Forex trading is becoming popular in Nepal, especially among young people who want to earn money online and learn about global financial markets. Many beginners are curious about forex trading but are confused about how it works and whether it is legal or illegal in Nepal.
There is a lot of misinformation on social media about forex trading, which often leads people to scams or legal problems. Because of this, it is very important to understand the rules, risks, and legal ways before starting forex trading in Nepal.
In this article, we will explain what forex trading is, whether forex trading is legal or illegal in Nepal, and what legal options are available for beginners.
Table of Contents
What is Forex Trading?
Forex trading is currency pair trading where we trade one currency against another currency. For example, Euro against the US Dollar (EUR/USD), Australian Dollar against US Dollar (AUD/USD), and US Dollar against Japanese Yen (USD/JPY), etc.
In forex trading, we try to make profit from the price movement of currency pairs. If the value of one currency increases against another, traders can earn profit by buying or selling those currency pairs.
Forex Trading in Nepal: Legal or illegal?
Many people ask this question: Is forex trading legal in Nepal?
The simple answer is that forex trading is illegal in Nepal according to the Nepal Government and Nepal Rastra Bank (NRB). Nepal government directly says that currency trading is not allowed.
In Nepal, we are not allowed to freely trade foreign currencies like US dollars. We also have a limit on how much dollar we can spend or use in a year. Because of this restriction, direct forex trading using international brokers is not permitted.
According to NRB rules, Nepalese citizens are not allowed to:
- Open foreign trading accounts in their own name
- Deposit dollars into forex broker accounts
- Trade currency pairs directly from Nepal
It’s completely illegal to load dollar in forex broker account and start trading in currency pairs. But that does not mean the journey ends here. We don’t have to stop completely. There are a few legal ways through which we can trade or learn forex while staying in Nepal, without breaking any rules.
Legal way to do Forex Trading in Nepal
1. Trading Through Prop Firms
One legal way is trading through prop firms like Funding Pips, FundedNext, FTMO, etc.
Prop firms provide demo trading accounts, not real-money accounts. To get these accounts, we pay a small fee. For example, in Funding Pips, we can get a $5,000 account by paying around $36. This account is a demo account with some rules and limitations.
We trade on this demo account, and if we pass all the phases and follow their rules, the prop firm allows us to trade and share profits. The important thing is that we are not depositing dollars into a broker, so this method is considered legal in Nepal.
If we make a profit, we can withdraw that profit directly into our Nepalese bank account. We have to sign a company contract as a worker of this prop firm company, and they send our profit through remittance.
2. Trading Using a Relative’s Account Abroad
Another way is opening a forex broker account in the name of a relative who is living in a foreign country where forex trading is legal.
In many countries, forex trading is completely legal. If our relative opens a trading account there, we can trade currency pairs using that account.
If we make a profit, there are different ways to bring that money into Nepal, such as throughlegal remittance services. This method is commonly used, but it should always follow proper legal and banking rules.
Conclusion
Forex trading in Nepal is not allowed directly due to NRB rules and government regulations. However, Nepalese traders still have some legal options, like trading through prop firms or using accounts from countries where forex trading is legal.
For beginners, it is very important to understand the rules, risks, and legal conditions before starting forex trading. Always focus on learning first, avoid scams, and never risk money that you cannot afford to lose.
In our next blog, we will discuss how to learn forex trading and how to start trading with a prop firm. Stay tuned….
You might like these articles
