Foreign investors often describe the same experience: they know Nepal is open for business, they have a project in mind, and yet the registration process feels like a maze with too many doors. This guide walks through the whole route in plain language, from the first approval to the day your capital is recorded at the central bank, so you can plan with realistic expectations rather than guesswork.
If you would rather have a lawyer run the sequence for you, that is what we do every week. If you want to understand it yourself first, keep reading.
Quick answer: how does FDI registration work in Nepal?
Foreign direct investment in Nepal is registered through five core stages. You obtain industry approval from the Department of Industry (DOI), or from Investment Board Nepal (IBN) for very large projects. You incorporate the company at the Office of the Company Registrar (OCR). You complete tax and local registration. You register the industry at the DOI. Finally, you bring the money in through Nepal Rastra Bank (NRB). The full journey usually takes three to five months, and the legal minimum investment is NPR 20 million (roughly USD 150,000) under the Foreign Investment and Technology Transfer Act, 2075 (FITTA).
| Key fact | Detail |
|---|---|
| Governing law | FITTA 2075 (2019); Foreign Investment and Technology Transfer Regulations, 2077; Companies Act 2063 |
| Minimum investment | NPR 20 million per foreign investor |
| Approval authority | Department of Industry (DOI), or Investment Board Nepal (IBN) for projects above NPR 4 billion |
| Capital regulator | Nepal Rastra Bank (NRB) |
| Typical timeline | Three to five months end to end |
| Investment routes | Equity investment, loan investment, re-investment of profits |
In our practice, most delays come not from the law but from two avoidable places: incomplete documentation at the DOI stage, and banking friction at the NRB stage. Both are manageable when preparation starts early.
What counts as foreign direct investment in Nepal?
Under FITTA, foreign direct investment is money a foreign investor puts into Nepal through one of three routes.
Equity investment. The foreign investor subscribes to shares of a Nepali company. This may be a wholly owned subsidiary or a joint venture with local partners. Most of our clients take this route.
Loan investment. The foreign investor lends to the Nepali company, usually alongside equity. This is common in projects with heavy upfront cost, such as hotels and hydropower, where loan finance smooths the cash flow until revenue begins.
Re-investment. Profits earned in Nepal are put back into the same business or another qualifying industry rather than taken out. This keeps capital working locally and can support expansion without a fresh inbound remittance.
FITTA also covers technology transfer agreements, including licensing, management contracts and franchise know-how, which can be registered alongside an equity investment.
Who qualifies as a foreign investor?
The definition is wide. It covers foreign citizens, foreign companies, firms and organisations. It includes Non-Resident Nepalis holding NRN citizenship or an NRN card under the relevant rules. Indian nationals and Indian companies follow the same FITTA pathway as everyone else; the India-Nepal trade and transit arrangements affect the banking logistics, not the approval route itself.
Where foreign investment is restricted
Nepal maintains a negative list, which bars foreign investment in certain activities. It includes primary agriculture, real estate outside specified construction development, retail business below certain thresholds, internal courier services, local catering, money changing and remittance services, and travel and guide services, among others.
The list is not static. It shifts with each Finance Act, so we verify the current position against the latest law before any filing. If you have a sector in mind and you are not sure whether it is open, that is usually the first question worth answering. It is far cheaper to check than to discover the conflict after you have incorporated a company around the wrong activity.
The FDI registration process, step by step
This is the sequence we follow for a typical wholly owned subsidiary. Each step builds on the last, so the order matters.
Step 1: Name reservation and preliminary structuring
Before anyone approaches the DOI, we reserve the proposed company name at the OCR and settle three things: the shareholding structure, the scope of the industry, and the registered address. This stage is short but important. The DOI approves your project, the OCR registers your company, and the two documents have to describe the same business. Getting the industry classification right now prevents rework later.
Timeline: two to three days for name clearance.
Step 2: Application for foreign investment approval
The application is filed online through the DOI system, or with IBN for large projects. The file typically includes a project report covering market, technical and financial aspects with a funding plan and implementation schedule, passport and bio-data of the investor and directors, the investing entity's incorporation documents (apostilled or notarised, and translated where needed), a board resolution authorising the Nepal investment, a financial credibility letter from the investor's bank, a power of attorney appointing a Nepal-based representative, and, where relevant, a joint venture agreement.
Timeline: one to two weeks for screening. The approval certificate issues once the DOI is satisfied the project meets FITTA criteria.
Step 3: Company incorporation at the OCR
With the FDI approval in hand, the company is incorporated under the Companies Act, 2063. You file the memorandum and articles of association in the prescribed format, pay registration fees calculated on authorised capital, and receive the certificate of incorporation.
Timeline: about one week after a complete filing.
Step 4: Tax and local registration
The company obtains a Permanent Account Number from the Inland Revenue Department, registers for VAT where turnover thresholds apply, then registers with the local ward office and obtains a recommendation from the local level.
Timeline: about one week combined.
Step 5: Industry registration at the DOI
The company then registers the industry itself at the DOI, classified as small, medium or large scale depending on fixed capital. This step is what unlocks later benefits, including tax incentives and repatriation facilities tied to the approved project.
Timeline: one to two weeks.
Step 6: Non-blacklisting certificate
A non-blacklisted certificate from the Credit Information Bureau confirms that neither the investor nor the company carries a history of defaulted loans. Banks will ask for it at the capital injection stage, so it is worth obtaining in good time.
Step 7: NRB approval and capital injection
This is the step investors most often underestimate. To bring funds in, you open a corporate bank account, apply through the commercial bank to NRB for approval to remit the investment, remit the money through formal banking channels with the purpose stated as share or loan investment, and obtain the NRB remittance record.
That record matters more than people realise. It is the proof that your capital entered Nepal lawfully, and it is what allows you to repatriate profits and sale proceeds years later. Every rupee of capital should enter through banking channels with correct documentation. Investors who skip proper NRB recording frequently run into serious obstacles when they eventually want to take money out.
Timeline: two to four weeks depending on the bank.
Step 8: Post-registration compliance
After capital injection, the company settles into ongoing compliance: annual general meetings and OCR filings, tax returns, industry renewal where applicable, social security fund registration for employees, and sector-specific licences such as tourism, IT-enabled services or manufacturing standards.
How long the process really takes
| Stage | Realistic duration |
|---|---|
| Name clearance and structuring | Three to five days |
| DOI or IBN FDI approval | Two to six weeks |
| Company incorporation | One week |
| PAN, VAT and ward registration | One week |
| Industry registration | One to two weeks |
| NRB approval and capital injection | Two to four weeks |
| Total | Three to five months |
These timelines assume complete documentation. Apostille or consular legalisation of home-country corporate documents frequently adds two to four weeks if it is not started early, which is why we begin that paperwork in parallel with everything else.
What it costs
Government fees depend on authorised capital and industry scale, and the registration fee slabs under the Companies Act and DOI schedules change with each Finance Act. Beyond government fees, budget for document apostille and notarisation, certified translations, and professional fees. We provide a written fee estimate once we have reviewed the project structure, so you can see the full picture before committing.
Where FDI applications get stuck
From files we have reviewed and remediated, the same problems recur.
A weak project report. Thin market sizing, unrealistic financial projections, or a mismatch between the declared scope and the actual activity will stall approval.
Credibility gaps. Bank letters that do not meet the DOI's expectations on format or recency are a common and avoidable hold-up.
A negative-list conflict. Proposing an activity that falls within the restricted list without realising it wastes months.
Structure mismatches. Shareholding recorded in the memorandum that does not match the FDI approval creates problems at incorporation and later at banking.
Banking channel errors. Remitting funds before NRB recording, or through informal channels, puts your future repatriation rights at risk. This is the single most expensive mistake we see.
Frequently asked questions
What is the minimum FDI amount in Nepal? NPR 20 million per foreign investor under FITTA 2075. This applies to equity investment, and the amount must come in through formal banking channels.
Can a foreigner own 100% of a company in Nepal? Yes, in most sectors. FITTA permits wholly foreign-owned companies, except in sectors on the negative list or where specific laws require local participation.
How long does the FDI process take? Realistically three to five months from name clearance to recorded capital injection, assuming the documents are ready when filings begin.
Do Indian investors follow a different process? No separate approval track exists. Indian investors use the same DOI or IBN route. The practical differences show up in banking documentation under the India-Nepal treaty arrangements.
Can profits be repatriated out of Nepal? Yes. FITTA guarantees repatriation of profits, dividends and sale proceeds, provided the original investment was properly recorded with NRB. This is exactly why the NRB discipline in Step 7 matters so much.
Is physical presence in Nepal required? Not for the registration stages. A power of attorney lets a Nepal-based lawyer file on your behalf. In most cases, directors will need visit visas for banking formalities and operations.
What happens if my sector is on the negative list? It cannot be approved for full foreign ownership. Sometimes the activity can be restructured to fall outside the restricted category, or handled through a different structure. This is worth checking before you commit capital.
How much capital must I bring in at once? The approved investment is not always required in a single transfer. Depending on the approval and the project, capital can be brought in stages, and we map that schedule during structuring.
How Pluto Associates can help
We have guided foreign investors through Nepal's FDI regime since 2019, from DOI approval through incorporation, NRB capital recording and annual compliance. Our team works in English and Nepali, provides fixed-scope fee proposals, and gives you a single point of contact from first consultation to first dividend.
If you would like a clear view of how this applies to your own project, contact our team for a consultation, message us on WhatsApp, or call +977 9802356987. We will tell you what is possible, what it costs, and how long it takes.
Sources: Foreign Investment and Technology Transfer Act, 2075 (2019); Foreign Investment and Technology Transfer Regulations, 2077; Companies Act, 2063; Department of Industry (doi.gov.np); Nepal Rastra Bank (nrb.org.np). Figures such as fees and USD conversions are indicative and subject to change, so verify current rates before filing.