Nepal is quietly emerging as South Asia’s next digital frontier. With a young, educated, and English-speaking population, increasing internet penetration, and a rapidly growing startup ecosystem, Nepal is drawing the attention of international tech entrepreneurs. For those exploring company incorporation in Nepal, the tech industry offers immense untapped potential.
Whether you’re launching a software firm, outsourcing company, fintech startup, or digital product platform, Nepal offers a cost-effective and strategically located base for innovation.
100% Foreign Ownership Allowed in IT, software, and BPO sectors
Skilled Tech Talent Pool at competitive wages
Proximity to India and China with lower business setup costs
Growing Startup Ecosystem supported by incubators and hubs
Tax Incentives for IT Sector including exemptions on software and hardware imports
According to the Department of Industry, IT and software services were among the top three sectors for foreign direct investment (FDI) in 2023. This signals strong regulatory support and rising global interest.
Under the Foreign Investment and Technology Transfer Act (FITTA) 2019, foreign nationals and companies can fully own tech companies in Nepal. Key legal permissions include:
Full foreign ownership for software, SaaS, BPO, and IT-enabled services
Repatriation of profits with proper regulatory compliance
Option to lease or buy property for office space
Eligibility to hire both local and international staff
Note: Certain industries like retail trading, agriculture, and small-scale domestic services are restricted for foreign investors.
Foreigners must bring in a minimum capital of NPR 20 million (approximately USD 150,000) to register a private limited company in Nepal. This investment must be verifiably transferred through formal banking channels and registered with the Nepal Rastra Bank (NRB).
This includes:
Nature of the tech business
Technology to be used or transferred
Capital structure and funding sources
Operational and staffing plan
Submit your proposal for foreign investment registration. If approved, you'll receive a Foreign Investment Approval Letter.
Documents needed:
Articles and Memorandum of Association
Director/shareholder IDs and resolutions
Capital commitment details
Once approved, a Company Registration Certificate will be issued.
You must declare your investment and obtain approval from NRB to ensure:
Recognition of foreign capital
Legal protection for future profit repatriation
Foreign exchange compliance
You’ll receive:
PAN (Permanent Account Number)
VAT registration (if turnover exceeds NPR 2 million)
This is essential for capital injection, payroll, and tax payments.
Corporate Tax Rate: 25% (standard)
Withholding Tax on Dividends: 5–15% depending on residency
Software and IT Exemptions: No customs duty on imported IT equipment for registered tech companies
Repatriation of Profits: Permitted through NRB with proper tax clearance
Many tech startups also benefit from tax holidays for up to 5 years, especially those located in Special Economic Zones (SEZs).
To stay in good standing:
Submit audited annual financials to OCR
File monthly VAT returns and annual income tax returns
Renew business license and tax certificates annually
Maintain transparent payroll and social security contributions for local staff
Failure to comply can delay capital repatriation or trigger penalties.
SaaS Platforms
IT Outsourcing & Staff Augmentation
Web & App Development Agencies
Digital Marketing Firms
Cloud-Based ERP & CRM Solutions
Cybersecurity & DevOps Services
AI and Data Analytics Startups
All of the above are eligible for 100% foreign ownership and qualify under FITTA.
Access to lower development costs
Strategic time zone for US, EU, and APAC clients
Expanding local demand for digital transformation
Youth-dominated workforce eager to work in tech
No formal digital nomad visa yet
Regulatory paperwork may require local support
Tech infrastructure, while improving, is still developing in some regions
For tech entrepreneurs, investors, and global startups looking to establish a foothold in South Asia, company incorporation in Nepal offers strategic, financial, and operational advantages. The legal pathway is clear, and the market is primed for innovation.
Whether you’re building your development hub, outsourcing center, or a full-fledged product company, Nepal offers a fertile ground — and getting started is easier than many expect with the right guidance and local expertise.