes from NRB, and required documentation.
• Compliance & Documentation: Stressed the importance of proper documentation, including tax clearance, audit reports, and regulatory approvals, to ensure smooth international transactions.
• International Business Structures: Provided recommendations on structuring IT firms for global expansion while staying compliant with Nepal’s legal and tax framework.

The attendees engaged in networking, discussing potential collaborations, and exploring opportunities with the NIIC 2 Fund over refreshments. The session received overwhelmingly positive feedback, with attendees appreciating the expert-led discussions and practical insights. The masterclass successfully provided a comprehensive understanding of the accounting and legal challenges faced by IT firms in managing overseas revenue. With an engaging and interactive approach, the session proved valuable for all attendees, reinforcing One to Watch’s commitment to supporting Nepal’s growing tech ecosystem.

The NIIC 2 Fund is supported by the Swiss Agency for Development and Cooperation SDC and implemented by One to Watch.