Breaking Myths: What Foreign Investors Get Wrong About Incorporating in Nepal

Starting a business in a new country can be intimidating, and Nepal is no exception. Many foreign investors have preconceived notions about incorporating in Nepal – from exaggerated bureaucracy to legal barriers – that simply aren’t true. In reality, foreign company registration in Nepal is more straightforward and investor-friendly than the myths suggest. Nepal’s government actively welcomes overseas investors, and understanding the facts can open the door to exciting opportunities. In this article, we’ll take a conversational journey through the common misconceptions (myths) foreign investors often have about registering a company in Nepal, and shed light on the reality behind each myth. By breaking these myths, you’ll gain a clearer picture of the actual process, legal framework, costs, and business climate awaiting foreign companies in Nepal. Let’s dive in!

Myth 1: “Foreigners Can’t Own 100% of a Company in Nepal”

Reality: Foreign investors can own 100% of a Nepali company in most sectors. Nepal’s laws allow full foreign ownership in the vast majority of industries. There is no general requirement to have a Nepali partner or shareholder for typical businesses. According to Nepal’s official foreign investment synopsis, “most of the sectors are open for foreign investment up to 100% ownership”. This means a foreign individual or company can be the sole owner of a Nepali company, dispelling the notion that you need a local partner to incorporate.

However, it’s true that a few specific industries are off-limits or restricted for foreign investment – but these are niche areas generally reserved for small local enterprises or national security. For example, “cottage industries” (traditional handicrafts or small family businesses) and personal services like hair salons are reserved for Nepali nationals. Similarly, sectors like arms and ammunition, explosives, and real estate trading (buying and selling land) are on the restricted list. These restrictions exist to protect small domestic businesses and sensitive sectors, not to hinder legitimate foreign investment. The good news is that virtually all major sectors – IT, manufacturing, tourism, hydropower, services, etc. – are fully open to foreign investors. As long as your business is in an allowed sector (which it most likely is), you can incorporate a Nepali company with 100% foreign ownership without any local equity requirements.

Nepal’s policy environment is actually very welcoming to foreign ownership. The law provides “national treatment” to foreign investors, meaning a company with foreign owners is treated the same as a local company under the law. There’s also a strong legal guarantee that foreign-owned assets won’t be nationalized or expropriated by the state – a protection some investors worry about needlessly. In short, the idea that you can’t fully own a company in Nepal is a myth. You can, and thousands of wholly foreign-owned companies are already operating successfully in Nepal.

Myth 2: “The Company Registration Process in Nepal Is Too Complicated”

Reality: Nepal’s incorporation process is well-defined and increasingly streamlined, especially for foreign investors. It’s understandable to imagine convoluted red tape in a developing country, but Nepal has a clear step-by-step process for company registration – even with foreign ownership. Several government agencies are involved, but each has a distinct role, and recent reforms have made them more efficient and coordinated.

When a foreign company or individual wants to register a company in Nepal, the process typically involves three key authorities:

• Department of Industry (DoI): This body approves foreign investment proposals under the Foreign Investment and Technology Transfer Act (FITTA). Essentially, you submit an application outlining your proposed business and investment. By law, the DoI must decide on foreign investment applications within 7 days of receiving a complete application. In practice it often takes about one to two weeks to get this FDI approval, which is basically the green light for your investment.

• Office of the Company Registrar (OCR): This is where you actually register the company (similar to incorporating a company in other countries). You’ll reserve a company name, submit the company’s constitutional documents (Memorandum and Articles of Association), and the OCR will issue a Certificate of Incorporation. For a typical company, once all documents are in order, the registration at OCR can be completed in as fast as a week or so.

• Nepal Rastra Bank (NRB): As the central bank, NRB monitors foreign currency coming in. After your company is incorporated, you’ll need to channel the invested funds into Nepal through a bank account and inform NRB. This ensures that later you can remit profits or capital back out with NRB’s records in place. Essentially, NRB’s approval formalizes the foreign equity injection so you have no issues repatriating funds later.

Additionally, you’ll register for tax (PAN/VAT) with the Inland Revenue Department and obtain any sector-specific licenses if needed (for example, a tourism business might need a tourism department license). While this may sound like a lot of steps, Nepal has made efforts to simplify them through a “One Stop Service Center (OSSC)” at the Department of Industry. The OSSC, established in 2019, brings together representatives from various agencies – DoI, Immigration, Tax Office, NRB, etc. – under one roof. This means a foreign investor can get investment approval, visa recommendations, tax registration, and other services in one place instead of shuttling between different offices. It’s considered “the most attractive feature” of the updated FITTA law, providing almost all needed services in one location.

Nepal is also leveraging technology to cut down complexity. An online application system for foreign investment approval (“automatic route”) was introduced in 2023, allowing investors to apply from abroad and receive preliminary approval electronically. Under this automatic route, investments up to NPR 500 million (about $4 million) in standard sectors can get instant approval online, which is a huge leap in efficiency. In summary, the process is structured and becoming increasingly investor-friendly. With the right guidance (for example, local consultants who know the ropes), foreign company registration in Nepal can be navigated without undue headache. The myth of an “impossibly complicated process” is outdated – today, you have clear guidelines, supportive institutions, and even one-stop facilitation to help you through incorporation.

Myth 3: “It Takes Forever to Incorporate a Company in Nepal”

Reality: Company incorporation in Nepal can be completed within a reasonable timeframe – often a few weeks – if your paperwork is in order. There is a perception that everything in Nepal moves slowly due to bureaucracy. While it’s true that government processes in any country can sometimes face delays, Nepal has legally mandated timelines and has sped up many procedures for business registration.

Under Nepali law, the Department of Industry is required to decide on a foreign investment application within 7 working days of submission. Practically, many foreign investors receive their approval in about one to two weeks, which is relatively quick. The subsequent company registration with the Company Registrar can be done in roughly another week’s time in straightforward cases. In fact, local entrepreneurs often register a company (without foreign investment) in as little as 4-7 days once all documents are ready. For foreigners, adding the FDI approval step means the core incorporation steps might total a few weeks.

Of course, these timelines assume you have prepared all the required documents and there are no major queries or mistakes in the application. Sometimes, delays happen if paperwork is incomplete or needs clarifications. Realistically, seasoned law firms in Nepal advise that from the initial application to having a fully operational company (including bringing in the investment money and getting all post-incorporation approvals), one should budget a few months. For instance, one legal expert notes that the overall process of registering a foreign investment in Nepal typically takes around 3 to 5 months when accounting for all stages and regulatory compliance. This longer timeline often includes things like obtaining visas, opening bank accounts, transferring funds, and any unexpected bureaucratic holdups.

However, 3-5 months is a cautious estimate. Many investors have completed the basic incorporation much faster – often within a month or so – especially with the help of local facilitators. It’s also improving year by year. Nepal’s introduction of the one-stop center and online approvals is specifically aimed at cutting down wait times. For example, the new automatic online approval for investments under NPR 500 million can give you a go-ahead almost instantly online, significantly reducing the waiting period for smaller projects.

To put things in perspective, the World Bank’s Doing Business report (2020) noted that in Nepal it took about 22.5 days and 8 procedures to start a business (this was for local SMEs, and included steps like social security registration). That’s not “forever” – a few weeks – though it was slower than in many more developed economies. Nepal has been working on these inefficiencies; for instance, merging some steps and improving online systems. So, while you shouldn’t expect “same-day incorporation” as in Singapore, the fear that setting up a company in Nepal drags on endlessly is a myth. With proper preparation, foreign investors can navigate the process in a reasonable timeframe. Patience and diligence are key, but you won’t be stuck in perpetual limbo – Nepal wants your business up and running as much as you do!

Myth 4: “You Need an Enormous Amount of Capital and It’s Too Expensive”

Reality: Nepal has moderate capital requirements for foreigners – recently lowered to encourage investment – and the overall costs of doing business can be quite affordable. Let’s break this into two parts: the minimum investment requirement and the general cost environment.

First, Nepal does have a minimum capital requirement for foreign investments, but it’s not extraordinarily high. In 2019, Nepal introduced a threshold to ensure foreign investors bring in meaningful capital. Initially it was set higher, but after feedback, the government reduced the minimum foreign investment to NPR 20 million (approximately USD $150,000). That means, in most sectors, a foreign investor must plan to invest at least ~USD $150k in their Nepali venture. For many serious business projects, this is a reasonable floor. Moreover, recent changes have made it even easier for certain types of businesses. Notably, for information technology (IT) and tech startups, the NPR 20 million minimum has been removed entirely. As of late 2023, there is no minimum investment requirement for ICT (information and communication technology) industries if you go through the automatic route. This is a huge incentive for small foreign startups in software, BPO, or other IT fields to come to Nepal with whatever capital they have. It shows that Nepal is adapting its policies to welcome even lean startups, not just big investors.

Beyond the formal minimum capital, consider the cost of doing business in Nepal. Here, investors are often pleasantly surprised. Nepal is generally a low-cost environment for operations:

• Labor costs: Wages in Nepal are significantly lower than in many other countries. The country has a young workforce (about 57% of the population is of working age) and labor is abundant and affordable. Hiring skilled employees like software developers, engineers, or support staff in Nepal can cost a fraction of what it might in Western countries or even in some other South Asian markets. This means your invested capital can go further in building your business.

• Rent and overhead: Office rents, utilities, and everyday business expenses are comparatively low. Outside of a few premium locations, you can get office space, warehouses, or manufacturing facilities at reasonable rates. Electricity and water tariffs are lower than regional averages, and Nepal has greatly improved its electricity supply in recent years (no more daily power cuts that were common a decade ago).

• Taxes and incentives: Nepal’s corporate tax rates are moderate and even preferential for certain sectors. The standard corporate income tax is 25%, which is on par with or lower than many developing countries. For priority sectors that the government wants to promote – such as renewable energy, transport infrastructure, and agriculture/manufacturing – the corporate tax is only 20%, providing a nice break for companies in those areas. The government also offers tax holidays and rebates for businesses that set up in less developed regions or special economic zones. Export-oriented industries can get cash incentives (a refund or bonus for export earnings) as well. All these incentives reduce the financial burden on foreign investors.

• No hidden equity costs: Since you can own 100%, you don’t have to dilute your ownership or profits with a mandatory local partner. That’s a cost saving in itself compared to countries that require giving up some share to locals.

It’s worth noting that while NPR 20 million (~$150k) is the minimum for most sectors, you are not required to bring it all at once. Typically, investors can bring the capital in installments and use it as the company grows. Nepal Rastra Bank rules allow phased injection of the committed capital over a period of time (often, a portion within the first year and the rest within a couple of years). This staged investment means you don’t have to park a huge sum in a Nepali bank right away without using it – you can invest as needed for your project.

In summary, the myth that Nepal requires “breaking the bank” is not true. The capital requirement has been lowered and even waived for certain startups, and operating costs in Nepal are quite competitive. Many foreign companies find that once they’re up and running, the high growth potential and low overhead in Nepal give them a great return on investment, far outweighing the initial capital they put in.

Myth 5: “Foreign Investors Have No Protection – You Can’t Repatriate Profits or Might Lose Your Assets”

Reality: Nepal provides strong legal protections for foreign investments, including the right to repatriate profits and safeguards against expropriation. Fears about not being able to take your money out of the country or the government seizing your business are understandable for any investor exploring an unfamiliar market. Fortunately, Nepal’s legal framework directly addresses these concerns to make sure foreign investors feel secure.

Firstly, repatriation of profits and capital is explicitly allowed by Nepali law. This means after you’ve set up your company and started earning profits, you are entitled to send your dividends or earnings back to your home country (or any country) in a convertible currency. The only condition is that you have to follow the proper procedure – mainly, doing business legally, paying applicable taxes, and routing the transactions through Nepal’s banking system. As long as those boxes are checked, “Repatriation of capital & profits is allowed” freely under the law. In practical terms, you would typically get a tax clearance and approval from Nepal Rastra Bank for each repatriation, but these are routine processes. Many foreign companies operating in Nepal regularly repatriate dividends every year without issues.

Secondly, Nepal offers assurance that your investment won’t be taken away. The country has a guarantee against nationalization: the current Foreign Investment law clearly states that businesses with foreign investment will not be nationalized by the government. This “no expropriation” guarantee is a fundamental protection. Nepal learned from some turbulent political periods in the past and now wants to project stability and fairness to investors. You can be confident that your factory or assets won’t suddenly be seized on a whim.

Furthermore, Nepal has entered into international agreements to protect foreign investors. It has signed Bilateral Investment Promotion and Protection Agreements (BIPAs) with several countries (including major economies like France, Germany, the UK, and others). These agreements typically ensure that investors from those countries get fair and equitable treatment, and provide mechanisms for dispute resolution or compensation if anything ever went seriously wrong. Nepal is also party to treaties to avoid double taxation (DTAs) with a dozen+ countries, ensuring that foreign investors don’t get taxed twice on the same income. While these treaties may sound technical, their existence is a sign that Nepal is plugged into global norms of investment protection.

Another point of protection: as mentioned earlier, Nepal follows a “national treatment” principle. Once you’ve invested and established your company, it will be treated as a Nepali company in the eyes of the law. You get the same benefits, rights, and obligations as any domestic company. This means access to local courts, eligibility for government incentives, and equal application of laws – no discriminatory practices against foreign-owned firms.

Lastly, consider dispute resolution. Nepal’s legal system allows arbitration and recognizes foreign arbitral awards under the New York Convention. So, if you ever had a contractual dispute, there are avenues to resolve it fairly. That said, many investors report that by following regulations and maintaining good governance, they rarely face serious legal conflicts.

In essence, the risks of being unable to retrieve your money or having your business unfairly taken away are minimal in Nepal’s current investment climate. The laws are quite investor-friendly on these fronts. As with any country, it’s wise to comply fully with local regulations and keep proper documentation so that you can exercise your rights without hassle. But the myth that foreign investors are unprotected in Nepal is not grounded in the reality of Nepal’s legal protections and international commitments.

Myth 6: “Nepal’s Business Environment Is Too Challenging (Poor Infrastructure, Political Instability, No Talent, etc.)”

Reality: Nepal’s business climate has been steadily improving – infrastructure is developing, the political environment is stable in recent years, and there’s a growing pool of talent and opportunities. Let’s tackle these one by one:

• Ease of doing business improvements: Nepal has made significant reforms to make doing business easier, and it’s been reflected in international rankings. In 2019, Nepal jumped 16 places in the World Bank’s Ease of Doing Business index – reaching an all-time best rank of 94th out of 190 countries in 2020. This leap was achieved by making regulatory changes such as simplifying trade processes and strengthening credit information systems. While Nepal still had room to improve (for example, in 2020 it was ranked 135th in the sub-index for starting a business, the trend is positive. The government has been actively identifying pain points for businesses and addressing them. They merged procedures, introduced online systems, and updated laws. This shows a clear commitment to improving the business environment year over year.

• Infrastructure: Nepal, as a developing country, does face infrastructure challenges, but it’s rapidly overcoming them. One major turnaround has been in electricity. A decade ago, Nepal suffered daily power outages (load-shedding) – a nightmare for any business. Today, that’s largely a thing of the past. Thanks to new hydropower projects and improved power management (with cooperation from foreign investors and companies), power generation and supply in Nepal have been greatly improved, aiming for reliable 24/7 electricity access nationwide by 2024. In fact, Nepal is on the path to becoming a net electricity exporter in the region due to its booming hydropower sector. What about roads and connectivity? The country has been investing in highways, airports, and trade infrastructure (like integrated check posts on the Indian border to speed up customs). Internet and telecom connectivity have also expanded – Nepal has widespread 4G mobile coverage and increasing broadband access even in smaller cities. While logistics in some hilly areas can still be tough, most urban centers have the amenities and services needed for modern business operations. Many foreign companies successfully operate factories, IT parks, and offices in Nepal’s industrial corridors and tech hubs.

• Political environment: Nepal’s political history is indeed complex, but since the new Constitution in 2015 and subsequent elections, the country has enjoyed a relatively stable governance period. Changes in government still happen (as in any democracy), but all major political parties today share a common goal of economic growth and attracting investment. There is broad political consensus on welcoming foreign investment as a catalyst for development. The government regularly hosts investment summits and outwardly courts international investors. For example, the Nepal Investment Summit 2019 saw around $17.5 billion worth of investment pledges made, and in 2024 Nepal held another Investment Summit to showcase new opportunities. These events signal that, regardless of who is in power, Nepal sees foreign investors as partners in progress. Of course, no country can guarantee zero political risk, but Nepal has built legal safeguards (like those mentioned earlier) to insulate investors from political ups and downs. The day-to-day business environment is more concerned with practical issues like getting permits and infrastructure, where improvements are steadily being made.

• Talent and workforce: Nepal’s population is young, energetic, and increasingly skilled. Each year, Nepali universities and institutes churn out engineers, IT graduates, business managers, and more. The country is known for its adaptive and trainable workforce. Many Nepalis gain experience abroad (in India, the Middle East, etc.) and bring those skills home. As a result, foreign companies setting up in Nepal often find a pool of eager talent, especially in sectors like tech, services, tourism, and light manufacturing. The labor cost advantage we discussed doesn’t come at the expense of quality – you can hire and train capable staff locally. And if you need to bring in a few expatriate experts or managers, that’s easy too: Nepal provides work visas and permits for foreign workers to fill specialized roles. English is fairly widely spoken in the business community, and many Nepali professionals are used to international work culture.

• Business support and ecosystem: Beyond government facilitation, Nepal has a growing ecosystem of business support. There are consulting firms (like the one we’ll discuss below), law and accounting firms experienced in FDI, and industry associations that assist new investors. You won’t be navigating the landscape alone. Moreover, Nepal’s location is strategic – it borders India and China, two giant markets, and has duty-free access to India for many products and preferential trade access to the EU. By incorporating in Nepal, you not only tap into the local market of ~30 million people, but you can also leverage Nepal as a base to service neighboring markets or regional export destinations.

In short, Nepal’s business climate in 2025 is not the wild frontier some imagine it to be. Many of the old hurdles have been lowered: the lights stay on, the internet works, the laws are updated, and the government is eager to help investors succeed. Challenges remain (bureaucracy isn’t eliminated overnight, and infrastructure development is ongoing), but the environment is continuously improving. The key is to partner with the right local experts and approach Nepal with a willingness to learn the local ways. If you do that, you’ll find Nepal to be a land of unique opportunities – from hydropower to tourism to tech outsourcing – with a supportive backdrop for foreign businesses.

Digital Consulting Ventures: Your Partner for Incorporation in Nepal

Entering a new market is much easier when you have a reliable local partner by your side. Digital Consulting Ventures (DCV) is a leading Nepal-based consultancy that specializes in helping foreign companies incorporate and thrive in Nepal’s market. As the myths above have been busted, the next practical step for a foreign investor is often, “Who can guide me through this process?” – and that’s where Digital Consulting Ventures comes in.

Why choose Digital Consulting Ventures for your Nepal entry? Here are a few compelling reasons:

• Expertise in Foreign Incorporation: Digital Consulting Ventures has a team experienced in Nepal’s company registration and FDI approval processes. They have navigated the Department of Industry procedures, liaised with the Company Registrar, and coordinated with Nepal Rastra Bank for numerous clients. This means they know the paperwork, the timelines, and the common pitfalls – so you don’t have to learn the hard way. From preparing your project proposal for investment approval to drafting a solid Memorandum and Articles of Association for your new company, DCV’s experts will handle the heavy lifting.

• Smooth Handling of Bureaucracy: The value of having someone who speaks the language (literally and figuratively) cannot be overstated. DCV will represent you in dealings with government offices, saving you from the hassle of multiple visits and follow-ups. They keep track of your application progress and resolve any queries the officials might have. Essentially, they act as your local registration concierge, ensuring that steps happen in the right order and with the right documentation.

• Local Network and Insights: Digital Consulting Ventures is well-connected in the Nepali business community. Need a good local lawyer for a specific compliance question? DCV can connect you. Looking to open a bank account and not sure which bank suits foreign businesses? They have insights. Their network extends to government agencies, legal and accounting professionals, and even talent pools for hiring. These connections can accelerate your setup and help you hit the ground running.

• Comprehensive Business Support: Incorporating the company is just the first step. DCV goes further by offering post-incorporation support. This can include helping you obtain tax registrations (PAN/VAT), setting up accounting systems, and even recruiting staff. In fact, Digital Consulting Ventures has expertise in outsourcing and staffing solutions, meaning they can assist if you plan to hire local talent or set up an offshore team in Nepal. They essentially provide a “plug-and-play” solution for foreign companies – taking care of formalities so you can focus on your core business.

• Strategic Advisory: Beyond the paperwork, DCV can advise on business strategy in Nepal. They understand market dynamics, consumer behavior, and regulatory nuances. If you’re unsure about which business structure to choose (branch office vs. subsidiary, for instance) or how to optimize your investment to benefit from tax incentives, their consultants can give you informed advice tailored to Nepal’s context. This kind of guidance can save you money and time by doing things right from the start.

Digital Consulting Ventures has built a reputation as the go-to firm for foreign investors largely because of their track record. They’ve helped companies from various countries establish in Nepal – whether it’s a tech startup looking to leverage Nepal’s IT talent, a manufacturing firm setting up a production unit, or an NGO opening a local office. With DCV, you get peace of mind that professionals are steering your incorporation process. This allows you, as an investor, to stay focused on your bigger picture strategy rather than getting bogged down in administrative processes.

In essence, if you’re considering registering a foreign company in Nepal, partnering with Digital Consulting Ventures can make the journey smooth and hassle-free. They’ll be your trusted local ally, ensuring you not only avoid the common pitfalls that foreign investors worry about but also take advantage of all the benefits and opportunities Nepal has to offer.

FAQ: Foreign Company Registration in Nepal

To wrap up, here is an FAQ section addressing some of the most common questions and concerns foreign companies have about incorporating in Nepal:

• Q: Can a foreign investor own 100% of a Nepali company?
  A: Yes. In most sectors, foreign investors can own 100% of the company’s equity – no local partner is required. Only a few sectors (like cottage industries, arms production, etc.) are barred or restricted for foreigners. If your business is in a normal industry (IT, trading, manufacturing, etc.), you can fully own the Nepali company.

• Q: What is the minimum capital required to register a foreign company in Nepal?
  A: Generally, the minimum investment is NPR 20 million (around USD $150,000) as per government rules. This applies per foreign investor for most industries. However, the government has removed the minimum threshold for information technology (IT) and tech-based ventures – so tech startups can invest less than that with approval. The minimum capital policy could further evolve, but as of now plan for roughly $150k unless you’re in an exempt category.

• Q: How long does it take to incorporate a company in Nepal as a foreigner?
  A: With proper preparation, the core steps (approval and company registration) can be completed in a matter of weeks (2–4 weeks is common). Legally, investment approval should be given within 7 days of application, and company registration can be done in about a week thereafter. Of course, additional time might be needed to open bank accounts, inject capital, and get all ancillary registrations. It’s wise to expect a few weeks to a couple of months total to be fully set up. Working with a local firm can significantly speed up the process.

• Q: Do I have to be physically present in Nepal to register the company?
  A: Not necessarily for the entire process. You can handle many steps via a local proxy or consultant with a power of attorney. Nepal now even allows online submission for initial approvals, which can be done from abroad. That said, you or a representative will eventually need to be in Nepal for certain tasks like opening a bank account (most banks require the signatory’s physical presence at least once). Many investors choose to visit Nepal during the incorporation to meet partners and officials, but if that’s not possible, a trusted local agent like Digital Consulting Ventures can represent you through most procedures.

• Q: Can I repatriate profits and dividends out of Nepal easily?
  A: Yes, Nepal’s law allows full repatriation of profits, dividends, and even the principal capital when you sell off or liquidate, in any convertible currency. The key is to follow the formal process: register the investment with Nepal Rastra Bank when you bring it in, conduct business legally, and pay applicable taxes. When you want to send money out (profits, dividends, royalties, etc.), you apply to the central bank with proof (e.g. audited accounts, tax clearance) and they will approve the outward remittance. Foreign companies routinely remit profits every year.

• Q: Will I get a visa to stay in Nepal as an investor or to manage the company?
  A: Yes, Nepal provides investor visas. Once your company (with foreign investment) is established, you can get a Business Visa for yourself (the investor) and your dependents. Business visas are typically one year multiple-entry visas, renewable as long as you maintain the investment Moreover, if you invest a substantial amount (the government has in the past used USD $100,000 as a benchmark), you may qualify for a Residential Visa– which is a long-term visa granted to significant investors and their families. Separately, if you hire foreign experts to work in Nepal, they can obtain work permits and non-tourist visas too. In summary, Nepal makes it straightforward for foreign investors and key personnel to live and work in the country legally.

• Q: Are there any sectors where foreign investment is not allowed or limited?
  A: Yes, a few sectors are closed or restricted to protect local interests. These include small-scale businesses like cottage industries (traditional handcrafted goods), personal services (e.g., barbershops, beauty salons), and primary agriculture in small farms. Sensitive areas like defense (arms, ammunition, explosives) and currency printing are also off-limits. Retail trading is restricted unless it’s an international franchise or large chain. Other than these exceptions, almost all sectors – from tourism and hotels to energy projects, IT, finance, manufacturing, etc. – are open to up to 100% foreign investment. Always check the latest “Negative List” of industries before investing, but most typical business activities will be permissible.

• Q: What are the ongoing compliance requirements for a foreign company in Nepal?
  A: Once your company is set up, it operates much like any Nepali company. Key ongoing requirements include annual financial audits, paying annual renewal fees to the Company Registrar, filing tax returns (VAT monthly/quarterly, income tax annually), and any sector-specific reporting. If you have expat staff, you’ll renew their work permits and visas as needed. You’ll also need to report to Nepal Rastra Bank when you repatriate profits or if you bring in additional investment. Many companies hire local accountants or consulting firms to handle these compliances. It’s manageable, but you can’t “set and forget” – staying compliant is important to avoid fines. Digital Consulting Ventures and similar firms offer retainer services to help with ongoing compliance for foreign businesses.

Hopefully, these FAQs address some of the burning questions you had. If you have more queries, feel free to reach out to experts or forums – and remember, misinformation is often the biggest hurdle. Now that the myths are cleared up, you can approach foreign company registration in Nepal with clarity and confidence.