Foreign investment in Nepal is governed by a comprehensive legal framework designed to facilitate investment while ensuring regulatory oversight. The key legislation includes:

• Foreign Investment and Technology Transfer Act (FITTA) – The principal law regulating foreign investment, technology transfer, and repatriation of profits and capital.

• Companies Act, 2063 (2006) – Governing the incorporation and operation of companies in Nepal, including those with foreign investment.

• Industrial Enterprises Act, 2076 (2020) – Providing incentives, concessions, and facilities for industries, including foreign invested enterprises.

• Nepal Rastra Bank (NRB) Directives – Regulating foreign exchange, capital inflows, profit repatriation, and external borrowing.

• Sector specific regulations – Issued by authorities such as the Department of Industry, Investment Board Nepal, and sectoral regulators (e.g., for hydropower, telecommunications, financial services).

Foreign investors or companies expanding into Nepal must obtain approval certification from either the Department of Industry (DOI) or the Investment Board Nepal (IBN), depending on the amount and nature of the investment.

For investments above a prescribed threshold or in strategic sectors, IBN approval is required.

We draft required documents and file applications. We prepare investment proposals, feasibility studies, technical capability proofs, and environmental impact assessments as needed, and liaise with government officials to support reviews and address queries.

After securing DOI or IBN approval, we coordinate with Nepal Rastra Bank (NRB) to obtain the necessary foreign exchange approvals.

This ensures that capital inflows are properly recorded and recognized as foreign investment—a critical prerequisite for future repatriation rights.

We draft the required documents, including compliance contracts and relevant materials, to arrange approval from NRB.

According to the Foreign Investment and Technology Transfer Act, a foreign investor desiring to make a foreign investment in Nepal must apply to the foreign investment approving body.

We draft applications to ensure they are complete, accurate, and aligned with regulatory expectations, aiming to support approval within the statutory timeline following application registration.

Major regulatory authorities for foreign investment approval in Nepal include the Investment Board Nepal, Nepal Rastra Bank, and the Department of Industry.

We facilitate interactions and approvals with these bodies, ensure appropriate compliance at every stage, streamline processes, and minimize delays. We also stay informed about policy developments that may affect investors.

In practice, an investor in Nepal must incorporate a company or business entity after obtaining investment approval. We handle the incorporation process, including:

• Drafting the Memorandum of Association and Articles of Association.

• Preparing required documentation and filings.

• Submitting the application to the Office of the Company Registrar.

• Securing the Certificate of Incorporation.

After incorporation, we support compliance with Nepalese rules and regulations, including registration of a Permanent Account Number (PAN) with the Inland Revenue Department for regular tax filing, and assistance with industry specific licensing and registration as required.

We provide ongoing advisory services including:

• Regulatory compliance – Annual filings, renewal of industry licenses, labor law compliance, and environmental monitoring.

• Profit repatriation – Guidance on tax clearance, annual audit completion, and NRB approvals for transferring profits, dividends, and capital abroad.

• Sector specific advisory – Tailored guidance for investments in hydropower, tourism, manufacturing, technology, and other priority sectors.

• Due diligence and risk management – Ongoing assessments to identify and mitigate legal, regulatory, and political risks.

Ultimately, Buddha Bhumi Law and Associates functions as a premier legal advisor to foreign investors in Nepal, providing the knowledge, experience, and strategic guidance necessary for streamlined foreign investment approval and sustained success in the Nepalese market.