Foreign direct investment in Nepal for a new private limited company follows a linked sequence: confirm that the proposed activity is open to foreign investment, obtain the appropriate investment approval, notify the banking system before remittance, incorporate the company, record the inward investment with Nepal Rastra Bank (NRB), and then complete PAN and activity-specific registrations. Incorporation alone does not complete the foreign-investment route.
Key highlights
- The usual current minimum is NPR 20 million (NPR 2 crore) per foreign investor; DOI guidance states that IT projects on the automatic route have no minimum. Confirm the threshold before committing funds because it is set by Gazette notice.
- The intended activity must be checked against the foreign-investment negative list before documents are prepared or funds are committed.
- DOI ordinarily approves investment up to NPR 6 billion; Investment Board Nepal handles investment above that amount. Eligible notified sectors can use DOI’s automatic route.
- Before remittance, notify NRB’s Foreign Exchange Facilitation Unit in the prescribed format. After the funds arrive, apply to record the investment within six months.
- Keep the approval, bank inflow and NRB recording chain complete. It is central to a clean future repatriation process.
What counts as foreign direct investment in Nepal
Nepal’s Foreign Investment and Technology Transfer Act, 2019 (FITTA) defines foreign investment broadly. It includes equity subscribed in foreign currency, reinvested Nepal-earned dividends, machinery or equipment brought in as share investment, lease financing, specialised investment-fund units, certain listed-company investment, purchase of existing-company shares or assets, and securities issued abroad by a Nepal-incorporated company. Technology transfer without equity is a related but separate route. FITTA, section 3.
This guide concerns a new equity investment in a Nepalese private company. It is different from a foreign company’s branch or liaison-office route. A foreign-invested subsidiary is a separate Nepalese company; a branch conducts the foreign company’s business in Nepal on a specific project or contract basis; a liaison office cannot trade or earn income. If a foreign company does not want a Nepalese subsidiary, consider the separate branch and liaison office registration route instead.
Check eligibility before structuring the investment
Foreign investment is generally permitted outside the restricted list, but the exact business activity not merely the company’s label must be tested.
The DOI’s current investor guidance identifies restrictions covering primary agricultural production except qualifying export-oriented large industries; cottage and micro industries; personal-service businesses; weapons-related production; real-estate business other than construction; retail, internal courier, local catering, money-changing and remittance services; specified tourism activities; national-language mass media and motion pictures; and listed professional consultancy and training services. It also describes restrictions added for foreign ownership of ride-sharing/aggregator platforms and airline operators. DOI FDI investor guideline; DOI Gazette notices.
If the activity is restricted for direct equity investment, do not assume that a different company object or branding solves the issue. FITTA can allow technology transfer into some existing Nepali-owned industries, but that is a narrower route and not a substitute for a permitted equity investment.
Minimum investment and the route-choice decision
The minimum foreign-investment amount is set by government notice, not fixed in FITTA itself. The supplied Nepal Gazette notice and DOI guideline state a current minimum of NPR 20 million (NPR 2 crore) per foreign investor. The DOI guideline states that IT projects on the automatic route have no minimum. A narrow exception applies to an NRN individual investing through a Government-of-Nepal/NRN jointly established investment company, subject to that vehicle’s conditions. Nepal Gazette notice, 2079 Kartik 28; DOI FDI investor guideline.
Because the minimum is notice-based and has changed before, confirm it with DOI before money is committed.
| Approval route | Responsible authority | When the route applies |
|---|---|---|
| Ordinary foreign-investment approval | DOI, Foreign Investment and Technology Transfer Section | Investment up to NPR 6 billion outside notified automatic-route sectors, or where a reviewed application is used |
| Automatic route | DOI through the IMIS portal | Investment in a notified automatic-route sector; still subject to the negative list and applicable minimum/IT exception |
| Large investment route | Investment Board Nepal | Investment exceeding NPR 6 billion |
Source: FITTA, section 17, FITTA, section 42, and the DOI investor guideline.
The automatic route removes the prior case-by-case review for an eligible notified sector; it does not remove the negative list, the NRB notification before remittance, the NRB recording after inflow, incorporation, tax registration or sector approvals. A 2026 notice expanded the automatic route to 102 sub-sectors across seven categories and removed an earlier NPR 500 million ceiling. DOI Gazette notices.
Prepare investor documents and project information
Build the application around a consistent project proposal: activity, ownership, investment amount, business model and investor identity should align across investment, incorporation and bank documents.
| Investor type | Key documents identified by DOI |
|---|---|
| Individual investor | Notarised passport copy, bio-data, and notarised Financial Credibility Certificate issued by a bank in the home country |
| Corporate investor | Notarised certificate of incorporation; memorandum and articles; board decision approving Nepal investment; shareholder/ultimate beneficial-owner details; company profile |
| All applicants | Colour-scanned project proposal; joint-venture agreement if more than one investor |
| Conditional filing document | Power of attorney where another person files on the investor’s behalf |
Source: DOI FDI investor guideline and document checklist.
For an automatic-route portal application, the initial uploads are narrower, but later incorporation and banking stages need additional evidence. Prepare for a document sequence rather than a single submission.
FDI registration process: approval to operations
- Confirm eligibility and select the approval route. Check the negative list, automatic-route list, investment size and the current minimum before finalising the project documents.
- Apply for foreign-investment approval. Use DOI’s IMIS route where eligible, or the relevant reviewed DOI or Investment Board process. FITTA, sections 15 and 42.
- Notify before remitting funds. Once approval is granted, notify NRB’s Foreign Exchange Facilitation Unit in the prescribed format. NRB prior approval is not required to bring the approved investment in, but the notice and receiving-bank document check are part of the route. NRB Foreign Investment and Foreign Loan Management Bylaw, Bylaw 4.
- Incorporate the Nepalese company. DOI’s published process flow places company registration with OCR after FDI approval and before NRB records the actual inflow. DOI FDI process flow.
- Record the actual investment with NRB. Apply within six months after the approved foreign currency arrives, using the bank’s inflow certificate and the required supporting records. NRB aims to issue the recording certificate within seven working days of a complete application. NRB Bylaw, 2078, Bylaw 5.
- Complete tax registration. Register for PAN and, if the activity requires it, VAT before beginning operations. Inland Revenue Department.
- Complete the activity-specific route. Industry registration, environmental permissions and sector licences can be separate requirements for a manufacturing, food, tourism or other regulated project.
If an approved investor or representative needs to be in Nepal for setup or operation, the DOI can issue a visa recommendation under FITTA section 30(2); the immigration application then remains a separate step. DOI service charter. Business visa support in Nepal addresses that separate immigration process.
Costs and timing: plan for the full chain
Government fees are charged separately by DOI, OCR and IRD according to the filing and capital/applicant position. Professional fees, if any, are separate agreed costs. A single total does not apply across every investment, authority and activity-specific stage.
DOI’s service charter gives a seven-working-day internal target from a complete application for a new FDI approval, while NRB aims to issue the recording certificate within seven working days of a complete application. These are administrative targets, not guarantees. Incorporation, PAN registration and any sector licence sit in addition, so a straightforward automatic-route investment can still take several weeks from a complete starting file to an operating, tax-registered company. DOI service charter; NRB Bylaw, 2078, Bylaw 5.
Keep the investment record ready for future repatriation
FITTA permits repatriation in convertible foreign currency for share-sale proceeds, profit or dividend, liquidation balance, technology-transfer royalty, lease rent and legal compensation. FITTA, sections 20 and 26.
For the route described here, the practical sequence is:
- Obtain DOI’s repatriation recommendation under section 20(2).
- Apply to the licensed commercial bank where the investment is recorded for the foreign-exchange facility.
- Provide the bank’s required records, including tax-clearance evidence where applicable.
DOI’s charter gives a seven-working-day target for the recommendation. NRB’s Fifth Amendment allows the recording bank to grant the facility directly on DOI’s approval or recommendation within 15 working days of a complete application. NRB prior approval is needed where the funds are to be sent to an account in a country other than the country from which the original investment came. Applicable taxes are not waived by repatriation. DOI service charter; NRB Bylaw, 2078, Bylaw 6.
This is why the initial approval, remittance record and NRB recording certificate should be treated as a single evidence chain and retained carefully.
Common mistakes to avoid
- Testing a broad business label instead of the exact activity. Retail, courier and professional-service examples show why the negative list must be read against the actual operations.
- Treating automatic approval as exemption from the rest of the route. It does not remove banking, company, tax or sector requirements.
- Missing the six-month NRB recording window after funds arrive. The recording step is separate from the initial approval and is central to later repatriation.
- Assuming incorporation means the business can trade. PAN, conditional VAT registration and sector-specific approvals still follow.
- Planning an NRN route from an exception that does not apply. The stated minimum exception is narrow and conditional.
FDI readiness checklist
- Define the exact activity, ownership structure and investment amount.
- Check the negative list and automatic-route eligibility against that activity.
- Confirm the current minimum investment and responsible approval body.
- Assemble the individual or corporate investor documents, project proposal and joint-venture agreement where applicable.
- Complete the approved remittance notification before funds are sent.
- Incorporate the Nepalese company after approval.
- Preserve bank inflow evidence and apply to NRB within six months of the investment inflow.
- Complete PAN, any applicable VAT registration, industry registration and sector approvals before operations.
How Company Darta Nepal can help
Foreign investment is easy to delay when eligibility, investor documents, project papers, bank evidence and authority sequencing are handled separately. Company Darta Nepal can help assess the investment route, prepare the agreed investor and project documentation, and coordinate the agreed DOI, OCR and NRB steps. For a useful first discussion, prepare the intended activity, investor identity and ownership details, proposed investment amount, project summary and any available corporate records.
Review Company Darta Nepal’s foreign direct investment service to discuss the appropriate support scope. Company Darta Nepal does not decide or guarantee investment approval, investment acceptance, visa issuance or repatriation; those decisions remain with the relevant authorities and bank.
