Automatic Route of FDI in Nepal: What Changed and How to Use It
Since Nepal expanded the automatic route in early 2026, a large share of foreign investment applications no longer need a manual review meeting. That change has cut weeks off the process for investors who plan properly, and left others confused about which route applies to them. This guide explains the automatic route in plain terms: who qualifies, what the thresholds are, which sectors still need the manual path, and how to file without stalling.
What the automatic route actually means
The automatic route is a self-declaration pathway administered by the Foreign Investment and Technology Transfer (FITT) unit at the One Stop Service Centre. When your application qualifies, the unit confirms compliance against published criteria instead of convening a committee review. Approval is typically issued within seven working days of a complete filing.
It is worth being precise about what "automatic" does not mean. It does not mean no approval. You still need an approval letter before you incorporate the company, and you still need the Nepal Rastra Bank recording before you can repatriate. What it removes is the committee step and the associated waiting time.
Who qualifies for the automatic route
Three conditions generally place an application in the automatic category:
- The investment falls within the minimum threshold for your sector. For most sectors this is NPR 20 million. For information technology and digital services, there is no minimum.
- The proposed business sits outside the negative list in the FITTA schedule. Retail trade below certain sizes, personal services, arms and ammunition, and real estate trading remain restricted.
- The investment is structured as equity in a company registered in Nepal, rather than as a loan or a branch office arrangement.
If all three hold, the FITT unit processes the application under the automatic pathway. If any one fails, the manual route applies.
What still requires the manual route
Several common situations push an application into manual review regardless of amount:
- Investment above NPR 500 million, which routes through Investment Board Nepal rather than the Department of Industry.
- Acquisition of shares in an existing Nepali company rather than subscription to a new one, which requires valuation.
- Sector-specific restrictions where the negative list permits investment only with prior conditions.
- Technology transfer arrangements bundled with equity, where the terms need substantive review.
The practical effect is that most first-time investors setting up a new IT, consulting, services or light manufacturing company can use the automatic route, while larger industrial projects and share acquisitions should plan for the manual timeline.
The filing process step by step
The automatic route process runs as follows:
- Confirm sector eligibility against the FITTA negative list and the minimum threshold for your sector.
- Prepare the investment commitment documents: notarised certificate of incorporation, memorandum and articles of association of the foreign parent, board resolution authorising the investment, and passport or citizenship copies of individual investors.
- File online through imis.doind.gov.np with the FITT unit at the One Stop Service Centre.
- Receive the FDI approval letter, typically within seven working days of a complete submission.
- Incorporate the Nepali company at the Office of the Company Registrar through the CAMIS portal within three working days of approval.
- Register for PAN and, where applicable, VAT at the Inland Revenue Office.
- Register the industry with the Department of Industry.
- Open a corporate bank account and remit the investment through the formal banking channel.
- Record the investment with Nepal Rastra Bank.
Steps five through nine follow the same sequence whether you came through the automatic or manual route. The time saving happens entirely at step four.
A worked example
Consider a software company in Kathmandu. The foreign parent in Singapore commits NPR 25 million, comfortably above the general threshold and entirely outside the negative list. The parent is a private limited company with two directors.
Under the automatic route, the FITT unit reviews the filing against published criteria. If the documents are complete and the sector is clear, the approval letter issues in about a week. The Nepali subsidiary is incorporated on CAMIS within three working days, PAN and VAT registration follow in the same week, and the Singapore parent remits the capital through its bank. The NRB recording completes shortly after.
The whole sequence, from filing to a funded and registered company, typically runs four to six weeks when nothing stalls. Under the manual route with a committee review, the same sequence would commonly run eight to twelve weeks.
Common mistakes that cause delays
The most frequent cause of delay is a mismatch between the investment commitment and the remittance. If the approval letter states NPR 25 million and the first remittance is NPR 18 million, the NRB recording cannot complete until the gap is explained or the approval is amended. State the full commitment in the filing and remit in a single transfer where possible.
The second common issue is incomplete notarisation. Documents executed outside Nepal generally need notarisation in the country of origin, and for countries outside the Hague Apostille Convention, legalisation through the Nepal Embassy. Start that process before you file, not after.
The third is assuming the approval letter has no expiry. It does. Work to the stated validity period and incorporate well inside it.
What this means for your entry strategy
If you are weighing Nepal as a market, the automatic route materially changes the arithmetic. A services or IT operation with a modest capital commitment can now be approved in days rather than months, which makes a phased entry far more practical than it was. For larger industrial projects, the manual route still applies, but the surrounding steps are now more streamlined than they were even two years ago.
Either way, the sequence matters more than the speed. Filing in the right order, with complete documents, is what keeps the timeline short.
If you are planning an investment and want to confirm which route applies to your situation, our team can review your structure before you file. We handle FITT applications, company incorporation, and NRB recording as a single engagement, so nothing stalls between steps. Talk to us on WhatsApp at +977 9802356987, call +977 9802356987, or send a note through our contact page and we will reply within one working day.
Frequently asked questions
Does the automatic route apply to every sector?
No. It applies to sectors outside the FITTA negative list that also meet the minimum threshold for your activity. Retail trade, personal services, arms, ammunition and certain real estate activities remain outside it.
Is there a minimum investment for IT companies under the automatic route?
There is no minimum investment amount for information technology and digital services companies. Other sectors generally require NPR 20 million.
How long does approval take under the automatic route?
A complete filing is typically confirmed within seven working days. Incomplete filings are returned rather than processed, so document preparation matters.
Can I incorporate before receiving FDI approval?
No. The approval letter must be issued before incorporation at the Office of the Company Registrar. Incorporating first and seeking approval afterwards creates a structure that cannot be recorded with Nepal Rastra Bank.
Does the automatic route apply to share acquisitions in existing companies?
Generally no. Acquiring shares in an existing Nepali company requires valuation and typically follows the manual route.
What happens if my remittance is less than the approved amount?
The NRB recording cannot complete against a short remittance. Either remit the balance or seek an amendment to the approval before attempting to record the investment.
Is the automatic route available to investors from any country?
Yes. There is no country-of-origin restriction under the automatic route. Country-specific treaties, such as double tax avoidance agreements, may affect your tax position but not your eligibility for the route itself.
Can I use the automatic route for a branch office?
No. Branch and liaison office registrations follow their own pathways and are not covered by the automatic equity investment route.