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FDI Support by BizSewa

Foreign Direct Investment, Nepal

We help you invest in Nepal, undertaking the legal and other aspects regarding FDI in Nepal. We help you with document preparation, proxy services, getting approval from the Department of Industry, comply environmental regulations, company updates, submissions, and all other services related to foreign investment in Nepal. Furthermore, we will be with you before, during, and after registering your business in Nepal.

Market Research

If you are willing to invest in any allowed sectors and industries of Nepal or want to expand your business here in Nepal, our team can provide in-depth market research for your product and services.

Registration

We carry out all types of registration and affiliation for foreign companies and individuals willing to start a business in Nepal. The team of our expert professionals will craft the documents with top precision and help you apply in the related departments.

Post Registration services

We provide all services needed by businesses. You don't need to visit different agencies and service providers like HR management, IT, marketing and so one. Get the luxury of getting all business related services under one roof.

Minimum Threshold for Foreign Investment Approval:  200,000 USD (~Nrs. 2 Crore) per investor

Foreign investment scenario in Nepal

Nepal is a small landlocked country located in South Asia, between India and China. It has a population of about 29 million people and is known for its natural beauty, including the Himalayas, which contain some of the highest mountains in the world, including Mount Everest. Nepal is also rich in cultural and religious diversity.

Foreign investment in Nepal has been limited in the past, due in part to the country’s challenging political and economic environment. However, the government has taken steps in recent years to encourage foreign investment and create a more business-friendly environment. Some sectors in which foreign investment is particularly welcome include hydropower, tourism, hospitality, and manufacturing.

There are several challenges to foreign investment in Nepal, including a lack of infrastructure, a limited pool of skilled labour, and a challenging regulatory environment. Additionally, the country has a relatively small domestic market, which can make it difficult for businesses to achieve economies of scale.

Despite these challenges, Nepal offers countless advantages for foreign investors. These include a low cost of living, a relatively stable political environment, and a strong tradition of entrepreneurship. Additionally, the country’s location between India and China makes it an attractive gateway to these two large markets.

Overall, Nepal presents both opportunities and challenges for foreign investors. Those who are willing to navigate the challenges and are committed to the long-term development of the country may be able to find success in Nepal.

Forms of Foreign Investment

Investment in share (Equity) (a)

Reinvestment of the earnings derived from the clause (a) above

An investment made in the form of loan or loan facilities

Foreign Equity Investment in a New Industry

(Documents required for investment in one of the allowed industry)

Foreign Investment in an Existing Industry by Share Transfer

(Documents required for transfer of share)

Technology Transfer

Technology transfer is possible even in areas where foreign investment is not allowed.

Forms of “Technology Transfer”

Use of any technological right, specialization, formula, process, patent or technical know-how of foreign origin

Use of any trademark of foreign ownership

Acquiring any foreign technical consultancy, management and marketing service

Technology Transfer Agreement (TTA)

(Documents required for transfer of Technology)

Provisions under Income Tax Act

Entity: If incorporated in Nepal the entity is Resident Entity.

Foreign Permanent Establishment:  the place from where services are being performed by installing machinery, equipment or providing consultancy for more than 90 days either continuously or intermittently in Nepal. The term also includes agency business except independent agent. 

Double Tax Avoidance Treaty is done with various countries which helps for avoidance of double taxation on global income.

Areas Not Allowed for Foreign Investment in Nepal

(Please check whether your core service/product falls in either of the categories or not)

Government Agencies of Nepal related to FDI process

SN

Agencies

Major Functions

a.

Ministry of Industry, Commerce, and Supplies

Formulate policies and laws regarding FDI

b.

Industry and Investment Promotion Board

Provide consent to industries that require permission

c.

Investment Board of Nepal

Approve the foreign investment exceeding NRs. 6 billion and provide other facilitation

d.

Department of Industry (One Stop Service Center)

Approve the foreign investment not exceeding NRs. 6 billion and provide industry administration related services

e.

Office of Company Registrar

Register company and provide administration related services

f.

Nepal Rastra Bank (Central Bank of Nepal

Provide approval for bringing in foreign currency against approved investment, recording, and repatriation

Business Visa after FDI in Nepal

Foreign investors or his/her authorized representative and family members shall receive business visa after they obtain approval for foreign investment as long as their investment exists. They should apply for visa extension to Department of Industry 1 month prior to expiry of their Visa. And, they have to attend in person when they apply for the first time for Visa.

Documents Required for the Business Visa processing in Nepal along with the Application

  1. Notarized copy of passport with the latest Visa
  2. Letter of Foreign Investment Approval from the Department of Industry
  3. Copy of Industry/Company Registration Certificate
  4. In case of Industry in operation, report of industry inspection
  5. Notarized copies of Letter of Authorization as a Representative of foreign investor and passport
  6. Notarized document of the relation with the dependents
  7. Contact address and telephone number of the investor/representative

Documents Required for the Non-Tourists Visa for Foreign Workers along with the Application

    1. Notarized copy of Agreement between labourer and industry
    2. Copy of the notice published in the national daily newspaper
    3. Progress Report of the industry
    4. Labourer’s Bio-Data (showing his/her experience in the industry) and Certificate of Academic Qualification
    5. Notarized copy of passport with latest Visa
    6. List of Nepali labourers to be trained by the foreign labourers
    7. Working Approval and Work Permit
    8. Copy of Industry Registration
    9. Copies of current Audit Report and Tax Clearance Certificate of the company

*Note: Incase of Non-tourist Visa, the application should be submitted sixty days ahead of Visa expiry date

Residential Visa:

In case of foreign investment equivalent or above 1 million US dollar at a time, a foreign investor or his/her representative and family members shall be recommended for the Residential Visa.

  1. Notarized copy of passport with the latest Visa
  2. Evidence of Realized Investment equivalent or above 1 million US dollar at a time
  3. Copy of the Industry Registration Certificate
  4. Physical and Financial Progress Report of the industry
  5. Document of the relation with the dependent

Compliance with Environmental regulations for FDI approval in Nepal

For establishing an industry, the extension and diversification of existing industry, Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA) should be approved prior to the operation of the industry as per the existing environment laws

Government Fees For FDI approval and related registrations

a.

Approval of Foreign Investment

Free (Deposit Rs.20,000/-)

b.

Company Registration

As per Company Act (Company Registration Fees)

c.

Industry Registration

Free

d.

Capital Currency against Foreign Investment

Free

e.

Visa Fees

Fees as per immigration Act

General Tax Rates in Nepal

1 %
Corporate Income TAX
1 %
Manufacturing Industries
1 %
Payment of Interest (TDS)
1 %
Payment of Dividend (TDS)

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