If you are planning to start a business in Nepal, the online route is the fastest, most scalable, and most cost-efficient option for foreign companies. Nepal offers low operating costs, an English-speaking workforce, improving digital infrastructure, and strong government support for foreign direct investment.
This guide explains how to start an online business in Nepal from a legal, regulatory, and technical standpoint. It is written specifically for foreign founders, overseas directors, and international companies looking for compliant market entry.
By the end, you will understand the correct business structure, registration process, licensing, tax obligations, and digital setup required to operate legally and scale confidently.
Nepal has quietly become a strategic offshore and nearshore destination for digital businesses.
Key drivers include competitive labor costs, improving broadband penetration, and a favorable time zone for global operations.
Skilled talent in IT, finance, marketing, and operations
Monthly operating costs 60–70 percent lower than developed markets
English widely used in business and professional services
Growing startup ecosystem in Kathmandu and Lalitpur
Full profit repatriation allowed under foreign investment laws
According to the Government of Nepal, the ICT and services sector is among the fastest-growing segments for foreign investment.
Foreigners cannot operate informally in Nepal. A legal presence is mandatory.
When you start a business in Nepal, you must choose the correct entry model.
Foreign Direct Investment private limited company
Branch office of a foreign company
Liaison office for non-commercial activities
Employer of Record for hiring without entity setup
Each option suits a different stage of market entry.
This is the most common structure for long-term operations.
Under Nepal’s foreign investment regime, overseas shareholders can own up to 100 percent equity in most online service sectors.
FDI registration is governed by the Foreign Investment and Technology Transfer Act and related regulations.
USD 50,000 minimum foreign investment
Can be injected as equity or shareholder loan
Funds must enter Nepal through a licensed bank
SaaS and software development
Digital marketing agencies
IT outsourcing and BPO services
E-commerce platforms
Fintech and data services (sector approvals required)
Foreign investors apply through the Department of Industry or Investment Board Nepal, depending on project size.
The company is incorporated with the Office of the Company Registrar under the Companies Act.
Permanent Account Number
VAT registration if applicable
Social Security Fund enrollment
Funds are remitted through an approved Nepali bank with FDI reporting.
Sector-specific approvals may be required for fintech, payments, or regulated services.
Starting a business in Nepal is not only legal. It is also technical.
Business website with local compliance disclosures
Secure hosting with data protection safeguards
Accounting and payroll systems compliant with Nepali tax law
Payment gateway integration for domestic and international clients
International gateways via foreign parent entities
Local gateways for domestic transactions
Cross-border invoicing under NRB guidelines
Understanding taxes is essential when you start a business in Nepal.
Standard corporate income tax is 25 percent
Certain IT exports may qualify for concessions
Withholding tax applies on service payments
13 percent VAT on taxable digital services
Export services are generally zero-rated
Employer Social Security contribution is mandatory
Income tax withheld at source for employees
All taxation is governed by the Income Tax Act.
Many foreign founders want speed.
An Employer of Record allows immediate hiring without entity registration.
| Criteria | Employer of Record | FDI Private Limited |
|---|---|---|
| Setup time | 1–2 weeks | 8–12 weeks |
| Capital requirement | None | USD 50,000 |
| Legal ownership | No entity | Full ownership |
| Payroll compliance | Included | Self-managed |
| Scalability | Limited | Unlimited |
This hybrid approach is common for pilot operations.
Foreign-owned online businesses must maintain strict compliance.
Monthly payroll and tax filings
Annual financial statements
Audit and tax returns
FDI reporting to central bank
Renewal of sector licenses
Non-compliance can lead to fines, blocked repatriation, or business suspension.
One major advantage when you start a business in Nepal is full repatriation rights.
Foreign investors may repatriate:
Dividends
Profits
Loan repayments
Capital on exit
This is guaranteed under Nepal’s foreign investment framework, subject to tax clearance.
Avoid these early-stage errors.
Choosing a liaison office for commercial activity
Underestimating tax and payroll compliance
Improper capital injection documentation
Using personal accounts for business payments
Ignoring local labor laws
Professional structuring from day one saves cost and risk.
Nepal is ideal if you want to:
Build a remote or hybrid global team
Reduce operating and talent costs
Serve overseas clients from Nepal
Establish a South Asia delivery hub
For heavily regulated fintech or payment businesses, additional planning is required.
Digital Consulting Ventures supports international founders across the full lifecycle.
FDI structuring and approvals
Company registration and licensing
Virtual office and local directors
Accounting, payroll, and tax compliance
Employer of Record services
Ongoing legal and compliance advisory
We act as your long-term Nepal market partner.
To start a business in Nepal, foreign companies must combine correct legal structuring with reliable technical execution. Online businesses benefit the most from Nepal’s cost efficiency, talent pool, and foreign investment protections.
With the right setup, Nepal becomes a scalable, compliant base for global operations. Strategic planning at entry ensures faster growth, easier repatriation, and lower long-term risk.
Planning to start a business in Nepal or launch an online operation?
Book a free consultation with Digital Consulting Ventures to assess the best entry model for your company.
Yes. Foreign investors can own 100 percent equity in most online and IT-enabled service businesses under Nepal’s FDI laws.
FDI company setup usually takes 8 to 12 weeks. Employer of Record hiring can begin within 1 to 2 weeks.
The minimum foreign investment threshold is USD 50,000 for FDI companies. It does not apply to Employer of Record models.
Yes. Nepal allows full repatriation of profits and capital after tax clearance and regulatory reporting.
If you provide taxable digital services in Nepal, VAT registration is required. Export services are usually zero-rated.