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Foreign Investment in Nepal

Foreigners cannot own or acquire land in Nepal unless they are non-resident Nepalese holding an identification card. Companies wholly or partly owned by foreign investors may only acquire land for their business purposes (e.g., to establish a factory or a hotel or to provide residence to their workers). No specific

permission is needed from the government to do so, provided that purchasing land is listed in the project report submitted when obtaining the foreign investment approval.

Foreign Investment Regulation

The Foreign Investment and Technology Transfer Act 1992 allows share/equity investment for foreign investors in certain industries, as listed in the Industrial Enterprises Act 1992 and except for restricted businesses. Investors may invest in manufacturing, energy, agricultural, mining, tourism and construction industries. Investment in traditional small industries; weapon industries; and fish, chicken and bee farming is restricted. Investment in retail is only allowed for companies already operating in more than two countries.Foreign investment in real estate is allowed for “construction and operation of commercial, office and housing complex” and “construction and sale of residential housing”, but is not allowed for projects that only buy, sell or rent land and houses without

constructing them. Investors can also open an investment company that invests in other companies.

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