In 2025, Nepal introduced a wave of legal and economic reforms aimed at making the country more competitive for foreign investors. These changes directly affect company incorporation in Nepal, with improvements across investment approval, taxation, business licensing, and digital processing.
For foreign businesses evaluating South Asia, these reforms could be the tipping point that makes Nepal not only attractive but also easier and faster to enter. This guide explains what the 2025 reforms mean for foreign company incorporation in Nepal, with practical insights into what’s changed and how it impacts your business planning.
In response to increasing regional competition and investor concerns over red tape, Nepal's government undertook a reform strategy centered around:
Improving its Ease of Doing Business metrics
Aligning more closely with international investment standards
Unlocking new sectors for Foreign Direct Investment (FDI)
Digitalizing business incorporation and tax administration
Accelerating approvals under the Foreign Investment and Technology Transfer Act (FITTA)
These changes were developed through collaboration between the Ministry of Industry, Commerce and Supplies, Nepal Rastra Bank, and the Private Sector Federation of Nepal.
Nepal’s Office of the Company Registrar (OCR) rolled out a fully online portal for:
Name reservation
MOA & AOA submission
Business registration
Digital payment of fees
Impact: Speeds up company incorporation by 30–40% and removes the need for multiple in-person visits.
Under the revised FITTA regulations, the Department of Industry must now process and respond to foreign investment applications within 15 working days.
Impact: Reduces waiting time significantly, especially for small and mid-size foreign investors.
The minimum foreign investment threshold was revised from NPR 20 million (~USD 150,000) to NPR 10 million (~USD 75,000) for select industries like:
IT & BPO services
Renewable energy tech
Agritech
Education platforms
Impact: Opens the door to small and medium international firms that previously couldn’t meet the high capital requirement.
The 2025 reform eliminates mandatory pre-approval for non-restricted sectors, provided the investment is under NPR 50 million and doesn’t involve land purchase or technology transfer.
Impact: Allows faster entry for sectors like software development, consulting, training, and remote services.
Nepal Rastra Bank now provides clear guidelines and timelines for:
Capital inflow reporting
Profit repatriation procedures
Foreign currency account opening
Impact: Increases transparency and predictability for foreign firms managing cross-border cash flow.
New zones were opened in Simara, Nepalgunj, and Itahari, with benefits including:
10-year corporate tax exemption
Duty-free import of machinery and raw materials
Single-window clearance for all business operations
Impact: Enhances competitiveness for foreign manufacturers and export-based businesses.
With online registration and faster FITTA processing, companies can now be incorporated in as little as 2–3 weeks, compared to 6–8 weeks in 2024.
The revised investment threshold opens up Nepal to startups, SMEs, and tech firms that previously could not meet capital requirements.
Liberalization of entry conditions in digital services, green tech, and vocational education gives more freedom to foreign entrepreneurs.
Clearer policies on foreign exchange, capital repatriation, and business operations reduce compliance uncertainty.
| Industry | Benefit from Reforms |
|---|---|
| IT & BPO | Lower capital threshold, fast-track setup |
| Renewable Energy | Easier FITTA approvals, SEZ tax benefits |
| Education & EdTech | Simplified entry for training centers |
| Agro-Tech | Access to leasing land, tax incentives |
| Tourism & Hospitality | SEZ expansion, simplified licensing |
Despite major reforms, some structural issues remain:
Land ownership restrictions for foreigners still apply
Local government offices may lag behind in adopting digital systems
Labor compliance and VAT refunds still require close management
However, these issues are increasingly navigable with the right local partners or accounting advisors.
The 2025 reforms mark a turning point for company incorporation in Nepal, making it more appealing, efficient, and accessible for global businesses. For companies in IT, education, services, and light manufacturing, Nepal now offers a significantly lower-risk and cost-effective platform for entering South Asia.
With simplified approvals, reduced capital thresholds, and digitalized registration, there’s never been a better time for foreign investors to formally establish a presence in Nepal.