FDI Approval Process in Nepal: DOI & IBN Guide 2026

FDI approval process in Nepal

Foreign investment approval should be obtained through the authority responsible for the proposed project before the investor transfers capital or treats company incorporation as permission to invest. The process normally begins with sector eligibility and structuring, continues through Department of Industry or Investment Board Nepal approval, and is followed by company, industry, tax and banking compliance.

The Foreign Investment and Technology Transfer Act, 2075, Industrial Enterprises Act, 2076, Public-Private Partnership and Investment Act, 2075 and Nepal Rastra Bank rules form the principal framework. The exact route changes for a new industry, an investment in an existing company, technology transfer, foreign loan or qualifying large project.

Step 1: define the proposed investment

Identify the foreign investor, Nepali partner if any, proposed products or services, location, project cost, foreign investment amount, ownership percentage and funding schedule. Decide whether the transaction is a new equity subscription, joint venture, purchase of existing shares, reinvestment or another legally recognized form.

The application, project report, contracts, company capital table and banking plan must describe the same transaction. A vague or changing commercial structure causes inconsistent documents and avoidable regulatory comments.

Step 2: screen the sector and ownership

Check the precise activity against FITTA's restricted schedule, the Industrial Enterprises Act and sector-specific legislation. Some activities are closed to foreign equity; some permit investment subject to a foreign ownership cap, local partner or regulator approval; many sectors are generally open.

Screen each material activity separately when a project combines manufacturing, retail, consulting, technology, hospitality or another service. An open principal activity does not automatically make every secondary objective eligible.

Step 3: confirm the investment threshold

The Department of Industry's current published guidance states a minimum foreign investment threshold of NPR 20 million in a project. The threshold and any special treatment should be reconfirmed against the latest government notice when the application is prepared.

The committed foreign equity, project cost, authorised capital, financing sources and implementation schedule should be realistic and internally consistent. Do not transfer funds or restructure commitments merely to avoid the applicable threshold or approval route.

Step 4: identify DOI or IBN jurisdiction

Current Investment Board Nepal materials describe applications for projects below NPR 6 billion as proceeding through the Department of Industry, while projects costing NPR 6 billion or more proceed through Investment Board Nepal. Energy capacity, public-private partnership status and other statutory criteria can alter jurisdiction.

Confirm the authority for the actual project before filing. Large IBN projects may require project development or investment agreements and additional technical, financial, land, environmental and government review beyond a standard DOI equity application.

Step 5: choose the legal structure

Many investors use a Nepali private company as a wholly owned subsidiary or joint venture. An acquisition of an existing company's shares requires a different approval and due-diligence path. A foreign branch or liaison office is not a substitute for approved equity investment in a Nepali company and is governed by separate registration and activity restrictions.

For a joint venture, settle ownership, board rights, reserved matters, funding obligations, transfer restrictions, deadlock, intellectual property, dispute resolution and exit provisions before final documents are signed.

Step 6: prepare the required documents

DOI's current checklist for a new foreign-invested industry includes the application, project report, joint-venture agreement where there is more than one investor, identification or incorporation documents for foreign and local parties, investor biodata or company profile, a financial credibility certificate from the investor's bank and representative authority where applicable.

A corporate investor should demonstrate the chain of authority for the investment decision and filing representative. Foreign-issued records may require notarisation, authentication and translation under current practice.

Step 7: prepare the project report

The project report should accurately cover the activity, product or service, market, project cost, sources of finance, capital structure, machinery or technology, employment, implementation schedule, projected operations and environmental implications.

Financial projections should reconcile with the investment request. Because approval is tied to the represented project, material later changes in capacity, product, location, ownership or investment may require further approval.

Step 8: file the FDI application

Submit the application through the current system or filing channel prescribed by the responsible authority. Pay only the official charge or deposit applicable at the time and retain the receipt. DOI's current information refers to a refundable NPR 20,000 amount after approval, but applicants should verify the operative payment instruction before paying.

The authority may request clarification, revised objectives, evidence of financial capacity, authenticated documents, regulatory opinion or corrections. Respond consistently across the project report, agreements and company papers.

FDI approval timeline

DOI's citizen charter currently states a five-day service time for foreign investment approval with a complete application. This is an administrative service standard, not a guaranteed completion date for every project.

The practical timeline depends on sector review, jurisdiction, document authentication, regulator opinions, environmental issues, investor responsiveness and whether the filing is complete. Large IBN or regulated projects require additional stages and should not be planned against the DOI service standard.

Step 9: incorporate or update the Nepali company

After approval, incorporate the subsidiary or joint-venture company at the Office of the Company Registrar, or complete the approved share transfer for an existing company. The shareholder names, percentages, capital, objectives and investment amount must match the FDI approval.

Corporate foreign promoters generally submit authenticated incorporation and authority documents. Company registration creates the legal entity but does not replace industry registration or an operating licence.

Step 10: register the industry

DOI guidance states that, after foreign investment approval, the industry should be registered within 35 days or an extension should be requested. The industry filing commonly includes the FDI approval, company certificate, memorandum, articles and any required environmental report.

Confirm whether an environmental study, land document, technical approval or sector licence is needed before operations or construction begin.

Step 11: complete tax and banking setup

Obtain PAN and VAT registration as applicable and open the company's bank account. Coordinate with an authorised bank and current Nepal Rastra Bank rules before remitting capital.

The investor name, remittance currency, purpose, beneficiary and amount should correspond to the approval. Retain SWIFT records, bank credit advice, encashment evidence and every document needed to demonstrate that approved capital entered through the proper channel.

Step 12: record capital and issue shares

Complete the applicable foreign-investment recording and company share-issuance steps after funds arrive. Update the shareholder register, issue share certificates, make OCR filings and maintain board and banking evidence.

Weak capital-entry records are a major future repatriation risk. The complete evidence chain should connect the approval, remittance, accounting entry and issued shares.

Approval for investment in an existing industry

A foreign investor acquiring shares in an existing Nepali industry follows a separate DOI checklist. Current guidance refers to requests from transferor and transferee, the share-transfer agreement, board decisions, foreign investor records, financial credibility certificate, current shareholder list, audit report, tax clearance and industry-registration certificate.

Conduct legal, tax, financial and regulatory due diligence before signing an unconditional acquisition. The agreement should make approval and completion filings clear conditions precedent.

After approval: continuing compliance

FDI approval is not the end of regulatory work. The company must comply with the approved activity and capital plan, company filings, accounting and audit, tax, labour, environment, sector licensing and foreign-exchange rules.

Changes to ownership, company name, production capacity, product, location, power capacity, technology-transfer terms or operating period may require DOI or another authority's prior approval or record update.

Common causes of delay

Frequent problems include filing in the wrong jurisdiction, using an outdated sector analysis, incomplete authentication, inconsistent investor names, mismatched investment amounts, unsupported financial projections, unclear representative authority and missing regulatory opinions.

Use one verified transaction data sheet and conduct a legal consistency review across every application, agreement, resolution, company document and remittance instruction before submission.

Legal update and caution

This guide was reviewed in July 2026 using current DOI, IBN, OCR and NRB materials. Approval channels, thresholds, service standards, documents and electronic procedures may change. Confirm the latest official requirements for the specific investment before signing or remitting funds.