FDI Approval in Nepal: A Practical Roadmap

What foreign investors actually need to file with the Department of Industry and NRB — and where timelines usually slip.

On paper, foreign direct investment (FDI) into Nepal runs through a handful of well-defined steps. In practice, most delays don't happen because a rule was broken — they happen because of sequencing: an investor files at the wrong stage, picks the wrong route, or assumes an approval covers something it doesn't.

Here's how the process actually works, and where it tends to slip.

Start with the route, not the paperwork

Every FDI application into Nepal is governed by the Foreign Investment and Technology Transfer Act, 2019 (FITTA), and the first real decision isn't a form — it's which approval route your investment qualifies for.

Automatic Route. For a defined list of sectors, foreign investment can be approved almost instantly through the Department of Industry's (DOI) online one-window system, without a discretionary review. This list has expanded significantly — a February 2026 government notification broadened it to 102 industry categories across seven sectors, and the investment ceiling that used to cap automatic-route pledges at around NPR 500 million has since been lifted for most eligible sectors. If your business falls on this list, this is the fastest path into Nepal by a wide margin.

Approval Route. Everything else goes through a discretionary approval process — the Department of Industry for most investments, or Investment Board Nepal (IBN) for large-scale projects, generally those exceeding roughly NPR 6 billion. This route involves an actual review of the application rather than an automated check, and it's where timelines are least predictable.

Getting this classification wrong at the outset — assuming automatic-route eligibility that doesn't actually apply to your sector, for instance — is one of the most common sources of early delay. It's worth confirming against the current gazette notification before filing, not assuming based on last year's list, since this has been amended more than once in recent cycles.

The minimum investment threshold — and who's exempt from it

FITTA sets a general minimum foreign investment threshold of NPR 20 million per investment. This is meant to filter out fragmented, small-scale inflows rather than restrict genuine investment.

The one significant carve-out: IT and digital industry businesses are currently exempt from this minimum entirely. If you're structuring a technology company with foreign shareholders, this materially changes what "getting started" looks like compared to, say, a manufacturing joint venture.

Sector-specific thresholds also apply in places — banking and financial institutions, for example, sit at a different (higher) bar than the general minimum. Because these figures move with each fiscal year's amendments, the right move is always to confirm the current threshold for your specific sector before finalizing your investment structure, not to work from a number you saw in an old filing.

The sequence, step by step

1. Confirm eligibility. FITTA maintains a negative list of sectors closed to foreign investment — certain retail trade, personal service businesses, primary agriculture, and a handful of other categories. Confirm your sector isn't on it before doing anything else.
2. Obtain FDI approval — DOI or IBN. This is the foundational approval, and it must generally be secured before company incorporation, not after. For automatic-route sectors, this can be near-instant through the online portal. For everything else, published timelines typically cite 30–45 days, though this assumes clean documentation on the first submission — see below for where that assumption usually breaks.
3. Register the company — Office of Company Registrar (OCR). Once FDI approval is in hand, the entity itself gets registered under the Companies Act, 2063. This is a fairly standard incorporation process, but it depends entirely on the DOI approval being finalized first — trying to run these in parallel is a common (and avoidable) source of rework.
4. Register for PAN — Inland Revenue Department. Tax registration follows incorporation.
5. Sector-specific licenses, if applicable. Telecommunications, hydropower, banking, and a number of other sectors carry their own separate licensing requirements — from the Nepal Telecommunications Authority, the Department of Electricity Development, or the relevant regulator — that run on entirely independent timelines from the FDI approval itself.
6. Bring in the capital — through NRB-recorded banking channels. This is the step most first-time investors misunderstand. Since the 2021 Foreign Investment and Foreign Loan Management Bylaws, most fresh equity investment into Nepal no longer requires prior NRB approval — that requirement was removed to speed up the process. NRB approval is still required specifically where the investment is structured as a share purchase (acquiring existing shares rather than subscribing to new ones). Either way, every inward remittance still needs to be recorded with NRB, remitted through formal banking channels, and properly documented — because that record is what makes future profit repatriation possible.

Where timelines usually slip

The formal steps above are rarely the problem. In practice, delay tends to cluster around three points:

Documentation from the home country. Corporate documents, board resolutions, and shareholder certificates issued abroad often need authentication or apostille, and translation where relevant. Missing or improperly certified documents is the single most common reason an otherwise straightforward application sits in review longer than expected.

Banking compliance on the actual money transfer. Even though prior NRB approval isn't required for most fresh equity investment, receiving banks in Nepal apply their own KYC and compliance checks before crediting an inward remittance as recognized FDI capital. Investors who treat this step as a formality — rather than preparing the same level of documentation a formal approval would require — are frequently the ones who find their capital sitting in a holding pattern for weeks.

Sector-specific licenses running on their own clock. A telecom or hydropower investor can complete DOI approval, company registration, and capital injection cleanly, and still be months away from operating because the sector license is on an entirely separate, often slower, regulatory track. Treating the FDI approval as "done" is a common false finish line.

The practical takeaway

None of this is exotic — it's a known sequence with known friction points. The investors who move fastest are the ones who confirm their route and threshold against the current notification before filing, prepare home-country documentation to banking-grade standard from day one, and start sector-specific licensing in parallel rather than after FDI approval closes.

Strategic Advisors Pvt. Ltd. guides foreign investors through FDI approval, company registration, and NRB compliance end-to-end, with a Chartered-Accountant-led team that manages documentation, banking coordination, and licensing from one desk. Book a free first call →

A note on accuracy: FDI thresholds, the automatic-route sector list, and investment ceilings in Nepal are revised through periodic gazette notifications and have changed more than once in recent fiscal years. The figures above reflect the framework as verified at the time of writing; always confirm current thresholds with the Department of Industry, Investment Board Nepal, or a qualified advisor before finalizing an investment structure.