For many non-resident Nepalis, investing back home is both a financial decision and an emotional one. There is a family business to support, or a plot of land to develop, or simply a wish to keep a stake in the country you grew up in. The good news is that NRNs are welcome to invest, and the framework exists. The part that trips people up is the same one that catches every foreign investor: the approvals come before the money, not after.
This guide explains how NRN investment works in Nepal, where the diaspora route differs from ordinary foreign investment, what the process costs and requires, and what to get right so your capital is not stranded when you want it back.
Quick answer
Non-resident Nepalis can invest in Nepal under the Foreign Investment and Technology Transfer Act (FITTA), which treats NRNs as permitted foreign investors. The usual approvals apply: sector eligibility, approval from the Department of Industry, and registration with the Office of the Company Registrar. In some cases the NRN route carries a lower entry threshold than the general foreign investment minimum, so it is worth confirming the current policy before you structure anything.
Is the NRN route different?
NRNs are foreign investors under FITTA, so the framework is familiar. What differs is treatment. Certain concessions are available to the diaspora, and some technology-based or smaller investments can qualify for a lower threshold than the general minimum. These are policy details that change, which is exactly why they should be checked at the time you invest rather than assumed from something read a year ago.
First, a word on who counts as an NRN. The Non-Resident Nepalis Act covers Nepali citizens residing abroad, and also persons of Nepali origin who have taken foreign citizenship. Both categories are generally eligible to hold an NRN card, issued through the designated Nepali authorities, and holding that card is worth doing before you invest rather than after. It is the document that evidences your status to banks, regulators and later to the tax authorities when you want funds to leave the country. An NRN who invests without keeping the status paperwork current often discovers the gap at exactly the wrong moment, when a dividend or capital payment is queued for remittance.
The card itself does not confer investment rights. Those come from FITTA and the applicable policies. But in the mechanics of banking and approvals, being able to prove status cleanly removes a layer of friction that otherwise slows every step.
Ways an NRN can invest
- A new company in an eligible sector, usually a private limited company with the NRN as shareholder. This is the most common route.
- Investment in an existing company, by subscribing to new shares, subject to sector limits and the company's approval. Buying shares from an existing shareholder is a different transaction again, requiring its own approvals.
- Listed securities, meaning portfolio investment in shares on the Nepal Stock Exchange, which follows separate rules for non-residents.
- A branch or joint venture, where the NRN invests alongside Nepali or other partners.
- Technology and knowledge contributions, where the NRN's expertise is valued as part of the investment, which in some cases affects the minimum capital that must be brought in.
Each of these routes has its own filing path. The new company route is the cleanest for first-time investors because everything is created fresh and the paper trail is unambiguous. Buying into an existing company is perfectly workable but introduces the diligence questions that come with any secondary purchase: what are you actually buying, and do the company's records say the same thing as its promoters.
Minimum investment and sector eligibility
The general minimum foreign investment threshold in Nepal is currently NPR 20 million, and individual sectors carry their own limits or are reserved for Nepali citizens. Energy, tourism, IT and manufacturing are broadly open. Some service and retail activities are reserved. Technology-based investments in certain cases benefit from a lower or waived threshold. Confirm sector eligibility before committing money, because a structure that cannot be approved wastes both the filing cost and months of time.
A few practical notes on eligibility. The negative list, meaning sectors closed or restricted to foreign investment, includes certain retail trade, personal service activities and locally oriented small-scale businesses. Where a sector is open but capped, the cap applies to the foreign shareholding percentage, so a joint venture with a Nepali partner may be the only viable structure rather than a preference. And approval authority depends on the size and nature of the project: the Department of Industry handles most applications, while larger or certain strategic projects go to the Investment Board Nepal. Knowing which door to knock on before you file saves a month of redirection.
Sector rules are the single most common cause of wasted effort in this space. An NRN reads that a sector is open, commits to a lease and a business plan, and only then discovers that the precise activity, as distinct from the broad industry, is reserved. A short eligibility check at the start, ideally with someone who reads the current policy rather than a summary from a forum, prevents this entirely.
The process, step by step
- Confirm sector eligibility and the minimum investment that applies to an NRN.
- Submit the foreign investment application to the Department of Industry and obtain approval. This is the step that must precede the money, not follow it.
- Reserve the company name and prepare the memorandum and articles of association, with the shareholding structured exactly as the approval specifies.
- Incorporate at the Office of the Company Registrar and obtain the certificate.
- Register for PAN and, where applicable, VAT.
- Open a corporate bank account and route the investment through authorised banking channels, so the capital inflow is recorded properly from the first remittance.
Timelines vary with the completeness of the file and the season, but applicants who have their documents in order, including notarised and authenticated papers from abroad, generally move through the stages in a matter of weeks rather than months. The stage that most often slips is the foreign investment approval, because any gap in the paperwork sends the file back into the queue.
Do you need to be in Nepal?
Much of the process can be handled remotely. A shareholder resolution and a power of attorney can be notarised abroad and authenticated, and a local representative can complete the filings. In practice, being available for one visit at the key banking stage smooths things out, but it is not always essential.
A few points for those managing this from abroad. Documents executed overseas generally need notarisation and authentication, or consular legalisation, before Nepali authorities will accept them, and this takes time in itself, so start it early. Appointing a representative with a clean power of attorney is essential, and the document should be drafted to cover the specific acts needed, including banking, registration and tax filings, rather than a vague authorisation. And keep clear communication channels with whoever is filing, because the most common cause of delay in remote setups is a query from an office that nobody reads for a week. Our guide to setting up a company in Nepal walks through the incorporation step by step.
A worked example
An NRN in the United States wants to buy 30% of an existing Nepali software company. Because the sector is open and the investment meets the threshold, the route is manageable. He starts by confirming eligibility, then files for foreign investment approval, then subscribes to new shares. The capital enters through his bank, not hand to hand, and is recorded at the central bank.
Two years later, when he wants to repatriate a dividend, the paper trail from that original transfer is what makes the remittance smooth. The company's records show the shareholding, the tax filings show the dividend, and the bank can trace the original inflow against the outgoing payment. An NRN who wires money informally in year one often finds the same funds impossible to send back in year three. The money is not lost, but it is stuck, and unsticking it costs far more in professional fees than doing it properly at the start would have.
Repatriation of profits and capital
Profits, dividends and, on winding up, capital can be repatriated subject to Nepal Rastra Bank approval and the company's tax obligations. The key is documentation: funds should enter through the banking system and the equity should be reflected in the company's records. Keep your NRN status and papers current, because repatriation depends on being able to show exactly where the money came from.
A few things to understand about how this works in practice. Dividends can normally be remitted after the company has cleared its tax liabilities for the relevant year, and the remittance is processed through the banking system with the approval trail in place. Capital repatriation on winding up follows liquidation and tax clearance, and requires that the original investment, plus any approved increases, is documented. Royalty and technical fee remittances follow their own rules under the foreign exchange framework. In every case, the currency question resolves itself if the inflow was clean, and becomes a problem if it was not.
Nepal Rastra Bank's foreign exchange guidelines are the operative document here, and they are updated from time to time. Confirming the current position before you structure the investment, particularly where repatriation is a priority rather than an eventual possibility, is worth the conversation.
Costs and timelines
Budget for more than government fees. The line items typically include government filing fees for investment approval and incorporation, notarisation and authentication costs for documents executed abroad, professional fees for legal and advisory work, and the cost of your own time or travel if you visit. None of these are large individually, and the aggregate is modest relative to the investment most NRNs make.
The timeline is usually measured in weeks for a straightforward new company, longer where the sector requires additional clearance or where documents from abroad need consular processing. The expensive timeline is the one that starts twice, because a structure that cannot be approved had to be rebuilt. That is where the real cost lives, and it is entirely avoidable with an eligibility check before commitment.
Common pitfalls
- Committing to a sector that is closed to foreign investment.
- Bringing funds in informally, which then blocks repatriation.
- Skipping notarisation and authentication, causing delays at the registrar or the bank.
- Confusing company registration with foreign investment approval, when both are required.
- Investing without current NRN status documentation, which surfaces at the remittance stage.
- Relying on policy summaries that are a year or two out of date, when thresholds and sector rules change.
- Structuring around a minimum investment figure without checking whether the specific sector has its own requirement.
Frequently asked questions
Can an NRN own 100% of a Nepali company?
In sectors not on the negative list, generally yes. Where a sector is capped for foreign shareholding, a joint venture structure may be required, so eligibility should be confirmed for the specific activity before structuring.
Is the minimum investment lower for NRNs?
Sometimes, depending on the sector and the type of investment, including technology-based cases where the threshold can be lower or waived. Confirm the current policy before structuring, because these details change.
Can an NRN invest while living abroad?
Yes, largely. Notarised and authenticated documents and a local representative allow most of the process to be handled remotely, though being available for the key banking stage can help.
Can an NRN repatriate profits?
Yes, after tax clearance and Nepal Rastra Bank approval, provided the original investment was documented and entered through the banking system. An informally funded investment creates problems here.
Does an NRN need foreign investment approval?
Yes. NRNs are treated as foreign investors under FITTA and require approval from the Department of Industry, or the Investment Board Nepal for larger projects, before the capital is brought in.
Can an NRN buy land in Nepal?
An NRN who holds Nepali citizenship generally can. An NRN who has taken foreign citizenship faces the same property restrictions as other foreign nationals. See our guide on foreigners buying property.
What is an NRN card and do I need one?
The NRN card is issued to eligible non-resident Nepalis and persons of Nepali origin through the designated Nepali authorities. It is not itself an investment licence, but it evidences your status to banks and authorities, and holding one smooths both investment and remittance.
Do I have to visit Nepal to complete the investment?
Usually not for the full process. Most filings can be done by a local representative under a power of attorney, with documents notarised and authenticated abroad. A visit at the banking stage is helpful but not always essential.
How long does the approval process take?
For a complete file in an open sector, approval and incorporation typically take weeks rather than months. Incomplete documents, or documents from abroad that have not been properly authenticated, are the most common cause of delay.
What happens if I send money to Nepal before approval?
This is the classic mistake, and it creates lasting problems. Unapproved inflows are difficult to record as equity, and the same funds become hard to repatriate later. Approval must precede the money, always.
How Pluto Associates can help
We advise non-resident Nepalis on eligibility, structuring, approvals and compliance, and can manage the full incorporation from abroad. If you would like a clear view of your situation, contact our team for a consultation, message us on WhatsApp, or call +977 9802356987. We will tell you what is possible, what it costs, and how long it takes.