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.
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.
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
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.
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.
A Nepali individual registers a sole proprietorship.
The foreign company controls operations via agreements.
This structure requires tight legal drafting.
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
Ask one question first:
Are you testing the market or building a long-term base?
This determines your structure.
Most foreign companies begin with:
Outsourcing contracts
Representative arrangements
Employer of Record models
This may include:
PAN registration
Consultancy license
Trade name registration
Basic compliance filings
Foreign currency inflows are regulated by Nepal Rastra Bank.
Early-stage models avoid direct capital inflows.
Nepal offers competitive salaries for skilled professionals, especially in service roles.
| Expense Category | Estimated Cost (NPR) |
|---|---|
| Name registration | 1,000 – 2,000 |
| PAN registration | 0 |
| Legal drafting | 20,000 – 40,000 |
| Consulting & setup | 25,000 – 40,000 |
| Miscellaneous | 10,000 – 15,000 |
| Total | Under 100,000 |
This excludes employee salaries, which are operational costs.
| Criteria | Under NPR 1 Lakh Entry | Full FDI Company |
|---|---|---|
| Capital required | Very low | Minimum NPR 20 million |
| Timeline | 1–3 weeks | 2–4 months |
| Revenue generation | Limited or offshore | Fully allowed |
| Compliance | Light | Heavy |
| Scalability | Medium | High |
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.
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.
You should move to FDI when:
You plan to bill Nepali clients
Headcount exceeds 10–15 people
Long-term contracts are signed
You need profit repatriation
Most foreign companies upgrade within 12–24 months.
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.
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.
Yes. Foreigners can operate through outsourcing, liaison arrangements, or Employer of Record models without formal FDI.
For foreign-owned FDI companies, the minimum is NPR 20 million. Low-investment entry uses alternative structures.
Direct local revenue is restricted. Most models invoice offshore while operating locally.
Yes. Nepal has clear investment laws and profit repatriation rights under FITTA 2019.
Low-investment structures can be operational within 1–3 weeks.
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.