Foreign company registration in Nepal has become a strategic move for global businesses seeking access to South Asia’s fastest-opening frontier market. With liberalised Foreign Direct Investment (FDI) rules, improving infrastructure, and a young workforce, Nepal offers a compelling entry point for manufacturing, IT services, energy, tourism, and professional services.
This guide gives you the most authoritative, up-to-date explanation of FDI and company registration in Nepal, written for foreign founders, CFOs, and expansion leaders who want clarity, speed, and compliance from day one.
Nepal has steadily reformed its investment framework to attract overseas capital while protecting national interests. For foreign companies, the appeal lies in:
Competitive operating costs compared to India and Southeast Asia
Strategic access between India and China
Government-backed incentives in priority sectors
A clear, codified FDI approval and company registration system
Under Nepal’s investment regime, a foreign company can legally own equity, repatriate profits, and operate long-term with regulatory certainty.
Foreign company registration in Nepal is regulated through a coordinated framework of laws and regulators in Nepal.
Foreign Investment and Technology Transfer Act (FITTA) 2019
Companies Act 2006
Industrial Enterprises Act 2020
Income Tax Act 2002
Labour Act 2017 and Social Security Act 2018
Department of Industry (DOI) or Investment Board Nepal (IBN)
Office of the Company Registrar (OCR)
Nepal Rastra Bank (NRB)
Inland Revenue Department
Each authority plays a defined role. This separation reduces risk but requires coordinated compliance.
FDI in Nepal is broadly defined. It includes:
Equity investment in a Nepali company
Reinvestment of retained earnings
Technology transfer, licensing, or franchising
Share acquisition from an existing shareholder
The current minimum FDI threshold is NPR 20 million per investor, subject to sector-specific rules.
Nepal follows a negative list approach. This means all sectors are open unless expressly restricted.
Information technology and software services
Manufacturing and light industry
Renewable energy and hydropower
Tourism, hotels, and hospitality
Professional and consulting services
Personal retail trading
Cottage industries reserved for locals
Real estate trading without development
Certain defence-related activities
Sector eligibility is always checked at the FDI approval stage.
Foreign investors can choose from multiple legal structures depending on control, tax planning, and market strategy.
This is the most common route.
Separate Nepali legal entity
Foreign shareholding allowed up to 100 percent in most sectors
Eligible for profit repatriation
Extension of the foreign parent
No separate legal personality
Suitable for project-based or short-term operations
Non-revenue generating
Market research and coordination only
Cannot invoice locally
Below is a simplified, practical overview of the process.
Application submitted to DOI or IBN with:
Project report
Shareholding structure
Source of funds declaration
Once FDI approval is issued:
Name reservation at OCR
Memorandum and Articles of Association
Company registration certificate
Open local bank account
Inject approved foreign capital
NRB reporting and confirmation
PAN and VAT registration
Social Security Fund enrolment
Local municipality registration
| Stage | Estimated Time |
|---|---|
| FDI approval | 2–4 weeks |
| Company registration | 3–5 working days |
| Capital verification | 1–2 weeks |
| Tax and labour setup | 1 week |
Total average timeline: 4–6 weeks with proper documentation.
Foreign company registration in Nepal is cost-efficient compared to many jurisdictions.
Government registration and filing fees
Legal and professional advisory fees
Capital commitment (minimum NPR 20 million)
Ongoing compliance and audit costs
A transparent cost plan at the outset prevents delays and regulatory pushback.
Understanding taxation is critical for investment modelling.
Standard corporate tax: 25 percent
Special sectors may receive tax holidays or reduced rates
Dividends subject to withholding tax
Repatriation permitted after tax clearance
NRB approval required for outward remittance
Nepal allows lawful profit repatriation, a major confidence signal for foreign investors.
Foreign companies must comply fully with Nepali labour law.
Key obligations include:
Written employment contracts
Minimum wage compliance
Mandatory Social Security Fund contributions
Statutory leave and termination procedures
Non-compliance here is one of the most common risks for new entrants.
Foreign investors often struggle with:
Incomplete documentation during FDI approval
Misalignment between parent-company expectations and local law
Delays in capital verification
Ongoing compliance after incorporation
These issues are avoidable with structured advisory support.
| Factor | Nepal | India | Bangladesh |
|---|---|---|---|
| Minimum FDI | NPR 20m | Sector-based | Varies |
| Labour cost | Low | Medium | Low |
| Profit repatriation | Allowed | Allowed | Restricted |
| Regulatory complexity | Moderate | High | Moderate |
For service-driven or cost-sensitive operations, Nepal offers a balanced entry profile.
To succeed with foreign company registration in Nepal:
Align your global structure with local compliance early
Plan capital inflow and timelines conservatively
Appoint local compliance and payroll experts
Treat post-registration compliance as a priority, not an afterthought
Foreign company registration in Nepal is no longer a high-risk frontier move. With clear FDI rules, improving institutions, and strong investor protections, Nepal is emerging as a credible base for South Asian expansion.
Foreign companies that invest with a structured, compliant approach benefit from lower costs, long-term stability, and full profit repatriation rights.
Planning FDI and company registration in Nepal?
Book a consultation with our Nepal expansion specialists to receive a tailored investment structure, timeline, and compliance roadmap.
Yes. Most sectors allow full foreign ownership, except those on the negative list.
The general minimum is NPR 20 million per foreign investor, subject to sector rules.
Yes. Profits, dividends, and capital can be repatriated after tax clearance and NRB approval.
Typically 4–6 weeks with complete documentation and professional support.
At least one local authorised representative is required, but directors can be foreign nationals.