Foreign Direct Investment

Foreign Direct Investment (FDI)

Foreign Direct Investments in Nepal are regulated mainly by the Foreign Investment and Technology Act (FITTA) of 2019, along with additional provisions applicable from the Public Private Partnership and Investment Act, Labor Act, and the Companies Act.

There is great potential for investment in Nepal. Nepal is pursuing a liberal foreign investment policy to create an investment-friendly environment. Major areas for investment include: hydropower, manufacturing, services, tourism, construction, agriculture, and mining and minerals Some of the initiatives undertaken in Nepal include:

1. Reforming business-related policies and procedures while ensuring industrial security and institutional reforms;
2. Developing industrial and commercial infrastructures and expanding services;
3. Expanding and promoting micro-, small- and medium-scale industries, while ensuring industrial peace; and
4. Focusing on tourism, hydropower, IT, agriculture, and mining industries, and creating an environment that utilizes the full capacities of existing industries.

Forms of Foreign Investment

Foreign Investment can be made in any industry in the following forms:

1. Investment in shares (equity);
2. Reinvestment of the earnings derived from equity;
3. Investment made in the form of loans or loan facilities; and
4. Investment in kinds, e.g. machineries and equipment.

The Government decision on September 6, 2012 has increased the minimum amount of FDI to NPR 5 million for each investor from USD 20,000