Start a Business in Nepal with Low Investment (Under NPR 1 Lakh)

If you are looking to start a business in Nepal with minimal capital, you are not alone. Nepal has become one of South Asia’s most cost-effective entry markets for foreign companies. With flexible legal structures, a growing digital economy, and low operating costs, it is possible to enter Nepal with an investment under NPR 1 lakh for specific business models.

This guide is written for foreign companies, founders, and international consultants who want a compliant, scalable, and low-risk way to test the Nepal market. You will learn what is legally allowed, which structures work, realistic costs, and how to move forward confidently.

Why Nepal Is a Low-Investment Market for Foreign Companies

Nepal offers a rare combination of affordability and access.

Key advantages include:

• One of the lowest incorporation costs in Asia

• English widely used in business and law

• Strong talent pool in IT, accounting, design, and support services

• Government push for digitalization and foreign collaboration

According to Department of Industry data, service-based businesses dominate new registrations, largely due to low capital requirements.

Can Foreigners Start a Business in Nepal Under NPR 1 Lakh?

Short answer: Yes, but with limits

Foreigners cannot own a standard Nepali company without foreign investment approval. However, low-investment entry is possible through specific legal routes.

You can start a business in Nepal under NPR 1 lakh if:

• The business is service-based

• You begin with market entry or outsourcing models

• You defer full FDI incorporation to a later stage

You cannot:

• Inject foreign capital formally under NPR 1 lakh via FDI

• Operate retail or manufacturing as a foreign owner at this level

Legal Pathways to Start a Business in Nepal with Low Investment

1. Liaison or Representative Presence

This is the lowest-risk option for foreign companies.

Permitted activities include:

• Market research

• Partner discussions

• Hiring local consultants

• Business development

No revenue generation is allowed in Nepal.

2. Outsourcing and Employer of Record Model

Foreign companies can legally operate by:

• Contracting a Nepal-based partner

• Hiring staff through Employer of Record services

• Avoiding immediate entity registration

This is widely used by tech, accounting, and consulting firms.

3. Individual Registration with Foreign Control via Contract

A Nepali individual registers a sole proprietorship.
The foreign company controls operations via agreements.

This structure requires tight legal drafting.

Businesses You Can Start in Nepal Under NPR 1 Lakh

High-Potential, Low-Cost Business Models

Below are business types commonly used by foreign companies entering Nepal on a small budget:

• Market research and feasibility studies

• IT support and software testing units

• Accounting and bookkeeping support teams

• Digital marketing and SEO delivery centers

• Remote design, CAD, and documentation teams

• Back-office processing and data management

Step by Step: How to Start a Business in Nepal Under NPR 1 Lakh

1. Define the Entry Objective

Ask one question first:

Are you testing the market or building a long-term base?

This determines your structure.

2. Choose the Right Legal Route

Most foreign companies begin with:

• Outsourcing contracts

• Representative arrangements

• Employer of Record models

3. Register Required Local Components

This may include:

• PAN registration

• Consultancy license

• Trade name registration

• Basic compliance filings

4. Set Up Banking and Payments

Foreign currency inflows are regulated by Nepal Rastra Bank.
Early-stage models avoid direct capital inflows.

5. Hire Local Talent

Nepal offers competitive salaries for skilled professionals, especially in service roles.

Cost Breakdown: Starting a Business in Nepal Under NPR 1 Lakh

This excludes employee salaries, which are operational costs.

Comparison: Low-Investment Entry vs Full FDI Incorporation

Key Laws Foreign Companies Must Know

Even low-investment models must respect Nepali law.

Key legislation includes:

• Foreign Investment and Technology Transfer Act

• Companies Act

• Income Tax Act

• Labour Act 2017 (for local hiring)

Ignoring compliance risks penalties and exit restrictions.

Common Mistakes Foreign Companies Make

Avoid these early-stage errors:

• Registering a company unnecessarily

• Accepting informal nominee structures

• Moving funds without NRB approval

• Hiring staff without labor compliance

• Skipping written IP and confidentiality clauses

A low-investment start still needs high-quality legal structuring.

When Should You Upgrade to Full FDI?

You should move to FDI when:

1. You plan to bill Nepali clients

2. Headcount exceeds 10–15 people

3. Long-term contracts are signed

4. You need profit repatriation

Most foreign companies upgrade within 12–24 months.

Why Professional Guidance Matters Even at Low Investment

Starting small does not mean cutting corners.

A well-structured low-investment entry allows you to:

• Test Nepal with minimal risk

• Protect IP and brand

• Transition smoothly into FDI

• Avoid regulatory surprises

This is where specialized advisors add value.

Call to Action

If you are planning to start a business in Nepal with low investment, the structure matters more than the budget.

👉 Book a confidential consultation to assess the best legal entry model for your business.
👉 Get a custom roadmap from market entry to full FDI when you are ready.

Frequently Asked Questions (People Also Ask)

Can foreigners start a business in Nepal without FDI?

Yes. Foreigners can operate through outsourcing, liaison arrangements, or Employer of Record models without formal FDI.

What is the minimum investment to start a business in Nepal?

For foreign-owned FDI companies, the minimum is NPR 20 million. Low-investment entry uses alternative structures.

Can I earn revenue in Nepal under NPR 1 lakh investment?

Direct local revenue is restricted. Most models invoice offshore while operating locally.

Is Nepal safe for foreign business investment?

Yes. Nepal has clear investment laws and profit repatriation rights under FITTA 2019.

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

Low-investment structures can be operational within 1–3 weeks.

Conclusion

To start a business in Nepal under NPR 1 lakh, you need the right strategy, not shortcuts. Nepal rewards careful planning, legal clarity, and phased growth. With the correct structure, foreign companies can enter affordably, scale safely, and transition to full investment when the time is right.