FDI in Nepal means foreign direct investment made by a foreign investor in an industry or business in Nepal in accordance with Nepalese law. Foreign investors may invest in sectors that are legally open to foreign investment, subject to applicable approvals, restrictions, licensing requirements and investment procedures. The Department of Industry is the principal government agency for many foreign investment approvals and related services. Nepal's foreign investment framework also provides national treatment and a one-stop service mechanism for eligible foreign investors.

For general foreign investment in Nepal, the Government of Nepal has prescribed a minimum foreign investment threshold of NPR 20 million, subject to applicable law and exceptions. However, this should not be confused with eligible IT/ICT investments approved through the Automatic Route, for which the Department of Industry states that there is no minimum investment threshold.

Yes, for eligible IT-sector foreign investment under the Automatic Route, there is no minimum investment threshold. The Government of Nepal introduced the Automatic Route for specified sectors, and the Department of Industry specifically states that investors seeking to invest in the IT sector through the Automatic Route are not subject to the general NPR 20 million minimum threshold. The business must, however, fall within the eligible IT/ICT activities and satisfy the applicable legal and registration requirements.

An eligible IT/ICT foreign investment can be approved through the Automatic Route without the general NPR 20 million minimum threshold, provided the proposed activity falls within the eligible Automatic Route category and all applicable requirements are satisfied. This does not mean that every type of technology business automatically qualifies; the exact business activity should be checked against the applicable Automatic Route sector and sub-sector classification.

The Automatic Route for FDI in Nepal is a foreign investment approval mechanism under which eligible investments do not require prior conventional approval from the Department of Industry. According to the Department of Industry, an investor can submit the required application through the online system and obtain the FDI approval certificate after the application is processed under the Automatic Route.

The eligible IT/ICT activities depend on the Government of Nepal's applicable Automatic Route sector and sub-sector classification. Therefore, an investor should identify the precise proposed business activity rather than relying only on a general description such as “IT company.” The Department of Industry's Automatic Route framework should be checked before filing the FDI application.

A foreign investor may establish a fully foreign-owned company in Nepal where the relevant sector is open to foreign investment and the applicable legal requirements are satisfied. The Office of the Company Registrar expressly provides for companies established with foreign shareholders and full foreign investment, subject to the required foreign investment approval and supporting documents. Sector-specific restrictions may apply.

Depending on the investment structure and investor, FDI approval generally requires documents such as the online investment application, project proposal, passport or corporate documents of the foreign investor, and other documents applicable to the proposed investment. For a joint venture, the Joint Venture Agreement and relevant documents of the local partner may also be required.

A typical FDI registration process in Nepal involves identifying an eligible sector, applying for foreign investment approval through the applicable Department of Industry process, incorporating the Nepalese company where required, registering the industry, completing tax/PAN formalities and complying with sector-specific licensing and reporting requirements. For eligible Automatic Route investments, the approval process is handled through the designated online system.

Yes. After obtaining foreign investment approval and incorporating the company, the investor generally needs to register the industry with the Department of Industry where the proposed activity is an industry requiring such registration. The Department of Industry states that after foreign investment approval, the industry is required to be registered with the DOI within the prescribed period.

Yes. A foreign investor can establish a Private Limited Company (Pvt. Ltd.) in Nepal, subject to foreign investment approval and applicable company and sector laws. The Office of the Company Registrar provides specific requirements for companies having foreign citizens or foreign companies as founders or shareholders.

Under the company registration information published by the Office of the Company Registrar, a Private Limited Company can have at least one shareholder and up to 101 shareholders. A public limited company generally requires at least seven founder shareholders, subject to the applicable law and exceptions.

A Pvt. Ltd. company in Nepal is a private company incorporated under the Companies Act, 2063. It is a commonly used structure for operating a business, including eligible businesses with foreign investment, subject to FDI approval and other applicable regulatory requirements.

Yes. A foreign individual or foreign legal entity may become a shareholder of a Nepalese company where foreign investment is permitted and the required foreign investment approval has been obtained. The Office of the Company Registrar requires additional documentation for foreign founders or shareholders, including passport or corporate incorporation documents and evidence of authorization to invest in Nepal.

The Office of the Company Registrar states that, for company registration, the minimum authorized capital is NPR 100,000, with the applicable registration revenue stated on its FAQ page. This company-law requirement should not be confused with the separate minimum FDI threshold applicable to foreign investment. Eligible IT/ICT Automatic Route FDI may be exempt from the general NPR 20 million FDI threshold.

Yes. A Public Limited Company in Nepal can be incorporated under the Companies Act, 2063, subject to the statutory requirements. The Office of the Company Registrar states that a public company generally requires at least seven founders and paid-up capital of at least NPR 10 million, subject to applicable legal provisions.

A Private Limited Company is generally suitable for privately held businesses, while a Public Limited Company is subject to additional statutory requirements and is structured for public participation under the Companies Act. The Office of the Company Registrar identifies Private Limited and Public Limited companies as different forms of companies under Nepalese company law.

The Office of the Company Registrar provides an online company registration process involving obtaining a username and password, proposing a unique company name and objective, obtaining name approval, and submitting the Memorandum of Association, Articles of Association and other required documents. For foreign-invested companies, additional FDI approval and foreign shareholder documentation are required.

Yes. Nepal's Department of Immigration provides a Business Visa for investors and businesspersons investing in or undertaking business in Nepal. The visa application requires the prescribed documents, including the applicable recommendation and foreign investment/company documentation. Approval is subject to the requirements of the Department of Immigration and other concerned authorities.

An eligible FDI investor can apply for a Business Visa in Nepal after satisfying the prescribed requirements. However, it should not be advertised as an automatic or guaranteed visa. The Department of Immigration requires documents including a Department of Industry recommendation, Foreign Investment Acceptance Letter, company registration certificate, PAN/VAT certificate, industry registration certificate and other applicable documents.