1. Key Things to Know About Investing in Nepal

The amount of money you need to invest in Nepal is NPR 20 million. This is INR 1.25 crores or USD 150,000.. If you want to start an Information Technology company you do not need to invest this much money.

There are ways to invest in Nepal. The Department of Industry approves investments up to NPR 6 billion. If you want to invest more than NPR 6 billion. If you want to build a big hydropower project you need to get approval from the Investment Board Nepal.

Some businesses are not allowed to get investment. These include businesses that raise chickens, cows or bees and businesses that grow crops. You also cannot get investment for real estate except for construction projects.

2. Steps to Get Approval for Foreign Investment

You have to follow these steps in order. If you do not do one step you cannot do the step.

1. Get Preliminary Approval for Foreign Investment (1-3 weeks)

This takes one to three weeks. You have to apply and give some information about your company. You need to give a plan for your business and a letter from your bank that says you have enough money.

2. Register Your Company (1 week)

This takes three to five days. After you get approval you need to register your company in Nepal. You have to give some documents that say what your company is and who owns it.

3. Register for Taxes (1-2 days)

This takes one to two days. You need to register your company for taxes so you can get a number. If you think you will make a lot of money you also need to register for something called Value Added Tax.

4. Register with the Local Government (1 week)

This takes three to five days. You need to register your company with the government where your office is. Then you need to register your company as a business with the Department of Industry.

5. Get Approval from the Central Bank (1 week)

This takes two to three days. You need to get permission from the bank to bring money from India to Nepal.

6. Bring in Your Money

This takes some time. You need to bring the money you invested into a bank account in Nepal. You have to bring in least 25% of the money you said you would invest before you can start your business.

3. Costs

There are some costs you have to pay to invest in Nepal. These include fees for registering your company and taxes.

The government fees are not very high. You have to pay a fee to register your company. It is not very much money. You also have to pay some money to register for taxes. This is free.

Fee Category	Description / Basis	Cost Structure (in NPR)	Approx. Equivalent (in INR)
FDI Approval	Paid to the DOI	Free (Requires a refundable security deposit of NPR 25,000)	~INR 15,600 (Deposit)
Company Registration	Paid to the OCR; scaled progressively based on Authorized Capital	• Up to NPR 10 Lakhs: NPR 4,300 • Up to NPR 1 Crore: NPR 16,000 • Up to NPR 10 Crores: NPR 43,000 • Exceeding 10 Crores: NPR 43,000 + NPR 30 per additional lakh	Scales up from ~INR 2,700 to INR 27,000+
Tax Registration	Paid to the Inland Revenue Office	Free	Free
Industry Registration	Paid to the DOI	Free	Free
Local Ward Registration	Local government business tax	Varies by location and nature of business (NPR 5,000 to NPR 25,000)	~INR 3,100 to INR 15,600

There are some costs you might have to pay. These include costs for getting permission from the government to build something and costs for hiring lawyers or consultants. These costs can vary depending on what kind of business you have.

For example if you need to get permission from the government to build something you might have to pay between NPR 50,000 to NPR 300,000. If you need to hire a lawyer or consultant you might have to pay between NPR 150,000 to NPR 500,000.

FAQ

Can the business own property in nepal?

The short answer is yes. But with strict conditions.

Foreign individuals and foreign parent companies can't directly. Register land in Nepal.However if your local Nepalese subsidiary company is officially registered under FITTA it becomes a legal entity, in Nepal. This company can own property as a legal entity.

The Land Act and the Department of Industry regulate property ownership with rules, several parameters have to be met.

What parameters should be met?

The "Business Purpose" Constraint
1. The company cannot purchase land or property for real estate speculation, passive investment, or arbitrary trading.
1. Any land or building purchased must be directly necessary for establishing and operating the business (e.g., land for a factory, a building for your corporate office, or land for a hotel).
1. The land requirements and intent must be explicitly detailed in the Project Report / Business Plan you submit to the DOI during your initial FDI approval phase.
1. Legal Limitations and Ceilings
  1. The Ceiling Limit: The company can only buy the specific amount of land approved by the DOI as necessary for the project. If your business expands and requires more land than the standard ceilings allowed under the Land Act, you must apply for a special ceiling exemption through the Ministry of Land Management, Cooperatives and Poverty Alleviation via the DOI.
  1. Geographical Restrictions: Foreign-invested companies are strictly barred from buying land in highly sensitive ecological or geopolitical areas, including land located within 10 kilometers of Nepal's international borders.
1. Procedural Sequence for Purchasing Property
  1. Incorporate First: Complete the FDI approval, OCR registration, and PAN/VAT setup. Property cannot be acquired "in anticipation" of registration.
  1. Obtain Industry Registration Certificate: Register your business as an operational unit at the DOI. This certificate is legally required by the Land Revenue Office to initiate a property transfer to a foreign-invested entity.
  1. Property Due Diligence: Identify the land and perform a strict title search at the local Malpot Karyalaya (Land Revenue Office) to verify that the title is clean, unencumbered, and free of undisclosed bank mortgages or local legal disputes.
  1. Execute and Register the Transfer: The sale deed is executed between the seller and your Nepalese company entity. The property title deed (Lalpurja) will be issued explicitly in the name of the registered Nepalese company, not the Indian parent organization or its foreign directors.

Can I lease property without buying?

Yes. Because land acquisition can involve long administrative loops regarding ceilings, many Indian companies choose to lease land or commercial space instead.

Under current regulations, foreign-invested companies can legally execute long-term commercial lease agreements for up to 30 to 50 years (depending on the industry sector and location), which grants stable operational rights without the heavy upfront capital expenditure and regulatory screening of direct land ownership.

Are same laws applicable to Indians as they are for other nationals?

Indian nationals have the freedom of non-FDI paths and daily operational freedoms, as per the bilateral treaties.
- The 1950 Treaty Route (Small Businesses & Sole Proprietorships)
  - No Minimum Capital Requirement: An individual Indian national can bypass the NPR 20 million FDI threshold entirely to start smaller ventures (like a local retail outlet, a service business, or a restaurant).
  - The Process: Instead of dealing with the complex DOI/FDI framework, the individual applies for a Business Card at the Embassy of India in Kathmandu, takes a local commercial lease, registers the business directly at the local Ward Office, and obtains a local PAN certificate.
- Indian directors and technicians can be stationed at the Nepalese subsidiary indefinitely without encountering the stringent work-permit ceilings and repatriation caps that govern other foreign expatriates.

Important thing to consider

While an individual Indian citizen can easily establish a small proprietary business at the local Ward level without FDI approval, a corporate entity wishing to repatriate corporate dividends back to an Indian parent company seamlessly must go through the formal FITTA/FDI framework.

If you register a business purely through the local Ward route using the 1950 Treaty privilege, the capital is treated locally; moving substantial legal corporate profits back across the border through central banking channels later can become a compliance bottleneck without that initial DOI Foreign Investment Approval.