If you want to start a business in Nepal from abroad, you are not alone. Nepal is emerging as a strategic destination for NRNs, expats, and foreign companies seeking cost efficiency, skilled talent, and access to South Asia.
This guide explains exactly how to start a business in Nepal while living overseas. It covers legal structures, foreign investment rules, timelines, costs, and compliance. Everything is written for decision-makers who need clarity, not theory.
By the end, you will know the safest and fastest way to enter Nepal legally.
Nepal offers a rare combination of affordability and opportunity.
Competitive labour and operating costs
English-speaking professional workforce
Government-approved foreign investment framework
Growing IT, outsourcing, fintech, and services sectors
Strategic access to India and China
For NRNs, Nepal also offers emotional and strategic advantages. You can invest, build, and contribute while earning globally.
Yes. Foreigners and NRNs can start a business in Nepal under clearly defined laws.
Non-Resident Nepalis with foreign passports
Foreign nationals and foreign companies
Joint ventures between Nepali and foreign partners
However, foreigners cannot operate informal sole proprietorships. A formal legal structure is mandatory.
Choosing the right structure determines your taxes, risk, and scalability.
This is the most common structure.
Best for: Long-term operations, hiring staff, revenue generation.
Key points:
Requires foreign direct investment approval
100% foreign ownership allowed in most sectors
Separate legal entity
Best for: Executing parent-company projects.
Key points:
Cannot conduct unrelated commercial activity
Operates under parent company liability
Best for: Market research and coordination.
Key points:
No revenue generation allowed
Limited scope
| Criteria | Private Limited (FDI) | Branch Office | Liaison Office |
|---|---|---|---|
| Revenue allowed | Yes | Limited | No |
| Hiring staff | Yes | Yes | Limited |
| Ownership | Up to 100% foreign | Parent owned | Parent owned |
| Compliance level | High | Medium | Low |
| Scalability | Excellent | Moderate | Low |
This is the standard and compliant process.
Nepal restricts foreign investment in certain sectors such as retail trading and small local services. Most IT, consulting, manufacturing, and outsourcing sectors are open.
Foreign investment approval is required under the Foreign Investment and Technology Transfer framework.
You must submit:
Company profile
Shareholding structure
Proposed investment amount
Business plan
Once approved:
Reserve company name
Register with the Company Registrar
Issue share certificates
You must obtain:
Permanent Account Number
VAT registration if applicable
Local ward registration
Foreign capital must be remitted through formal banking channels into Nepal.
Hiring staff requires:
Employment contracts
Social security registration
Monthly tax filings
Nepal sets a minimum foreign investment threshold.
Minimum foreign investment: NPR 20 million
Applies to most FDI companies
Must be brought in via bank transfer
NRNs may access some flexibility depending on structure and sector.
Understanding tax early prevents costly mistakes.
Corporate income tax: 25% standard
Withholding taxes on services and dividends
VAT at 13% for applicable services
Monthly TDS withholding
Mandatory social security contributions
Nepal’s tax regime is stable but compliance-driven.
Many foreign founders worry about remote oversight.
You can legally hire:
Local Nepali staff
Remote global employees
Outsourced teams
Options include:
Direct employment
Employer of Record services
Project-based contracts
Foreign companies can legally repatriate profits.
Dividends
Loan repayments
Management fees
Repatriation requires:
Tax clearance
Central bank compliance
Proper documentation
Avoid these issues early.
Using informal nominee arrangements
Skipping foreign investment approval
Underestimating payroll compliance
Poor sector eligibility checks
Improper capital remittance
These mistakes often delay operations by months.
Typical timelines:
Foreign investment approval: 2–4 weeks
Company registration: 1 week
Tax and banking setup: 1–2 weeks
Total: 4–6 weeks with proper planning.
Typical setup costs include:
Government registration fees
Legal and compliance advisory
Capital remittance costs
Accounting setup
Costs vary by structure and sector.
Once you start a business in Nepal, compliance is ongoing.
Monthly tax filings
Annual audit
Social security payments
Regulatory renewals
Professional support is strongly recommended.
Nepal is modernising its investment framework.
Key trends:
Digital company registration
Improved foreign investor protection
Growing startup ecosystem
Increased demand for outsourced services
NRNs are uniquely positioned to bridge global markets and local execution.
Yes. With a local power of attorney, the entire process can be completed remotely.
Yes. Many sectors allow full foreign ownership with approved investment.
Nepal has a structured legal framework and central bank oversight for foreign investment.
Yes. Profits can be legally repatriated after tax compliance.
IT services, consulting, and outsourcing are the fastest and most compliant sectors.
To start a business in Nepal from abroad, you need more than ambition. You need legal clarity, compliant structures, and local execution.
Nepal rewards well-planned foreign founders with access to talent, cost efficiency, and long-term growth. With the right setup, Nepal can become a powerful extension of your global business.
Thinking of starting your business in Nepal from abroad?
Book a consultation with our Nepal market-entry specialists and receive a personalised setup roadmap within 48 hours.