Nepal has emerged as a promising investment destination in South Asia, offering access to untapped markets, abundant natural resources, and proximity to two economic giants—India and China. In recent years, the government has prioritized foreign direct investment (FDI), revising regulations and simplifying entry requirements for global investors.
In 2025, foreign company registration in Nepal is faster and more streamlined than ever before. However, navigating the regulatory landscape still requires strategic planning and a clear understanding of the country’s foreign investment laws, timelines, and compliance requirements.
This article provides a comprehensive, up-to-date guide to Nepal’s foreign investment process as it stands in 2025. It covers everything foreign companies need to know—from entry options and approvals to taxation, profit repatriation, and practical compliance steps.
Nepal’s primary legal frameworks for foreign investment are:
Foreign Investment and Technology Transfer Act (FITTA), 2019
Industrial Enterprises Act, 2020
Companies Act, 2006
Foreign Exchange Regulation Guidelines (by Nepal Rastra Bank)
These laws collectively:
Allow 100% foreign ownership in most sectors
Set a minimum FDI threshold of NPR 20 million
Guarantee profit repatriation and protection from nationalization
Define sectoral restrictions and procedural timelines
Nepal operates on a positive-list approach, meaning foreign investment is allowed in all sectors unless explicitly restricted.
In 2025, Nepal welcomes the following forms of FDI:
| Type of Investment | Description |
|---|---|
| Equity Investment | Shareholding in new or existing companies |
| Joint Venture | Partnership with a Nepali business |
| Technology Transfer | Licensing agreements, technical assistance |
| Reinvestment | Profit reinvestment by existing foreign investors |
| Lease Financing | In select capital-intensive sectors |
| Venture Capital (regulated) | Investment in startups under new 2025 framework |
| Branch Office Setup | Extension of foreign parent (project-based work) |
All forms of investment must be reported to and approved by the Department of Industry (DoI) and Nepal Rastra Bank (NRB).
Foreign investors can enter Nepal using any of the following structures:
100% foreign-owned or joint venture
Most common option for long-term operations
Required for regulated industries or large-scale projects
Must meet higher capital and governance thresholds
Suitable for temporary or project-based presence
Not a separate legal entity
Representative presence for market research
No income-generating activity allowed
Nepal’s 2025 process has been simplified with digital platforms and single-window systems. However, investors must still follow a sequence of legal steps:
Project Proposal
Shareholder/Investor Details
Financial Credentials
Technology Transfer Agreements (if applicable)
Submit application via the DoI’s online portal
Receive Foreign Investment Approval Certificate
Register business with the Office of Company Registrar (OCR)
Obtain PAN (Permanent Account Number) and VAT registration from the Inland Revenue Department
Transfer investment capital via SWIFT into a Nepal-based bank
Submit inward remittance proof to Nepal Rastra Bank
Receive NRB approval for capital registration
Register under the Industrial Enterprises Act if the business qualifies as an industrial entity
After receiving approvals and registering with required authorities
| Stage | Approximate Duration |
| DoI Approval | 7–10 working days |
| Company Registration (OCR) | 3–5 working days |
| PAN/VAT Registration | 2–3 working days |
| NRB Capital Approval | 7–10 working days |
Most companies complete the process within 30–45 working days, provided all documents are complete and correct.
Foreign investment is prohibited or restricted in the following sectors:
| Sector | Status |
| Primary agriculture (non-commercial) | Restricted |
| Weapons and explosives | Prohibited |
| Real estate trading | Prohibited |
| Domestic retail business | Restricted |
| Consultancy services (some) | Max 51% foreign equity |
| Casino industry | Requires Nepali partner |
Always verify current sectoral restrictions with the DoI before investing.
Nepal’s taxation policies treat foreign companies similarly to domestic firms, with some nuances.
| Tax Type | Rate |
| Corporate Income Tax | 25% standard; 20% for special industries |
| VAT | 13% standard rate |
| Dividend Tax | 5% withholding tax |
| TDS on Services | 1.5% to 15% based on type |
5–10 year tax holidays for hydropower, tourism, ICT, and SEZ-based industries
Reduced tax rates for exports and employment-generating industries
Customs duty exemptions on machinery and raw materials
Nepal allows full repatriation of dividends, capital gains, and loan repayments for registered foreign investments.
Conditions:
Tax clearance from Inland Revenue Department
Board resolution declaring dividends
Approval from Nepal Rastra Bank
Repatriation can be made in the original investment currency or any convertible currency. The process generally takes 2–3 weeks after documentation submission.
Once operational, foreign companies must adhere to:
| Compliance Task | Frequency |
| VAT Return | Monthly/Quarterly |
| TDS Filing | Monthly |
| Annual Tax Return | Yearly (Poush End) |
| Annual Audit | Yearly (3 months post-FY) |
| Social Security Contributions | Monthly |
Failure to comply can result in penalties, suspension of profit repatriation, or cancellation of business licenses.
Using informal channels to remit capital
Missing VAT registration despite revenue activity
Failing to document capital inflow with NRB
Ignoring double taxation treaty benefits
Delays in audit and tax filings
Choose the right structure: Branch vs. Subsidiary
Engage a licensed local CA firm
Open a foreign currency account with an NRB-authorized bank
Plan capital inflow in phases, with clear timelines
Use official DoI and NRB checklists to avoid rejections
Nepal’s 2025 foreign investment process reflects a maturing economy eager to attract ethical, long-term global partnerships. With regulatory clarity, digital procedures, and investor protection, the country is offering a level playing field to international firms.
Whether you’re entering Nepal to harness its hydropower, serve its digital economy, or access South Asian trade corridors, understanding the investment process is your first step to success.
For companies seeking foreign company registration in Nepal, now is the time to move—while incentives are high and barriers are low. The future is open for those ready to act with compliance, clarity, and commitment.