Foreign Direct Investment (FDI) in Nepal is gaining attention from international investors who are seeking new opportunities in emerging markets. With its strategic location between India and China, low competition, and government incentives, Nepal offers a welcoming environment for foreign investment. However, investing in a new country can come with challenges, legal complexities, and bureaucratic hurdles. Foreign Direct Investment Approval Process in Nepal. That is why having a qualified team of FDI lawyers and law firms in Nepal is crucial for smooth, legally compliant, and successful foreign investment. Medha Law and Partners Is a leading law firm in Nepal.
Legal Framework Governing FDI in Nepal
The main law that governs foreign investment in Nepal is the Foreign Investment and Technology Transfer Act, 2019 (FITTA). This Act outlines the process, rights, and obligations for foreign investors, along with investment thresholds and procedures. In addition to FITTA, the Foreign Investment and Technology Transfer Rules, 2021 (FITTR) further regulate the operational aspects of FDI in Nepal.
Minimum Investment Requirement
As per the current legal standards, the minimum capital requirement for foreign investment in Nepal is NPR 50 million, which is roughly around USD 375,000. It is important to note that this amount must be invested as paid-up capital.
Types of Foreign Direct Investment Allowed
Foreign Investment in Nepal can be structured in three main ways:
- Equity Investment – Direct ownership of shares in a Nepali company.
- Loan Investment – Debt financing to a business operating in Nepal.
- Reinvestment – Additional investment made from the profits earned in an existing FDI venture.
Each of these avenues allows foreign investors to participate in Nepal’s growing economy while maintaining flexibility in their investment structure.
Step-by-Step FDI Procedure in Nepal
Step 1: Approval from Department of Industry (DOI) or Investment Board Nepal (IBN)
The first and most important step is to seek FDI approval from the competent authority:
- Department of Industry handles the process.
- Investment Board Nepal is the competent authority.
Both authorities require a detailed project proposal, investor profile, and legal documentation.
Step 2: Company Incorporation at the Office of Company Registrar (OCR)
After receiving FDI approval, the foreign investor must register a company in Nepal. This process includes submitting company statutes (Memorandum and Articles of Association), proof of foreign investment, and personal documentation of the directors/shareholders.
Step 3: Tax and Business Registration
Once incorporated, the company must be registered for:
- Permanent Account Number (PAN)
- Value Added Tax (VAT) (if applicable)
- Social Security Fund (SSF) for employees
These are done at the Inland Revenue Office (IRO).
Step 4: Industry Registration at the DOI
After business incorporation and tax registration, the next step is to register the industry at the Department of Industry. This is necessary for businesses classified as industrial or manufacturing enterprises under Nepalese law.
Step 5: Approval from Nepal Rastra Bank (NRB)
One of the most essential parts of FDI compliance is to get approval from Nepal Rastra Bank, the central bank of Nepal. Without this step, foreign investors cannot legally remit funds into Nepal. The bank monitors foreign currency inflow, proper documentation, and source of funds.
Legal Services for FDI in Nepal by Medha Law and Partners
Medha Partners, is a renowned Leading Law Firm in Nepal that specializes in Foreign Direct Investment. With years of experience and a highly skilled team of corporate attorneys, Medha Law and Partners assists clients at every step of the FDI journey—from application and approvals to regulatory compliance and post-incorporation operations.
Services Offered:
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Foreign Investment Approvals
We help you navigate the complex government approval process. Whether your investment falls under the DOI or IBN, our firm ensures timely and efficient processing of applications as per the FITTA, 2019.
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Coordination with DOI and IBN
Our firm specializes in coordinating with all regulatory bodies, including the Department of Industry and Investment Board Nepal, ensuring your application meets the current legal guidelines and recent government directives.
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Approval from Nepal Rastra Bank
We offer end-to-end support to secure NRB’s foreign investment approval, which includes proper documentation, fund flow structuring, and compliance with financial regulations.
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Company Incorporation
Our law firm provides full support for registering a company in Nepal, drafting the necessary documents, obtaining tax certificates, and registering for social security. We ensure every step is legally compliant and efficient.
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Business Visa Assistance
Obtaining a Business Visa for Nepal can take between 2 to 5 months. Our legal experts will assist you throughout the process—ensuring smooth processing of visas for company founders, shareholders, and investors.
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Copyright and IP Protection
We help foreign companies protect their intellectual property in Nepal. Given Nepal’s unique copyright laws, it is vital to register trademarks, patents, and copyrights with the appropriate authorities.
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Corporate Structuring and Tax Planning
We offer strategic legal advice on how to structure your FDI, depending on the sector—whether it’s the IT, hospitality, education, or film industry. Our firm ensures optimal tax efficiency and legal structure to minimize liability.
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Corporate Finance and Governance
MedhaCorpLaw also provides support with corporate financing, capital structuring, and governance. We guide foreign companies in setting up internal controls, managing compliance, and filing required reports to regulators.
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Regulatory Documentation and Approvals
We help clients secure all necessary regulatory approvals, draft legal documents, and make submissions in line with Nepal’s legal system. From investment agreements to MoUs and compliance reports, we handle it all.
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Due Diligence and Compliance Filings
We regularly conduct legal due diligence and assist in filing mandatory compliance reports, so your FDI remains legally compliant and protected from future disputes or fines.
Frequently Asked Questions
What is the Minimum Foreign Investment Required?
The minimum capital requirement for foreign investors in Nepal is NPR 50 Million (about USD 375,000). However, in some service sectors, the requirement may be as low as NPR 20 Million (approx. USD 155,000).
Which Laws and Authorities Govern FDI in Nepal?
FDI in Nepal is regulated under:
- Foreign Investment and Technology Transfer Act, 2019
- Foreign Investment and Technology Transfer Rules, 2021
- Companies Act, 2006
- Industrial Enterprises Act
- Nepal Rastra Bank
Regulatory bodies include:
- Department of Industry (DOI)
- Investment Board Nepal (IBN)
- Nepal Rastra Bank (NRB)
- Office of Company Registrar (OCR)
What is the Complete FDI Process in Nepal?
- Submit proposal to DOI or IBN
- Company registration at OCR
- Tax and industry registration
- Approval from Nepal Rastra Bank
- Business visa processing
- Start of operations and compliance filings
What Documents are Required for FDI?
Key documents include:
- FDI Application Form
- Project Proposal
- Identification documents (passport)
- Company statutes (MOA/AOA)
- Power of Attorney
- NRB approval request
- Board resolutions
How Long Does the FDI Process Take?
The FDI process can take anywhere between 2 to 6 months, depending on the investment size, documentation, and sector. Legal representation can significantly reduce the timeline.
What are the Government Fees and Charges?
The cost of FDI registration varies based on the investment size, legal fees, government charges, and the number of approvals required. On average, budget for USD 1,500–4,000 for basic compliance and processing fees.
Final Words: Why You Need an FDI Law Firm in Nepal
Investing in a new country is always a risk—but that risk can be managed with the right legal counsel. At MedhaCorpLaw, our mission is to make the process simple, transparent, and fully compliant with Nepalese law. From company registration to investment structuring, IP protection, and financial governance—we provide complete legal solutions for foreign investors in Nepal.
📞 Contact Us for a Consultation Today
Let’s start your FDI journey in Nepal the right way- with expert legal support at every step.
Email: info@medhacorplaw.com
Cell/Whatsapp/We Chat/Viber: +977 9700499414