Potential areas of foreign investments

Industry Category Maximum FDI Permissible Name of the competent authority (Regulator) Relevant Acts
& Policies
Remarks

Manufacturing

100% Department of Industry Industrial Enterprises Act, 1992 No additional procedures required except for certain industries which required special permission
Financial Services/Banks and Finance Companies and Branch Office of a Foreign Bank (20 to 85)% Nepal Rastra Bank

Nepal Rastra Bank Act
Foreign Investment and Technology Transfer Act (FITTA)

Foreign Exchange Regulation Act (FERA)
Approval of Nepal Rastra Bank required thereafter, registration of the company is to be done and application filed for license to operate a bank, or financial institution
Airline Industry (49 to 95)% Civil Aviation Authority of Nepal

The Aviation Policy 2063 (2006)

Civil Aviation Act, 2053, Civil Aviation Rules, 2052 (1996)
FDI is permissible in domestic airlines, international airlines, flying schools and repair and maintenance work
Telecommunications 80% Nepal Tele-communication Authority, Ministry of Information and Communication Tele-communication
Act
Approval of Nepal Tele-communication Authority is required to operate services and obtain license prior to operation
Roads, Ropeways, Cable car 100% Transport Management Office - -
Media & Advertising – TV, Radio and Newsprint 100% Ministry of Information and Communication

The Nepal Broadcasting Regulation, 2052 (1995)

National Broadcasting Act 2049 (1993)
The MOCI and NTA provides license for establishing media and broadcasting business in Nepal
Pharmaceutical & Chemical Industries 100% Department of Health Services Industrial Enterprises Act Drug Act Approval from the Department of Drug Administration for setting up the industry, manufacturing and selling the drug is required
Textile and Garment 100% Department of Industry Industrial Enterprises Act No specific requirements
Agriculture and Dairy 100% Ministry of Agriculture and Co-operatives - No specific requirements
Consultancy and Management Services 51% No Specific Foreign Investment and Technology Transfer Act (FITTA) Accountancy, Engineering, Legal & Management Services not allowed
Mining 100% Department of Mines

Department of mines and Geology (Department) Act
Mines and Minerals Act, 2050 (1993)

Mines and Minerals Regulations, 2056 (1999)
License from the Department of Mines has to be obtained for mining activities in Nepal
Hydro-Power Generation 100% Department of Electricity Development

Electricity Act

Electricity Rules
 
Power Trade - Department of Electricity Development

Electricity Act

Electricity Rules
Export of power to India is permitted for companies generating electricity
Transmission Lines 100% Department of Electricity Development

Electricity Act

Electricity Rules
-
Hotels, Resorts & Restaurant 100% Ministry of Tourism

Tourism Policy, Tourism Act

Approval from the Department of Tourism required for operating restaurant, hotels, resorts
IT & IT enabled (BPO, KPO) 100% Department of Science and Technology IT Act No specific requirements
Vocational, Educational Training and Coaching 100% No specific Foreign Investment and Technology Transfer Act Only Skill Training and Language allowed
Hospitals & other Medical Services 100% Ministry of Health & Population

Nepal Health Professional Act,

Nepal Medical Council
Approval from the Ministry of Health is required for establishing hospitals and providing medical services
Recreational Health Centers 100% Ministry of Health & Population - -
Solid Waste Disposal & Management 100% Ministry of Environment, Science and Technology Environment Protection Act -
Film Industry 100% Cinema Board of Nepal Motion picture (Production, Exhibition and Distribution) Act 2026 (1969) and Rules Film produced in the language if the nation not allowed (FITTA, 1992)
Cargo Industry 100% No specific - Domestic Cargo not permitted under FDI
Medical Education 100% Ministry of Education MoHP’s Directive on Establishment, Operation, Standards and Infrastructure of Private and Non-governmental Health Institution, 2061 Affiliation to a University has to be entered into and approval from the Ministry of Education required
Engineering Education 100% Ministry of Education Technical Education Policy of Ministry of Education Approval is granted under the Technical Education Policy of Ministry of Education
Management Education 100% Ministry of Education Technical Education Policy of Ministry of Education Approval is granted under the Technical Education Policy of Ministry of Education
Insurance & Re-insurance JV Company Branch Office Insurance Board Insurance Act and related directives Approval from the Insurance Board has to be obtained prior to commencement of business in Nepal
Construction 100% No Specific Local Self Governance Act Approval from the Department of Road, Transport and Physical Planning required
Thermal & Alternative/ Renewable energy 100% Ministry of Energy Electricity Act Allowed only in Energy Generation

 

Source : Nepal-India Chamber of Commerce and Industry – Doing Business in Nepal (A Guide for Indian Investors)

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