Kathmandu    : Click for Kathmandu, Nepal Forecast
Embassy of Nepal, New Delhi
नेपाली राजदूतावास नयाँ दिल्ली

  Economy and Trade

Investment Procedure

Before making an equity investment in Nepal or entering into a technology transfer agreement with a Nepalese company, foreign investors have to obtain approval from the DoI. However, for equity investment in a new venture, foreign investors have to undergo the following additional procedures as well:

  • Incorporation of company with the CRO,
  • Registration of industry with the DoI,
  • Registration with the Inland Revenue Office to get a Permanent Account Number (PAN), and
  • Others, if applicable (such as trademarks/design/patents).

(For the approval procedure to be followed by equity investors in a new venture, see the flowchart in Appendix 1.) explain in "Foreign Investment Opportunities e-book"

The procedures for seeking approval for foreign investment and technology transfer, company registration, industry registration, tax registration and other related official procedures are described in the following sections.

Procedure for obtaining Approval:

Foreign individuals or firms or companies willing to operate either one or a combination of the following activities have to get prior approval of the Foreign Investment Section and the Licence/Registration Section of the DoI. The procedure to be followed is as follows:

  • Establish a new industry either with 100 per cent foreign equity or in joint venture with Nepalese or NRN or foreign investor/s,
  • Engage in technology transfer in an existing industry,
  • Make an equity investment in an existing industry through share transfer, and
  • Make a loan investment, foreign or local, in an existing industry.

Foreign Equity Investment in a New Industry:

Foreign investors desirous of investing in Nepal, whether as a wholly foreign-owned enterprise or as a joint venture with Nepalese or foreign promoters, are required to apply to the DoI in a prescribed application form, along with the following documents:



Project report.
Joint venture agreement (JVA), if more than one investor
Citizenship certificate of local party or certificate of incorporation, including memorandum of association and articles of association, if local party is a company .
Copy of passport of foreign party or certificate of incorporation, including memorandum of association and articles of association, if the participant is a company.
Bio-data or company profile of the foreign party
Financial credibility certificate (FCC) of theforeign investor issued
by a home country bank or a domicile country bank
Authority letter from the companies or individuals concerned to a local person or company to carry out necessary work on their behalf, if applicable

Upon the approval of foreign investment up to a maximum amount (depending upon the envisaged fixed assets), Rs 20,000 will have to be deposited in the accounts section of the DoI (for the applicable deposit rates, see Appendix 5 in Foreign Investment Opportunities e-book). The deposited amount is refunded to the promoters once the project comes into operation. Once the stated amount is deposited, the promoters will be issued a foreign investment approval letter and certified joint venture agreement, whichever is applicable.

For the investment procedures on technology transfer, foreign investment in an existing industry through share transfer, loan investment in and existing Nepalese Industry and Company Incorporation please see more on Foreign Investment Opportunities or visit the website www.doind.gov.np

Procedure for Industry Registration:

After obtaining approval for foreign investment, the industry is required to register with the DoI within thirty-five days. If registration cannot be done within the stipulated time, the investor will have to apply for an extension of the validity period. Therefore, once the company is incorporated, the investor has to apply to the DoI for the registration of the industry, filling up a prescribed form, along with the following documents:

  • A copy of the investment approval letter issued by the Foreign Investment Section, Do
  • A copy each of the certificate of incorporation, memorandum of association and articles of association of the company,
  • Environmental Impact Assessment (EIA) or Initial Environmental Examination (IEE) report. In case of IEE reports, the DoI gives the final approval, while EIA reports should be approved by the Ministry of Environment, before the registration of the industry.

(For a screening list indicating the categories of industries requiring IEE or EIA and the brief procedures to be followedin conductingthesestudies, see Appendices9 and10 respectively in Foreign Investment Opportunities e-book )

Approval Criteria:

While granting approval fo r foreign investment involving new investment, modernization, diversification or expansion, the projects are assessed, taking into account the following criteria:

  • Priority sectors designated by the GoN
  • Financial and technical viability
  • Contribution to employment generation
  • Foreign exchange earnings or savings
  • Competitiveness of products in the international marke
  • Appropriateness of technology
  • Terms and conditions of investment and technology transfer, and
  • Participation of Nepalese nationals in investment and management