Cost of Starting a Business in Nepal: Budget & Fees Breakdown

If you are planning to start a business in Nepal, understanding the true cost is critical. Nepal is one of South Asia’s most cost-efficient destinations for foreign companies, but the fees are not always obvious. Government charges, foreign direct investment approvals, compliance costs, and ongoing obligations can surprise first-time investors.

This guide provides a clear, authoritative, and up-to-date cost breakdown for foreign companies looking to enter Nepal. You will learn what you must pay, when you must pay it, and how to budget realistically from incorporation to operations.

Why Foreign Companies Are Choosing Nepal

Nepal offers a unique mix of affordability, talent availability, and regulatory openness to foreign investment.

Key advantages include

• Competitive labor and operating costs

• 100 percent foreign ownership in most sectors

• Full repatriation of profits and capital

• English-speaking professional workforce

• Growing IT, outsourcing, and services ecosystem

These advantages explain why many companies now start a business in Nepal instead of higher-cost Asian markets.

Legal Framework for Starting a Business in Nepal

Foreign investment in Nepal is regulated under several core laws and institutions.

Key laws and regulators

• Department of Industry

• Nepal Rastra Bank

• Office of Company Registrar

• Foreign Investment and Technology Transfer Act 2019

• Companies Act 2006

Together, these govern company incorporation, FDI approval, capital inflow, and repatriation.

Minimum Investment Requirement in Nepal

To start a business in Nepal as a foreign investor, you must meet the minimum FDI threshold.

Minimum capital

• NPR 20 million (approx. USD 150,000)

• Applies to most sectors

• Must be brought in via banking channels

This amount is investment capital, not a government fee. It remains your company’s money.

Cost Categories When Starting a Business in Nepal

To budget accurately, costs should be grouped into five categories.

1. Government registration and statutory fees

2. Professional and legal fees

3. Capital import and banking costs

4. Office, staffing, and setup costs

5. Ongoing compliance and tax costs

Each category is explained in detail below.

Government Fees to Start a Business in Nepal

Company registration fees

Company registration fees depend on authorized capital.

These fees are paid to the Office of Company Registrar.

FDI approval fees

FDI approval from the Department of Industry is mandatory.

• Application fee: NPR 20,000

• Project approval fee: NPR 20,000–50,000

• Sector-specific licensing fees may apply

PAN and tax registration

• Permanent Account Number registration: No government fee

• VAT registration, if applicable: No government fee

Professional Fees for Foreign Investors

Professional support is strongly recommended when you start a business in Nepal.

Typical professional services

• Company incorporation

• FDI approval and documentation

• Bank coordination

• Capital repatriation structuring

• Employment and compliance setup

Estimated professional fees

• USD 3,000 to USD 7,000 for full incorporation and FDI support

Costs vary by complexity, sector, and timeline.

Banking and Capital Inflow Costs

Capital transfer charges

• International wire fees: USD 30–100 per transfer

• Nepal bank inward remittance fees: minimal

Foreign currency approval

• Mandatory approval from Nepal Rastra Bank

• No official fee, but documentation costs apply

Office Setup Costs in Nepal

Office costs are one of Nepal’s strongest advantages.

Typical monthly office rent

• Kathmandu prime area: USD 3–6 per sq. ft.

• Secondary locations: USD 1.5–3 per sq. ft.

Initial setup expenses

• Furniture and IT: USD 2,000–5,000

• Internet and utilities: USD 50–150 monthly

Staffing Costs for Foreign Companies

Labor costs in Nepal are highly competitive.

Average monthly salaries

• Accountant: USD 400–700

• Software developer: USD 700–1,500

• Operations executive: USD 350–600

Statutory employment costs

• Social Security Fund contribution: 31 percent of basic salary

• Employer portion: 20 percent

• Employee portion: 11 percent

Tax Costs to Consider

Corporate income tax

• Standard rate: 25 percent

• Special industries may receive concessions

Withholding tax

• Applies on dividends, services, and royalties

VAT

• Standard rate: 13 percent

• Mandatory if annual turnover exceeds threshold

Comparison Table: Nepal vs Regional Alternatives

Insight: Nepal offers the lowest total cost base for service-oriented foreign companies.

Timeline to Start a Business in Nepal

Most foreign investors complete setup in 6–10 weeks.

1. Name reservation and documentation

2. FDI approval

3. Company registration

4. Bank account opening

5. Capital inflow

6. Tax and compliance setup

Common Cost Mistakes Foreign Companies Make

• Underestimating compliance costs

• Ignoring SSF and labor obligations

• Delaying capital inflow approvals

• Choosing incorrect business structure

Avoiding these mistakes protects your investment.

When Nepal Is the Right Choice

Nepal is ideal if you are:

• Building a service or outsourcing center

• Establishing a regional support office

• Running IT, consulting, or professional services

• Seeking cost efficiency with legal certainty

Final Cost Summary

To start a business in Nepal, foreign companies should budget:

• Minimum capital: NPR 20 million

• Government fees: USD 500–1,000

• Professional fees: USD 3,000–7,000

• Initial office and setup: USD 3,000–8,000

Total initial budget: USD 10,000–20,000 excluding capital investment.

Conclusion

If you want to start a business in Nepal, the country offers one of the most attractive cost-to-value ratios in Asia. With transparent FDI laws, low operating expenses, and full profit repatriation, Nepal is no longer an emerging option. It is a strategic choice.

With the right guidance, your setup can be compliant, fast, and cost-efficient.

Call to Action

Planning to start a business in Nepal?
Book a free FDI cost consultation to receive a tailored budget, timeline, and compliance roadmap for your company.

Frequently Asked Questions

Is Nepal open to 100 percent foreign ownership?

Yes. Most sectors allow full foreign ownership under FITTA 2019.

How long does it take to start a business in Nepal?

Typically 6–10 weeks, depending on sector approvals.

Can profits be repatriated from Nepal?

Yes. Nepal allows full repatriation through Nepal Rastra Bank approval.

Is physical office space mandatory?

Yes, a registered office address is required.

Is Nepal suitable for tech startups?

Yes. Nepal offers skilled talent and low operational costs.