Company Registration in Nepal: What’s New in 2025?

Nepal is emerging as a promising destination for international business expansion. Foreign company registration in Nepal has become more accessible and attractive in 2025 due to significant reforms. The government has updated laws, streamlined digital registration systems, and rolled out new incentives to encourage foreign investment. This comprehensive guide provides up-to-date information on registering a company in Nepal as a foreign entity, covering legal updates, compliance requirements, taxation, incentives, and practical steps. By understanding the latest regulations and opportunities, foreign investors can confidently navigate Nepal’s business landscape and seize the advantages of incorporating in this fast-evolving market.

Nepal’s Evolving Business Landscape in 2025

Nepal’s economy is recovering steadily post-pandemic, with projected GDP growth around 5% in 2025 driven by services, tourism, hydropower, and IT. The government is modernizing policies to attract FDI – updating laws like the Foreign Investment and Technology Transfer Act and Industrial Enterprises Act – to make the business climate more investor-friendly. Positioned between India and China, Nepal offers strategic market access and a growing emphasis on digital sectors (IT, BPO, clean energy) presents new opportunities. While bureaucratic challenges persist, reforms are gradually improving the ease of doing business. The stage is set in 2025 for foreign companies to benefit from Nepal’s low labor costs, improving infrastructure, and a government keen on economic growth through investment.

Key Regulatory Updates in 2025

Several new laws and amendments came into effect in late 2024 and early 2025 that directly impact foreign company registration and operation in Nepal. Below are some of the most important updates:

• Lower FDI Capital Threshold: As of 2025, the minimum paid-in capital required for a foreign-owned company has been reduced to NPR 20 million (around USD $150,000). This threshold was lowered from NPR 50 million to encourage small and medium-sized foreign ventures. Notably, information technology startups are now exempt from the NPR 20 million minimum if they use the new automatic approval route, removing a major barrier for foreign tech entrepreneurs.

• Automatic Approval for Key Sectors: In late 2023, Nepal introduced an “automatic route” for FDI approval. Foreign investors in seven sectors – energy, agriculture/forestry, infrastructure, tourism, information technology, services, and manufacturing – can obtain rapid, online approval for investments up to NPR 500 million (≈USD $3.7 million) without lengthy case-by-case review. Under this system, applications are made through an online one-stop portal and eligible projects receive instant or expedited pre-approval. This fast-track mechanism greatly cuts down approval times for modest-sized projects, which previously could take weeks under manual review.

• Digital One-Stop Services: Nepal’s company registration process is increasingly digital. The Office of the Company Registrar (OCR) now offers online name reservation and company incorporation filings, and the Department of Industry’s One Stop Service Center supports electronic submission of FDI approval applications. Foreign investors can initiate many steps remotely via these platforms, reducing the need to be physically present. For example, a proposed company name can be reserved online in advance. These digital services have cut down paperwork and government office visits, though full nationwide adoption is still in progress.

• Amendments to Company Law: Recent changes to the Companies Act, implemented in 2025, allow more flexibility in financing and corporate governance. Companies are now allowed to issue shares for non-cash contributions (e.g. intellectual property or technical know-how) with proper valuation and approval. The law also introduced employee stock ownership plans (ESOPs) so that employees can obtain shares in their company, a move to help firms attract talent. Additionally, an amnesty program grants 90% reduction in fines for companies that submit any overdue filings by July 2025. These updates enable foreign parent companies to contribute technology or intangible assets as equity and facilitate startups in incentivizing staff with shares.

• Foreign Investment and Exchange Reforms: An ordinance in early 2025 amended the Foreign Investment and Technology Transfer Act (FITTA) and related laws to streamline foreign investment processes. One big improvement is the faster repatriation approval: requests to remit profits or dividends abroad must now be decided by the Department of Industry within 7 days (down from 15 days), and any appeal resolved within 15 days. Moreover, the requirement for a separate central bank (NRB) recommendation for currency convertibility was removed, so once DOI approves repatriation, companies can directly convert NPR to USD (or other currency) and transfer funds through banks. The FITTA amendments also broadened the scope of what counts as “technology transfer” agreements – now management contracts, IT services, market research, and engineering support are included, not just patents or trademarks. Nepalese companies are even allowed (with NRB permission) to invest abroad using foreign currency earnings from approved technology transfer agreements, a step that encourages international partnerships. The ordinance also permits foreign investors to invest in Specialized Investment Funds (such as venture capital or private equity funds in Nepal) and repatriate the proceeds more easily – after Securities Board (SEBON) approval, no separate NRB approval is required to remit returns. Furthermore, Nepalese companies can now obtain project financing from foreign financial institutions by mortgaging local assets with NRB approval, expanding access to international capital.

These regulatory updates collectively improve the climate for foreign businesses. The emphasis is on speed, transparency, and investor protection. For example, Nepal also updated its Arbitration Act to expedite enforcement of arbitral awards and removed “public interest” as a vague ground to overturn awards, giving investors more confidence in contract enforcement. Overall, the reforms of 2025 signal that Nepal is actively welcoming foreign companies and addressing past procedural hurdles.

Step-by-Step: Foreign Company Registration Process in Nepal

Registering a foreign-owned company in Nepal involves a series of steps with different government bodies. In 2025, the process has become more streamlined thanks to digital services and clearer guidelines. Below is a step-by-step breakdown:

1. Investment Approval (FDI Clearance): Before incorporating, foreign investors must obtain approval under FITTA. This entails submitting an application to the Department of Industry (DOI) or the Investment Board Nepal (IBN), depending on the scale of the project. Generally, if the planned investment is below NPR 6 billion and in a permitted sector, the DOI handles approval. Larger projects above NPR 6 billion (around USD $45 million) are overseen by IBN, which provides one-stop facilitation for big investors. The DOI’s Foreign Investment One Stop Service Centre in Kathmandu accepts applications and coordinates various approvals in one place.

• Documents Required: The application must include a business plan, the investor’s identity/incorporation documents, financial credentials (e.g. past financial statements), and any sector-specific project details. The DOI scrutinizes the proposal to ensure it aligns with Nepal’s policies and isn’t in a banned sector (Nepal maintains a Negative List of industries closed to FDI, such as small cottage industries, personal services, arms production, etc).

• Timeline: Under normal circumstances, DOI approvals have taken around 30 days (sometimes up to 45 days) for standard cases. However, with the new automatic approval route for certain sectors, many small and medium investments can get approval much faster – in some cases within a few days online if they meet the criteria. IBN approvals for large projects might take 6–8 weeks given the scale and due diligence involved. As of 2025, the government is pushing to expedite all FDI approvals.

2. Company Incorporation with OCR: Once FDI approval is obtained (or concurrently, for name reservation), the next step is to register the company with the Office of the Company Registrar. The new entity will be a Nepali company (typically a Private Limited Company for most investors). Nepal allows 100% foreign shareholding in the company as long as the sector is open to FDI – no local partner is legally required.

• Name Reservation: The process begins by reserving a unique company name. This can now be done online via the OCR’s portal. The name must not duplicate or closely resemble existing companies. Name approval usually takes a few days once submitted. In practice, foreign investors often secure name approval in advance to avoid delays.

• Documentation: To register, promoters must prepare the Memorandum of Association (MoA) and Articles of Association (AoA) of the company, outlining its business objectives, share structure, and internal rules. Standard templates (in Nepali) are available for guidance. These documents need to be signed by all shareholders. Other required documents include: a completed application form (with a nominal registration stamp fee), passport copies of all foreign shareholders (notarized), and if any shareholder is a foreign company, a copy of that company’s incorporation certificate and board resolution authorizing the Nepal investment. If it’s a joint venture with a Nepali partner, a notarized joint venture agreement is also submitted. All foreign-language documents should be translated into English or Nepali and notarized.

• Share Capital & Fees: Nepal does not prescribe a minimum paid-up capital for a private limited company (aside from the FDI minimum of NPR 20 million). Authorized capital can be set based on the investment size. The government charges a registration fee based on the authorized capital (on a sliding scale); for moderate capital companies this fee might range from a few hundred to a few thousand US dollars in NPR equivalent. After submission of all documents, the Registrar reviews the application. If everything is in order, the OCR issues a Certificate of Incorporation (registration certificate) and the company is officially formed. Thanks to the digitization of filings, incorporation can be completed in as little as one business day once the name is approved and documents verified. In more typical scenarios, foreign companies are incorporated within about one to two weeks from application.

3. Post-Incorporation Tasks: With the company legally established, a few additional steps prepare you to start business:

• Industry Registration & PAN: Register the company as an “industry” with the DOI (for an industry license if required) and obtain a Tax Registration (Permanent Account Number) from the Inland Revenue Office. If the company will make local sales, also register for VAT. The One Stop Service Centre can facilitate these registrations.

• Capital Remittance: Remit the pledged foreign investment into Nepal through the banking system and obtain a confirmation letter from Nepal Rastra Bank recording the capital. This documentation secures your rights to future profit repatriation.

• Business Licenses: Apply for any sector-specific operating licenses needed (for example, tourism, banking, or telecom licenses) before commencing operations. Some industries may require additional permits from relevant ministries or regulators.

• Hiring & HR Compliance: Recruit local employees in line with Nepali labor laws (issue proper contracts, register them for social security). Arrange work permits for any foreign staff your company will employ, and ensure compliance with minimum wage and workplace regulations.

• Office Setup: Establish a local office address (required for all companies). Foreign companies typically rent office space or facilities, as direct land ownership by foreign entities is generally restricted. Ensure utilities and local municipal registrations (if needed) are in place.

At this stage, the new company is ready to commence operations in Nepal. It is advisable to engage a local legal or accounting firm during setup to handle filings and liaison with government offices. The good news is that compared to a few years ago, incorporating in Nepal is now more straightforward: many steps are online, and regulators are more responsive. Still, patience and diligence are required, especially for obtaining various clearances. By following the above steps and using the one-stop facilitation services, foreign investors can navigate the registration process with relative ease.

Taxation for Foreign Companies in Nepal

Understanding the tax regime is crucial when setting up a business in Nepal. The tax system in 2025 offers a mix of standard rates and special incentives aimed at attracting investment:

Corporate Income Tax: The general corporate tax rate in Nepal is a flat 25% of net profits. This applies to most industries (trading, manufacturing, services). Certain sectors have higher rates – for example, banks, financial institutions, insurance companies, and telecom operators are taxed at 30%. Some priority sectors enjoy slightly lower rates; for instance, earnings from exports or businesses classified as “special industries” (under the Industrial Enterprise Act) may qualify for a 20% rate or other rebates. Notably, any branch of a foreign company operating in Nepal is taxed at the same rate as domestic companies (25%), and branch profits remitted abroad incur a 5% tax (treated similarly to dividends).

Dividend and Withholding Taxes: When a Nepali company distributes dividends to foreign shareholders, a 5% withholding tax is applied. This is a final tax on the dividend in Nepal. Nepal’s tax treaties with various countries can reduce this rate in some cases, but 5% is the standard domestic rate (which is quite low by international comparison). Other payments leaving Nepal are subject to withholding tax as well: interest paid to foreign lenders is typically taxed at 15%, and royalties or technical service fees paid to foreign entities are also usually at 15%. These withheld taxes are usually considered final taxes on that income in Nepal, and the foreign recipient might claim a credit in their home country if a tax treaty exists.

Value Added Tax (VAT): Nepal levies a 13% VAT on the sale of most goods and services. Companies crossing a certain turnover threshold (currently NPR 5 million annually) must register for VAT. For a foreign company’s local operations, this means you charge 13% VAT on sales in Nepal and can claim input VAT credits on business purchases. Exported goods/services are zero-rated (0% VAT) and VAT on inputs for exports can be refunded. Compliance involves filing VAT returns (monthly or bi-monthly) and maintaining proper invoices. In recent years, the government has been streamlining VAT administration – for example, making VAT refund processing for exporters faster and introducing online return filings – to reduce burdens on businesses.

Nepal also imposes other taxes like custom duties and excise on certain goods, but those depend on the nature of your business (e.g. import-heavy businesses will face import duties, though there are duty exemptions for certain industries). Personal income tax is progressive up to 36% for high earners, but that mostly affects local staff salaries (foreign employees on Nepal payroll are also subject to it).

Also, numerous tax incentives are available – for instance, new industries in priority sectors can enjoy multiyear tax holidays and custom duty exemptions. Compliance with tax rules is critical: companies must file an annual income tax return and pay any taxes by the due date (within 3 months of fiscal year end, typically). Timely payment of taxes and accurate filings are important not just legally, but also because proof of tax clearance is needed for profit repatriation. On the upside, Nepal’s corporate tax rates and dividend taxes are relatively investor-friendly (e.g. 5% on dividends), and generous tax holidays (discussed later) can effectively reduce the tax burden in the initial years of operation.

Auditing and Compliance Requirements

All companies in Nepal, including foreign-owned ones, are subject to ongoing compliance and reporting obligations. These ensure transparency and protect investors, while also being necessary steps for things like dividend repatriation.

Annual Financial Statements and Audit: Every company must prepare annual financial statements (following Nepal Financial Reporting Standards, which align with IFRS) and have them audited by a licensed Chartered Accountant. Even private companies with 100% foreign ownership are required to undergo an independent audit each fiscal year – there are no exemptions based on size. The auditor’s report and the audited statements need to be presented to shareholders in an Annual General Meeting (AGM) within 6 months of fiscal year end. For most companies, Nepal’s fiscal year runs mid-July to mid-July. The audit report, along with annual returns, must then be filed with the Office of the Company Registrar. Notably, in 2025 the government offered a one-time amnesty on fines for late filings – companies that had fallen behind could submit overdue financials by July 16, 2025 with 90% of late fees waived. This was part of the effort to improve compliance and clean up company records.

Annual General Meeting and Annual Return: The AGM of shareholders (which, for a wholly foreign-owned company, may just be a meeting of the foreign parent or its representatives) is required annually to approve accounts and make key decisions like appointing auditors. After holding the AGM and approving the financial statements, the company files an annual return with the Registrar, updating any changes in directors, shareholders, or capital. Major changes during the year (e.g. a change in company address, an increase in capital, or a transfer of shares) should be reported to the Company Registrar within 30 days of the change. Many of these filings can now be done online, making it easier to stay up to date.

Maintaining good standing through these compliance activities is very important. Aside from legal penalties, non-compliance can hinder your ability to expand the business or remit profits. For example, Nepal Rastra Bank and the Department of Industry will ask for the latest audit reports and tax clearance certificates when you request approvals for sending money abroad. Regular compliance also builds credibility with authorities and banking institutions in Nepal, smoothing business operations in general.

Repatriation of Profits and Capital

One of the common concerns for foreign investors is the ability to remit profits and capital out of Nepal. The good news is that Nepal’s laws explicitly allow repatriation of dividends, profits, and the proceeds from sale or liquidation of the company, provided all requirements are met. Moreover, recent reforms have simplified and accelerated the repatriation process.

After your company earns profits and pays applicable taxes, you may declare a dividend to foreign shareholders. To remit this dividend in foreign currency, you need to apply to the Department of Industry (or IBN for larger projects) for repatriation approval. Typically, you must submit your audited financial statements showing the profit, a board resolution declaring the dividend, a tax clearance certificate from the tax office (proving all taxes on those profits are paid), and details of the recipient shareholders and amounts. Under previous rules, obtaining this approval could take a couple of weeks. In 2025, however, the timeline has been cut to 7 days for DOI to decide on a repatriation application. If there’s an issue, and you appeal to the ministry, that must be decided within 15 days. This faster turnaround greatly improves cash flow planning for investors.

Similarly, if a foreign investor sells their stake in a Nepali company, they are entitled to repatriate the sale proceeds. Approval is required in that case as well, along with evidence that any capital gains tax (if applicable) has been paid. Nepal’s Foreign Investment law now expressly allows the transfer of investment to another party with approval, which covers share sales.

Procedural note: All repatriations are done via the banking system. Once you have the DOI approval, a commercial bank (authorized for foreign exchange) will process the transfer abroad. The central bank no longer requires a separate step for convertibility – DOI’s approval suffices for the bank to convert Nepali rupees to your desired foreign currency. Generally, you will convert at the market exchange rate on the day of transfer. It’s crucial that the initial investment was properly recorded with Nepal Rastra Bank when it came in; the bank will verify the amount you are taking out does not exceed what came in plus any earned profits.

In summary, Nepal’s foreign exchange regulations ensure you can remit profits, capital gains, loan repayments, and royalties – provided you obtain the necessary approvals and have paid all due taxes.

Visas and Work Permits for Foreign Nationals

Nepal provides special visa options to facilitate foreign investors and personnel:

• Investor Visas: Foreign investors in a Nepali company are eligible for a multiple-entry business visa, usually issued for 1 year at a time (renewable annually). Substantial investors can qualify for longer durations – in practice, those investing larger sums and contributing to the economy may obtain a 5-year business visa on recommendation. Moreover, any foreigner investing over USD 100,000 in Nepal at once can apply for a Residential Visa, renewable each year, which confers long-term residency status.

• Family and Staff Visas: Immediate family members (spouse and children) of a foreign investor or a foreign employee can also receive dependent visas to live in Nepal. New reforms in 2025 explicitly extended non-tourist visas to the family of foreign technical and managerial employees. making it easier for expat professionals to relocate with their families.

• Work Permits: To legally work in Nepal, foreign nationals must obtain a work permit from the Department of Labour. Companies need to justify hiring a foreign expert for a position (typically when skilled Nepali workers are not available). Once approved, the foreign employee receives a work permit ID. It’s advisable to hire local staff for the majority of roles and reserve foreign hires for specialized positions, as labor laws encourage training and employment of Nepali citizens.

Overall, Nepal’s visa policy is accommodating for investors. Business visas are readily granted upon showing your company’s FDI approval or shareholder status, and renewal is straightforward as long as the business remains in compliance. With the ability to bring family and key staff, foreign investors can comfortably base themselves in Nepal during the setup and operation of their company.

Government Incentives and Support for Foreign Investors

Nepal has implemented several initiatives to support and encourage foreign investment:

• One-Stop Facilitation: The Department of Industry operates a One Stop Service Centre that streamlines procedures for foreign investors by coordinating all approvals in one place. Similarly, Investment Board Nepal handles large projects with dedicated facilitation. This greatly reduces bureaucratic hurdles for new companies.

• Legal Protections: Foreign investors are guaranteed protection against nationalization. The law assures “national treatment” – no arbitrary expropriation and equal treatment as Nepali investors. Nepal has also signed Bilateral Investment Promotion and Protection Agreements (BIPAs) with several countries to provide extra assurance and international arbitration avenues for dispute resolution.

• Tax & Duty Concessions: As discussed earlier, Nepal offers corporate tax holidays (5 to 10 years) and customs duty exemptions to industries in priority sectors or export zones. These financial incentives significantly improve project viability and demonstrate the government’s commitment to attracting FDI.

• Special Economic Zones (SEZs): Businesses that set up in designated SEZs (e.g. Bhairahawa or Simara) enjoy perks like ready infrastructure (industrial plots, reliable power supply), simpler labor laws, and additional tax benefits (such as extended tax holidays and zero import duties on raw materials). Beyond SEZs, the government is developing industrial estates and IT parks to provide favorable locations for foreign ventures.

• Continued Aftercare: Government agencies actively engage with foreign investors even after setup, helping to resolve operational issues. Regular forums with investors are held to address concerns (from expediting VAT refunds to simplifying compliance). This aftercare indicates that Nepal values its foreign investors and is willing to adapt policies to support them.

By leveraging these incentives and support systems, foreign companies can save costs and navigate the local environment more smoothly. The government’s pro-investment stance in 2025 means that a company entering Nepal now will find a partner in the state, eager to ensure the business succeeds and grows.

Frequently Asked Questions (FAQs)

Q1: Can a foreign investor own 100% of a company in Nepal?
A: Yes. In most sectors, Nepal allows up to 100% foreign ownership of a company. You do not need a local partner or shareholder unless the law specifies a cap in that sector. For example, banking is limited to 75% foreign ownership, insurance 51%, domestic airlines 49%, and telecom services 80%. But sectors like manufacturing, IT, tourism, and export businesses permit full foreign control. Always check the Negative List of banned industries, but if your business is not on it, you can own it outright.

Q2: What is the minimum investment required for foreign company registration in Nepal?
A: Generally, the minimum foreign direct investment (FDI) amount is NPR 20 million (approximately USD $150,000). This is the standard threshold under current policy. It was reduced from NPR 50 million in 2022 to make Nepal more accessible to smaller investors. One exception is in information technology: if you’re investing in an IT startup, the minimum can be lower or waived provided you use the new automatic approval route. Some industries also have their own capital requirements (e.g. a large hotel project or a banking license will naturally require more capital by regulation), but for most ordinary foreign investments, NPR 20 million is the benchmark.

Q3: How long does it take to register a foreign-owned company in Nepal?
A: Typically around 4 to 6 weeks in total. The FDI approval stage from the Department of Industry usually takes about 30 days (though the new automatic route can shorten this to a few days for eligible projects). Once you have approval, the company incorporation with OCR is fast – often one week or less, since name reservation and document filing can be done online Post-incorporation tasks (like tax registration and any additional licenses) might add another couple of weeks. In summary, many foreign companies can be fully set up within 1 to 2 months. Engaging local consultants or legal advisors can help speed up each step.

Q4: Can foreign investors freely repatriate profits and capital from Nepal?
A: Yes, Nepalese law guarantees the right to repatriate profits, dividends, and the proceeds from the sale of your investment in convertible currency. You must have paid all applicable taxes and follow the approval process. After paying taxes on profits, you apply to the DOI for dividend repatriation approval. As of 2025, approvals are very quick (decision within 7 days). Once approved, your bank converts the funds to USD (or other currency) and transfers it overseas. The same process applies to repatriating capital if you sell shares or liquidate – just with additional documentation to show taxes on any gains are paid. In practice, if your compliance is in order, you can regularly remit annual dividends without hassle. Many investors also take out royalties, management fees, or interest on foreign loans; these are allowed too, provided they were part of the investment agreement and relevant taxes (typically 5–15% withholding) are deducted.

Q5: What taxes will my company have to pay in Nepal?
A: The major taxes are:

• Corporate Income Tax: 25% on net profits for most companies (30% for banks/insurance/telecom). This is filed and paid annually.

• Dividend Tax: 5% withholding on dividends distributed to foreign shareholders (deducted at source when you declare a dividend).

• VAT: 13% value-added tax on local sales of goods and services. You collect this from customers and remit to the government, usually offset by claiming credit for VAT you paid on purchases.

• Withholding Taxes: 15% on interest paid abroad, 15% on royalties or technical service fees to foreign entities, and various rates on payments to local vendors as well (e.g. 1.5% on most service fees in Nepal).
  Additionally, employers contribute to the Social Security Fund for local employees (currently 20% of basic salary) and withhold personal income tax from salaries. Nepal offers many tax incentives (tax holidays, rebates) which can reduce the effective tax burden, especially in priority sectors – we’ve covered these incentives in the guide above. It’s wise to consult a tax expert to plan optimally, but overall Nepal’s standard tax rates are moderate and the regime is improving each year.

Q6: Do I need a Nepali partner or director to set up the company?
A: No. Nepal permits wholly foreign-owned companies. You are not required to have a local Nepali shareholder or joint venture partner, except in restricted industries (if any). The directors of the company can also be entirely foreigners. The Companies Act even allows a person from the foreign parent company to be a director in the Nepali subsidiary and vice versa, which helps in oversight. That said, you will need a local registered office address in Nepal and it’s often convenient to appoint a local representative or consultant to handle day-to-day liaison with authorities. But legally, there is no mandate for local ownership or local personnel on the board for general industries. This gives foreign investors full control over their business structure.

Q7: Can a foreign company open a branch or liaison office in Nepal instead of a new subsidiary?
A: Yes, Nepal allows foreign companies to register a Branch Office or Liaison Office under certain conditions. A Branch Office can carry out commercial activities but is typically allowed only if the foreign company has a specific project or contract in Nepal (for example, a construction project, or operating international airlines). Branch registration requires approval from the DOI, and the branch will be subject to Nepali taxes on its local income (branches are taxed at 25% and branch profits remitted abroad incur 5% tax, similar to a subsidiary). A Liaison Office (or Representative Office) is a simpler setup meant for non-commercial activities – it can promote the parent company’s business, do market research, or liaise with clients, but cannot engage in any revenue-generating trade. Liaison offices are mainly for presence and networking; they also require DOI approval but the process is straightforward since no commercial transactions are involved. If your goal is long-term business in Nepal, incorporating a local company is usually more suitable. Branches are common for short-term projects or when a specific law (like banking or insurance) requires a branch form. Each option has its pros and cons, so it depends on your strategic need.

Q8: How difficult is it to hire foreign staff for my Nepali company?
A: Nepal’s labor laws encourage hiring Nepali citizens wherever possible, but foreign employees can be hired for skilled positions. To employ a foreign national, you must obtain a work permit for them. Generally, you’d need to show why a Nepali could not fill that role – for instance, the job requires specialized expertise or experience. In practice, roles like technical experts, senior managers, or niche specialists are approved for foreign work permits without much issue. There isn’t a fixed quota of how many foreigners you can hire, but in most companies foreign staff are kept to a minimal needed number. The process involves an application to the Department of Labour with the candidate’s credentials and a letter from the DOI supporting the hire (the DOI typically gives this for FDI-approved companies). Once granted, a work permit is usually valid for a year and renewable. It’s also important to note that the foreign employee will need an employment (non-tourist) visa which is tied to the work permit. As long as your company is up and running and the need for the foreign skill is clear, getting and renewing work permits is manageable. But expect that lower or mid-level positions should be filled by Nepali staff. Many companies use foreign experts in training roles to upgrade local staff, which aligns with the government’s push for skill transfer.

Conclusion

Nepal in 2025 presents a landscape of opportunity for foreign companies willing to venture into a new market. The country has worked hard to update its laws, embrace digital administration, and offer competitive incentives to attract global investors. From simplified company registration and faster approvals to tax holidays and investor-friendly visa policies, the reforms are transforming Nepal into a business destination worth serious consideration. Challenges exist, as in any emerging market, but they are surmountable with the right strategy and local partnerships.

For foreign businesses looking for growth in South Asia, Nepal offers strategic advantages – a gateway to India and China, a young and cost-effective talent pool, and numerous untapped sectors ready for innovation. The encouraging changes in company registration, compliance, and incentives in 2025 make it an ideal time to incorporate in Nepal.

Now is the time to take action. Whether you are a manufacturing firm seeking a tax-efficient production base, a tech startup eyeing a supportive ecosystem, or an international brand looking to expand into a new frontier, Nepal welcomes you. The process is more streamlined than ever, and there are professionals and government bodies ready to assist at every step. By registering a business in Nepal, you not only tap into a growing market but also become part of the country’s exciting economic journey. Don’t miss out on the advantages on offer – consider Nepal for your next international expansion and reap the rewards of being a pioneer in this rising economy.