Foreign Direct Investment (FDI) in Nepal is regulated and promoted under the Foreign Investment and Technology Transfer Act, 2019 (FITTA). The Government of Nepal has taken significant steps to attract foreign investment across various sectors, offering incentives, simplified procedures, and legal protections to foreign investors.
At Common Law Chambers, we provide end-to-end legal advisory and compliance services to international investors looking to establish or expand their business in Nepal.
Nepal, a country of immense natural beauty and strategic location between India and China, is increasingly becoming a destination for global investors. With political stability, improving infrastructure, and a liberal investment regime, Foreign Direct Investment (FDI) in Nepal is gaining momentum across sectors like energy, tourism, agriculture, and Information Technology Sector
This guide offers a comprehensive, humanized overview of Nepal’s FDI landscape in 2025 covering legal frameworks, registration procedures, priority sectors, incentives, and challenges.
FDI is governed by:
Foreign Investment and Technology Transfer Act (FITTA), 2019
Foreign Investment and Technology Transfer Regulations, 2021
Industrial Enterprises Act, 2020
Company Act, 2006
Public-Private Partnership and Investment Act, 2019
These laws ensure transparency, investor protection, and streamlined procedures.\
| Authority | Role |
|---|---|
| Department of Industry (DoI) | Handles FDI below NPR 6 billion |
| Investment Board Nepal (IBN) | Manages FDI above NPR 6 billion |
| Office of Company Registrar (OCR) | Registers companies |
| Nepal Rastra Bank (NRB) | Regulates foreign currency and repatriation |
Nepal offers 100% foreign ownership in most sectors. Priority areas include:
Hydropower and renewable energy
Tourism and hospitality
Agriculture and agro-processing
Information and Communication Technology (ICT)
Manufacturing and industrial parks
Education and health services
Infrastructure and transport
Some sectors like media, defense, and small-scale retail are restricted or require joint ventures.
Step 1: Submit FDI Proposal
Prepare a detailed investment proposal
Submit to DoI (below NPR 6 billion) or IBN (above NPR 6 billion)
Step 2: Company Registration
Register your business at the Office of Company Registrar
Choose structure: Pvt. Ltd., Public Ltd., or Branch Office
Step 3: NRB Approval
Apply to Nepal Rastra Bank for foreign currency inflow approval
Open a foreign currency account in a Nepali bank
Step 4: Investment Inflow
Transfer investment amount via banking channels
Submit proof to DoI/IBN
Step 5: Tax Registration
Obtain PAN/VAT from Inland Revenue Department
Register with Social Security Fund if hiring employees
Step 6: Project Implementation
Start operations, hire staff, and begin production or service delivery
| Sector | Minimum Investment |
|---|---|
| General business | USD 50,000 |
| Technology transfer | USD 200,000 |
| Consultancy or services | USD 100,000 |
| Joint ventures | Negotiable based on equity share |
Nepal offers several benefits to attract FDI:
Tax holidays for up to 10 years in priority sectors
Customs duty exemptions on machinery and raw materials
Repatriation rights for profits, dividends, and capital
Visa and work permits for foreign staff
Land lease options in industrial zones
Over NPR 30 billion approved in hydropower and tourism
China, India, South Korea, and UK among top investors
ICT and fintech sectors growing rapidly
IBN approved 15+ large-scale projects in 2025
Despite improvements, investors may face:
Bureaucratic delays in approvals
Land acquisition issues
Infrastructure gaps in rural areas
Regulatory overlaps between agencies
Limited dispute resolution mechanisms
The government is working to address these through digital portals and policy reforms.
Hire a local legal advisor or consultant
Ensure all documents are notarized and translated
Choose a reliable banking partner for fund transfers
Understand labor laws and SSF obligations
Engage with local chambers and business councils
Nepal’s FDI regime in 2025 is more open, transparent, and investor-friendly than ever before. With abundant natural resources, a young workforce, and improving infrastructure, the country offers immense potential for long-term investment.
Whether you're entering hydropower, tourism, agriculture, or tech, understanding the FDI laws and procedures in Nepal is the key to unlocking sustainable growth and regional impact.
