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If you are a foreign investor researching Nepal, one number will shape your entire entry strategy: the minimum investment for FDI in Nepal. Set at NPR 20 million, this threshold decides whether your project can even begin. And if you are building an IT business with a 100 percent export model, an important exemption may remove the threshold entirely.
The minimum investment for FDI in Nepal is established by the Foreign Investment and Technology Transfer Act (FITTA) 2075, along with its amendments. The rule is simple to state but rich in detail: most foreign direct investment must start at NPR 20 million or more in a single tranche, while certain IT-related, fully export-oriented industries are exempted from this minimum. In this explanatory guide, the rule, the exemption, the sectors, and the process are unpacked layer by layer. By the end, you will know exactly where your project stands.
The Concept: Why a Minimum Exists
Every country sets entry conditions for foreign capital, and Nepal is no exception. The NPR 20 million threshold serves several purposes at once. First, it signals seriousness—small speculative inflows are filtered out, while committed investors pass through. Second, it keeps the domestic small-business sector protected for Nepali entrepreneurs. Third, it concentrates the government's limited approval capacity on projects large enough to matter economically.
The threshold, therefore, is not a barrier for its own sake. It is a design choice embedded in the entire architecture of Nepal's foreign investment regime.
The Legal Basis
Three instruments define the rule:
| Instrument | Role |
|---|---|
| FITTA 2075 | Sets the NPR 20 million minimum foreign investment threshold |
| FITTA amendments | Added the IT exemption and updated incentives |
| Foreign Investment and Technology Transfer Regulations 2077 | Define procedure, documentation, and sector schedules |
Under these rules, foreign investment may take the form of equity shares in a Nepali company, reinvestment of earnings, or investment in foreign currency. Each form must still clear the minimum threshold unless an exemption applies.
The NPR 20 Million Rule Explained
The core rule can be stated in one sentence: foreign direct investment in Nepal must be at least NPR 20 million, injected in a single instalment (ek patak), unless the investor falls within an exempt category.
Several practical details deserve explanation:
- Single tranche. The amount must come in one injection, not dribbled in over years. This prevents paper commitments that never fully materialise.
- Per project, not per investor. The threshold applies to the investment in the enterprise, so joint investors can combine their contributions to reach the minimum.
- Currency injection. The investment is brought in through the banking channel in foreign currency and converted at the prevailing rate, creating an official record that the DOI later verifies.
- No partial credit. Loans from foreign sources, technology transfer fees, and royalty arrangements are handled separately under FITTA and do not count toward the equity minimum.
The IT Exemption Explained
Here is the rule's most valuable exception. Amendments to FITTA have exempted information technology-related industries with a 100 percent export orientation from the minimum investment requirement.
Two conditions must both be satisfied:
| Condition | What It Means |
|---|---|
| IT-related industry | Software development, IT services, digital products, and similar technology activities |
| 100% export | Revenue generated entirely from clients and markets outside Nepal |
When both conditions are met, the NPR 20 million floor disappears. An IT entrepreneur can establish a foreign-invested company in Nepal with a modest capital injection and still enjoy full FDI protections—profit repatriation, share ownership, and dispute-resolution rights.
This exemption reflects a deliberate policy choice. Nepal's IT workforce is young, English-capable, and cost-competitive, and the government has positioned the sector as an export engine that should not be gated behind large capital requirements.
Sectors: Where FDI Is Allowed
Not every sector accepts foreign investment at all. The general pattern is:
| Sector Category | Treatment |
|---|---|
| Export-oriented manufacturing | Open to FDI |
| Tourism and hospitality (large scale) | Open to FDI |
| Hydro-power and infrastructure | Open, often with special frameworks |
| IT and digital services | Open, with the exemption for 100% export models |
| Retail and distribution to the domestic market | Largely closed to foreign investment |
| Small and cottage industries | Reserved for Nepali nationals |
| Sensitive areas (defence, some media, certain professional services) | Closed or strictly conditioned |
The full sector schedule is maintained in the FITTA regulations and updated through periodic notices, so the current list should always be confirmed at the time of application.
What the Minimum Buys You
Meeting the NPR 20 million threshold is not merely a compliance cost. It unlocks a package of rights under FITTA:
- 100 percent foreign ownership is permitted in most open sectors.
- Profit and dividend repatriation in convertible currency.
- Share transfer and exit rights with regulatory approval.
- Technology transfer agreements with associated royalty flows.
- Dispute resolution including international arbitration options.
- Visa benefits—the business visa tiers described in earlier guides, with fees scaling to the investment size.
The Process: From Threshold to Approval
The approval sequence is explained below.
Step 1 — Sector confirmation. Verify that the proposed activity is open to foreign investment and check whether the IT exemption applies.
Step 2 — Company registration. A Nepali company is registered at the Office of the Company Registrar, with the foreign investor as shareholder.
Step 3 — FDI approval application. The application is filed with the Department of Industry (or the Investment Board for very large projects), stating the investment amount, source, and sector.
Step 4 — Approval and recommendation. The DOI issues the foreign investment approval letter and, where relevant, the visa recommendation.
Step 5 — Capital injection. The committed amount is wired through the banking system into the company's account—NPR 20 million or more in one tranche, or any practical amount for exempt IT exporters.
Step 6 — Verification and compliance. The DOI verifies the injection through bank records, and the company enters the ongoing reporting cycle—tax, audit, and progress reports—that sustains both the approval and the investor's visa.
Common Mistakes to Avoid
- Assuming the threshold can be reached through multiple small transfers over time
- Counting shareholder loans toward the equity minimum
- Misreading the IT exemption—partial export models do not qualify
- Entering a sector that is closed or reserved for nationals
- Registering the company before confirming sector eligibility, forcing costly restructuring
Each mistake is avoidable through a short professional review before the first filing.
Final Thoughts
The minimum investment for FDI in Nepal is best understood as a doorway, not a wall. At NPR 20 million, it filters for commitment while leaving the IT export sector wide open through a well-designed exemption. Investors who understand the rule's architecture—single tranche, sector eligibility, exemption conditions—move through it quickly and confidently.
If you want your FDI entry structured correctly from day one—sector check, exemption analysis, approval, capital injection, and visa alignment—the team at CorporateNp Pvt Ltd can manage the entire process.
Planning your investment in Nepal? Contact CorporateNp Pvt Ltd today for a confidential consultation.
Legal Disclaimer
This article is provided for general informational purposes only and does not constitute legal advice. Investment thresholds, sector schedules, and exemptions are set by the Government of Nepal and may change through amendments or notices. For advice on your specific situation, consult a licensed professional in Nepal and confirm current requirements with the Department of Industry.
References
Frequently Asked Questions
What is the minimum investment for FDI in Nepal?
For most sectors, foreign direct investment must be at least NPR 20 million, injected in a single tranche, under FITTA 2075.
Is there any exemption from the minimum investment?
Yes. IT-related industries with 100 percent export orientation are exempted from the NPR 20 million minimum under FITTA amendments.
Can several foreign investors combine to reach the minimum?
Yes. The threshold applies to the total foreign investment in the enterprise, so joint contributions count together.
Does the investment have to come in one transfer?
For the standard threshold, yes—the amount must be injected in a single instalment through the banking system.
Can I invest less than NPR 20 million in a non-IT business?
Only if another specific exemption applies. Otherwise, sub-threshold foreign investment in non-exempt sectors is not permitted
What happens after my investment is approved?
The capital is injected, the DOI verifies it through bank records, and the company enters an ongoing compliance cycle of tax, audit, and progress reporting.
Does meeting the minimum affect my visa?
Does meeting the minimum affect my visa?
Yes. The business visa fee tiers scale with investment size, and the DOI recommendation that supports the visa flows from the same approval.
Where do I confirm whether my sector is open?
The current sector schedule is published under the FITTA regulations and DOI notices; confirmation should be sought at the time of application.