Foreign Investment (FDI Process) in Nepal
Step-by-step legal support for foreign investors under the Foreign Investment and Technology Transfer Act, 2019 (FITTA) — eligibility, approval, incorporation, and compliance.
Investing in Nepal as a Foreign Investor
Nepal’s foreign investment framework is governed primarily by the Foreign Investment and Technology Transfer Act, 2019 (FITTA), together with the Industrial Enterprises Act, 2020 and the Companies Act, 2063. Foreign investment is permitted in most sectors, subject to a minimum investment threshold, sector eligibility, and approval from the Department of Industry (DOI) or Investment Board Nepal (IBN).
A sector must satisfy two tests before foreign investment is allowed: it must be classified as an “industry” under the Industrial Enterprises Act’s positive list, and it must not appear on FITTA’s negative list of restricted sectors. Both conditions must be met — a sector left off the negative list is still closed if it isn’t recognized as an industry at all.
Registering the company itself?
Once FDI approval is granted, the company is incorporated the same way any Nepali company is — see our Company Law guide for the full OCR registration process and ongoing compliance calendar.
Ways to Invest in Nepal
FITTA recognises several modes of foreign investment. The right structure depends on your sector, capital, and whether you’re starting fresh or investing in an existing business.
Establish a New Company
A foreign investor can incorporate a new Nepali company as 100% foreign-owned in most sectors, or with local participation where required.
Joint Venture
A foreign investor partners with a Nepali individual or company to establish and run a business together.
Invest in an Existing Company
A foreign investor can acquire shares in an existing Nepali company, subject to DOI/IBN approval and (since 2025) prior approval for any onward equity transfer.
Technology Transfer
A foreign entity can transfer technology, know-how, trademarks, software or technical skills under an approved agreement — even into a company with only local investment.
Investment Requirements & Compliance
The essentials every foreign investor should confirm before committing capital.
Minimum Investment & Fees
The general minimum foreign investment threshold is NPR 20 million per investor (reduced from NPR 50 million by a 2019 government notice). There is no general upper cap, though service-sector limits may align with Nepal’s WTO commitments. Government application/processing fees apply at DOI and vary by approved capital — we confirm the current fee schedule before filing.
Automatic Route for IT
Since a 2023 Ministry of Industry, Commerce and Supplies notice, eligible IT-based industries can obtain approval through a simplified automatic route with no minimum investment threshold — a significant exception to the general NPR 20 million rule.
Documents Commonly Required
- Project report describing the proposed investment
- Foreign investor profile / passport, or incorporation documents (MOA/AOA) if the investor is a company
- Board or corporate resolution approving the investment, where required
- Evidence of financial credibility from a recognised bank
- Joint venture agreement, if applicable
Which Authority Approves?
The Department of Industry (DOI) approves foreign investment proposals up to NPR 6 billion. Proposals above that threshold go to the Investment Board Nepal (IBN). The statutory approval timeline is short, but in practice it commonly takes longer depending on sector and documentation.
Repatriation of Profits
Dividends, capital gains and the original investment can be repatriated once recorded with Nepal Rastra Bank (NRB) via an Investment Inflow Certificate, and after tax compliance. Investors generally cannot repatriate the principal investment within the first year of infusion.
Post-Investment Compliance
Ongoing duties include annual FDI progress reporting to the DOI/NRB, standard Companies Act compliance (AGM, audit, annual return), and — since a March 2025 FITTA amendment — prior DOI approval before selling or transferring equity to a domestic party (previously only a 30-day post-transaction notification was required).
FDI Approval & Investment Process
The exact procedure depends on the sector, chosen structure, and approval route. In general, foreign investors should plan for the following stages.
Check Eligibility
Confirm the sector against both the positive list (Industrial Enterprises Act) and the FITTA negative list.
Choose Structure
Select an investment structure — new company, JV, share purchase, lease financing or technology transfer.
Prepare Documents
Prepare the project report, investor documents, and financial credibility evidence.
Obtain FDI Approval
Apply to the DOI (up to NPR 6 billion) or IBN (above), or via the automatic route where eligible.
Incorporate the Company
Register the company with the Office of the Company Registrar through CAMIS.
Tax & Industry Registration
Obtain PAN, VAT (if applicable) and industry registration under the Industrial Enterprises Act.
Bring In Investment
Remit capital through an NRB-authorised banking channel and obtain the Investment Inflow Certificate.
Sector Licences
Obtain any additional sector-specific licences and approvals that apply.
Ongoing Compliance
Maintain corporate, tax, foreign-exchange and FDI-progress reporting compliance.
Sectors Restricted for Foreign Investment (Negative List)
FITTA’s schedule fully restricts foreign investment in the categories below. This list changes by gazette notification, so always confirm the current version before structuring an investment.
| Category | General FDI Position | Important Consideration |
|---|---|---|
| Primary Agro-Production | Restricted | Poultry, fisheries, bee-keeping, fruits, vegetables, oilseeds, pulses, dairy and similar primary production. |
| Cottage & Small-Scale Industry | Restricted | Reserved for domestic micro and cottage-scale enterprises. |
| Personal Service Business | Restricted | E.g. hairdressing/beauty services, tailoring, driving instruction, and similar personal services. |
| Arms, Ammunition & Explosives | Restricted | Includes NBC (nuclear, biological, chemical) weapons production and atomic/radioactive materials. |
| Real Estate Business | Restricted | The construction industry itself is treated separately and is generally open. |
| Retail Trading | Restricted / Conditional | Franchise or international-chain retail may qualify for exceptions — confirm case by case. |
| Internal Courier Service | Restricted | Domestic courier and postal-type services. |
| Certain Consultancy Services | Ownership Conditions | Legal, accounting, engineering and similar professional consultancy may carry ownership limits. |
| Mass Communication & Travel Agency | Restricted / Conditional | Domestic-language media and travel agency services carry restrictions or conditions. |
Documents Commonly Required for FDI
Project Report
Describes the proposed investment, business activities and financial expectations.
Foreign Investor Profile
Background information on the individual or corporate foreign investor.
Corporate Documents
Incorporation and constitutional documents where the investor is a company.
Board / Corporate Resolution
Corporate authorisation approving the proposed investment where required.
Financial Credibility Evidence
Documentation from an accepted banking institution or other accepted source.
Passport / Identity Documents
Identification for foreign individual investors and representatives.
Helping Foreign Investors
Enter Nepal
From global companies entering the Nepali market to individual foreign investors — we structure, file, and follow through until capital is in and the company is compliant.
Start Your InvestmentThe Shubham Law Associates Difference
Global reach meets local depth — we understand both international investor expectations and Nepal’s regulatory reality.
Cross-Border Experience
We’ve guided investors from multiple countries through DOI, IBN and NRB approvals, across sectors from IT to hydropower to manufacturing.
Structured, Not Improvised
Every engagement starts with an eligibility and structuring assessment — so you know the realistic path before you commit capital.
Current on Regulatory Change
FITTA and its regulations change by gazette notice — including recent amendments on equity transfer approval. We track these actively.
End-to-End Filing
From DOI/IBN application through OCR incorporation to the NRB investment inflow certificate — one team, one file.
Proven 5-Star Track Record
Continual 5-star client ratings earned through dedication to every client’s success, from approval through repatriation.
Compliance That Sticks
We set up the annual FDI and corporate reporting calendar so your approval stays in good standing long after incorporation.
Foreign Investment FAQs
Quick answers to the questions we hear most from foreign investors.
The general threshold is NPR 20 million per foreign investor, reduced from NPR 50 million by a 2019 government notice. Eligible IT-sector investments approved through the automatic route are exempt from this minimum.
Full foreign ownership is permitted in most eligible sectors. A local partner is not mandatory unless the sector carries ownership conditions or the activity falls on the restricted/negative list.
The Department of Industry approves proposals up to NPR 6 billion; the Investment Board Nepal handles larger proposals. Eligible IT-sector investments may also qualify for a simplified automatic route.
Yes, once the investment is recorded with Nepal Rastra Bank and tax obligations are met. The original capital generally cannot be repatriated within the first year from the date it was brought in.
Yes — since the March 2025 FITTA amendment, a foreign investor must obtain prior DOI approval before selling or transferring equity to a domestic party. Previously, notifying and registering the change within 30 days after the transaction was sufficient.
Primary agro-production, small/cottage industry, personal service businesses, arms and explosives, real estate trading, general retail, internal courier services, and a few conditional sectors like consultancy, media and travel agencies. Always confirm the current gazette list before structuring.
No — incorporation itself follows the same OCR/CAMIS process used for any Nepali company. See our Company Law in Nepal guide for that process and ongoing compliance requirements.
Bring Your Capital Into Nepal
on a Solid Legal Foundation
Speak with our FDI team to assess sector eligibility and structure your investment correctly from day one.
Legal Information Notice: The information on this page is provided for general informational purposes and does not constitute legal advice for a specific transaction, business or investment. Foreign-investment, tax, foreign-exchange and sector-specific requirements change through legislation, regulations, government notifications or administrative procedures — figures such as the minimum threshold and negative list have changed by gazette notice before and may change again. Investors should obtain advice based on the specific facts and current applicable law before taking legal or financial action.