Minimum Foreign Investment Thresholds and Exemptions
Nepal sets a floor of NPR 20 million per foreign investor. It comes from a ministry notice rather than the Act, and information technology is carved out.
Where the number comes from
The floor is NPR 20 million per foreign investor, and it is nowhere in the Act. Section 3(3) of the Foreign Investment and Technology Transfer Act 2075 (2019) says only that approval will not be given for foreign investment in an industry “of an amount that is less than the amount specified by the Government of Nepal by a notification in the Nepal Gazette,” and then stops.
That drafting choice is why so much published material on investing in Nepal is wrong about this. The threshold is a policy dial, and it has been turned four times in three decades. It stood at NPR 5 million under the previous foreign investment law. A notification of 23 May 2019, weeks after FITTA came into force, raised it tenfold to NPR 50 million, to loud objection from the domestic private sector. It came back down to NPR 20 million after a cabinet decision reported on 14 October 2022, given effect by a Ministry of Industry, Commerce and Supplies notice which the Department of Industry dates to 14 November 2022. That is where it sits as at August 2026.
Any source that states the figure without naming the notice behind it is describing whichever year the author happened to be writing in.
How the floor applies
The Department of Industry states the rule in its own words on its foreign investment page: “Any foreign investor has to invest at least Rs. Twenty million in the project. But there is no upper cap for foreign investment.” Two things follow from that sentence.
It attaches to the investor rather than to the company. In a joint venture with two foreign shareholders, each has to clear the floor on the Department’s formulation. The structure most likely to fail is the one where a minority foreign partner takes a token stake alongside a larger one. Investors who assume the test runs on aggregate foreign holding in the vehicle find out otherwise at application.
The second is that the figure is a commitment rather than a payment. The approved amount is what the Department records, and what the company’s foreign investment file is measured against for years afterwards. The Department’s own approximate conversion in its 2024 investor publication is about USD 150,000. That figure moves with the rupee and should be re-derived rather than quoted.
When the money has to arrive
Rule 9 of the Foreign Investment and Technology Transfer Regulation 2077 (2021) separates the threshold question from the funding question. It sets a schedule for remitting approved capital, with a first tranche that falls as a percentage as the investment rises.
| Approved foreign investment | First tranche |
|---|---|
| At the NPR 20 million minimum, up to NPR 50 million | 25% of the total |
| NPR 50 million to NPR 250 million | 15% |
| NPR 250 million to NPR 1 billion | 10% |
| Above NPR 1 billion | 5% |
Beyond the first tranche, 70% of the approved amount must be remitted before commercial operations begin and the remaining 30% within two years of that date. Where the investment takes the form of acquiring existing shares rather than subscribing new ones, the whole amount is due within a year of approval.
An investor who commits NPR 20 million to satisfy the threshold has committed NPR 20 million, and the file will eventually be reconciled against it. An approval inflated to look substantial creates an obligation to remit money the business does not need. Reducing an approved amount afterwards is an amendment application rather than a formality.
The IT exemption
The one general exemption is for information technology. The Department of Industry’s 2024 investor guidance states that there is “no minimum threshold for the investors who want to invest in IT sectors through Automatic Route.” The gazette notice of 2 October 2023 that opened the automatic route is summarised the same way: the minimum capital requirement is not triggered for IT-based industries coming through that channel.
Both formulations tie the exemption to the automatic route. The listed IT activities are broad — technology and IT parks, software development, data processing, digital mapping, business and knowledge process outsourcing, data centres, data mining, cloud computing, web portals and web design. An IT business that falls outside those activities, or that has to go to the Department of Industry in the ordinary way for some other reason, is not clearly covered by the exemption on the material we have found. We have located no notice extending the carve-out generally, and it should not be assumed.
The question is live for exactly the businesses the exemption was designed for. A small software or services venture is the case where the difference between a zero floor and a NPR 20 million floor decides whether Nepal is a viable place to incorporate, and where the founders are least able to absorb a wrong answer.
The visa link
The minimum does more work than gatekeeping. Section 30 of FITTA ties immigration status to it. A business visa runs to a foreign investor or an authorised representative, and to family members, for as long as the prescribed minimum investment is maintained. That makes the floor a continuing condition rather than an entry test. A residential visa requires investment of at least USD 1 million at one time, and lasts while that investment is maintained. A non-tourist visa of up to six months covers research and survey work before any investment is made.
An investor who drops below the floor after entry therefore has an immigration problem as well as an investment one. The two are administered by different offices, which do not necessarily notice at the same time.
Why the figure came down
The reduction from NPR 50 million to NPR 20 million in late 2022 reversed a policy that had lasted three years. The reasoning is visible in the objection that greeted the higher figure in 2019. A floor set to screen out unserious applicants also screens out early-stage businesses, which is most of what a small economy attracts, and it does so with no discretion to admit a good small project.
Nepal has since chosen to keep a general floor and carve out the sector where the floor was doing the most damage. That is a narrower instrument than a general reduction and a more manageable one, because the carve-out sits in a gazette notice rather than in the Act. It can also be withdrawn as easily as it was granted. An investor relying on it should record which notice it relies on and when it was checked.
If the number is too high
Three honest answers are available when a business cannot justify NPR 20 million. None of them is to overstate the commitment.
Where the investment is in information technology and the activity appears on the automatic route list, use that route and the exemption. Where the foreign party brings a brand, a process, a system or a service rather than capital, a technology transfer agreement is a separate approval with no minimum investment attached. Where the foreign party is a non-resident Nepali, a different statute applies with different conditions.
What does not work is approving a larger figure than the business needs in order to look credible, then failing to remit it. The remittance schedule under rule 9 is enforceable, and the file that shows an unfunded approval is the same file the central bank will read years later when the shareholder wants to take money out.
Sources
-
Foreign Investment and Technology Transfer Act, 2075 (2019)
Government of Nepal (text published by the Department of Industry) · Authenticated 2019 — in force, as amended · Tier 1 — Primary legal instrument
Supports: Section 3(3), that approval shall not be given below an amount specified by notification in the Nepal Gazette.
Accessed 26 August 2026
-
Foreign Investment in Nepal 2024
Department of Industry, Ministry of Industry, Commerce and Supplies · October 2024 · Tier 2 — Official publication
Supports: The NPR 20 million minimum and its attribution to the ministry notice of 14 November 2022; the approximate USD 150,000 conversion; and the statement that there is no minimum threshold for IT investors using the automatic route.
Accessed 26 August 2026
-
Foreign Investment — investor guidance page
Department of Industry · Last updated 16 Magh 2080 (January 2024) · Tier 2 — Official publication
Supports: That a foreign investor must invest at least NPR 20 million and that there is no upper cap; the NPR 20,000 refundable deposit after approval.
Accessed 26 August 2026
-
Nepal — Minimum threshold for foreign investment in Nepal, Investment Policy Monitor
UNCTAD Investment Policy Hub · Measure dated 23 May 2019 · Tier 3 — Multilateral institution
Supports: That the minimum was raised to NPR 50 million on 23 May 2019 from a previous NPR 5 million.
Accessed 26 August 2026
-
Pioneer Law Associates · Gazette notification of 2 October 2023 · Tier 6 — Professional or news source
Supports: That the gazette notice of 2 October 2023 provides the minimum capital requirement is not triggered for information-technology industries investing through the automatic route, and cites the gazette at rajpatra.dop.gov.np reference 25417.
Accessed 26 August 2026
-
Foreign Investment and Technology Transfer Regulations 2077 (2021) — summary
PKF T R Upadhya & Co. · January 2021 · Tier 6 — Professional or news source
Supports: Rule 9 capital injection timetable, including the banded first tranche and the 70%/30% split around commercial operation.
Accessed 26 August 2026
-
Minimum foreign investment amount cut to Rs20 million
The Kathmandu Post · 14 October 2022 · Tier 6 — Professional or news source
Supports: Contemporaneous reporting of the cabinet decision to reduce the minimum, ahead of the ministry notice.
Accessed 26 August 2026
Related guides and next steps