Nepal has opened significant pathways for foreign investors, including Non-Resident Nepalis and foreign nationals, to participate in its growing economy. Understanding the correct legal procedures, approval bodies, and regulatory framework is essential before committing capital. This guide outlines the four primary investment routes and their step-by-step procedures.
Key Regulatory Bodies: Department of Industry (DOI) / Investment Board of Nepal (IBN) for approval; Nepal Rastra Bank (NRB) for foreign currency transfers; Office of Company Registrar for business registration; Inland Revenue Department for tax registration.
Method 1: New Industry Investment
Establishing a new business in Nepal as a foreign investor follows a nine-step sequential process:
Obtain foreign investment clearance from DOI/IPBN. Secure certified copies of incorporation documents and tax registration from your home country.
Register the company at the Office of Company Registrar, including obtaining a ward office recommendation and executing a lease agreement for the registered office location.
Complete tax registration at the Inland Revenue Department. Authorized representatives must be present for biometric verification.
Register the industry with DOI. Depending on the sector, environmental compliance documentation may be required.
Establish a bank account at any commercial bank following PAN issuance.
Submit investment remittance notification to NRB in the prescribed format. All currency movements require documentation through established banking channels.
Conduct local business registration and commence operations. If extension is needed, file 30 days before deadline expiration.
Method 2: Technology Transfer Investment
Foreign investors may establish operations through technology transfer arrangements. The transferor and transferee submit a joint application to DOI including:
- Technology transfer agreement
- Industry registration documentation
- Board resolutions and corporate incorporation certificates
- Trademark registration certificates (if trademark transfer is involved)
Method 3: Share Transfer in Existing Industries
Investors must meet the minimum NPR 2 million investment threshold for DOI approval. Two approaches exist:
Existing Shareholder Transfer
Requires share transfer agreements, board minutes approving foreign investor inclusion, financial credibility certification, and current shareholder lists certified by the Company Registrar.
New Share Issuance
Similar documentation, but requests from existing shareholders are replaced by a company authorization letter permitting share issuance to the foreign investor.
Method 4: Loan Investment
When Nepalese enterprises seek foreign financing, they submit a DOI application including the loan agreement, lender incorporation certificates, company profile, board resolutions, audit reports, and tax clearance. The process involves:
- NRB notification with prescribed applications and supporting documentation
- DOI approval and local business registration
- Reserved company name acquisition and documentation compilation
- Tax registration with IRD
- DOI industry registration within 35 days of incorporation
Investment Companies: Key Regulations
Investment companies operating in Nepal under the Nepal Gazette notice (March 2, 2023) must comply with specific restrictions:
- Minimum investment: NPR 1,000,000,000
- Investment only through share capital — not loans or financial instruments
- Activities restricted to permitted sectors under the Industrial Enterprise Act
- Cannot purchase Nepal Stock Exchange shares, invest in securities brokerage, or deal in real estate transactions
- Regulatory oversight by the Department of Industries