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Even as daily life gradually returns to normalcy after last week’s unprecedented violence and arson triggered by the Gen Z protests, the country’s stock market will remain closed for another week.  The Nepal Stock Exchange (Nepse) has announced that secondary market trading will not resume until Sept 21, citing ongoing instability and investor concerns.

Trading had already been suspended since Sept 9 after police crackdowns on protesters a day earlier left nearly 20 people dead. The protest and the resulting wave of destruction led Nepse to extend the trading halt, in line with the Securities Act, and with the approval of the Securities Board of Nepal (Sebon), said an official from the stock exchange.

Although the initial suspension was only until Sept 17, trading will reopen on Sunday only as the trading floors of Nepse open for trading from Sunday to Thursday only.

Earlier, different associations of stock market investors had urged the regulator to keep the market shut, warning that reopening during a fragile period would lead to irrational decisions and heightened volatility. In a joint statement, Share Investors Association Nepal, Nepal Capital Market Investors Association, and Independent Investors Association said the prevailing climate had seriously affected investor confidence and that halting trading was the prudent safeguard at the moment.

Market analysts have also said that since capital markets are highly sensitive to external shocks, even minor developments can trigger sharp swings. They cautioned against reopening amid ongoing protests.

Before the suspension, the Nepse index had fallen for five consecutive days, closing at 2,672.25 points on Sept 8. Nepse has mostly traded in negative territory since hitting a four-year high of 3,002.07 points on July 29. Since then, the benchmark index has already fallen by 329.82 points. Over Rs 530bn in market value has been wiped out since the last week of July when the bourse’s capitalization touched an all-time high of Rs 5,000bn.

Foreign Direct Investment (FDI) in Nepal presents a fascinating paradox for legal and business scholars. While the nation’s legislative framework, anchored by the Foreign Investment and Technology Transfer Act, 2019 (FITTA), signals a commitment to global capital, the practical FDI approval process in Nepal remains complex and, at times, opaque. For a foreign entity seeking to invest, understanding the legal nuances is as critical as identifying a viable business opportunity. Navigating the regulatory landscape requires a meticulous approach to documentation and a clear comprehension of the roles played by various governmental bodies, including the Office of Company Registrar.

The legal framework: Statutory instruments and jurisdictional mandates

The legal foundation for foreign investment in Nepal is principally established by the FITTA, 2019, and the Industrial Enterprises Act, 2020. FITTA broadens the definition of foreign investment beyond traditional equity to include loan investments, re-investment of dividends, lease financing, and investment in venture capital funds. It is designed to be the single-window law for foreign investment, though in practice, other ancillary laws like the Companies Act, 2006, and the Foreign Exchange Regulation Act, 1962, also come into play. A key aspect of FITTA is its jurisdictional delineation. The Department of Industry (DOI) is the primary approving authority for investments up to NPR 6 billion, while the Investment Board of Nepal (IBN) handles projects exceeding this threshold. This dual-jurisdiction model is intended to streamline the process by matching the approving body to the scale of the project. However, the requirement for subsequent approvals from the Nepal Rastra Bank (NRB) for fund repatriation and foreign loan approvals adds further layers of legal compliance. A savvy law firm in Nepal is essential to help investors interpret these regulations and ensure they are compliant from the very beginning.

FDI approval and company registration in Nepal: A step-by-step procedural blueprint

The FDI process is a sequential journey with distinct legal and administrative milestones. The first and most crucial step is obtaining the foreign investment approval, which is initiated by submitting a comprehensive application to either the DOI or the IBN. This application must include a detailed project report, outlining financial projections, technical feasibility, and the proposed investment amount. Once the investment is approved, the foreign entity proceeds with Company Registration in Nepal at the Office of Company Registrar. This is a critical juncture where the foreign company is formally incorporated as a legal entity in Nepal. The documents required for registration include the foreign company's Certificate of Incorporation, Memorandum of Association, Articles of Association, and a formal resolution authorizing the investment. Following company registration, the newly formed entity must register with the Inland Revenue Office for tax purposes and, if applicable, with the local ward office. Finally, a crucial step for a foreign investor is to register the foreign investment with the Nepal Rastra Bank, as required by the FITTA, to facilitate future repatriation of profits and capital. The assistance of a specialized Law firm in Nepal is indispensable during these stages to ensure all legal requirements are met and to minimize procedural delays.

Documentation and due diligence: The cornerstone of legal compliance

A successful FDI application in Nepal hinges on the meticulous preparation and submission of a comprehensive set of documents. Legal practitioners emphasize that due diligence is not merely a formality but a non-negotiable prerequisite. The application for foreign investment approval must include, among other things, a notarized copy of the foreign company’s incorporation documents, a letter of commitment from the investor, and a bank-issued Financial Credibility Certificate verifying the investor's financial capability. This certificate is particularly crucial as it provides a legal basis for the financial viability of the project. Furthermore, depending on the nature of the industry, an Environmental Impact Assessment (EIA) report may also be required. At the Office of Company Registrar, documents such as the Power of Attorney for a local representative and passport copies of the foreign directors must be submitted. The specific requirements for Company Registration in Nepal can be intricate and vary depending on the type of business vehicle (e.g., private limited company, public company, or branch office). It is here that the expertise of a law firm in Nepal becomes invaluable, as they can navigate the minutiae of these documentary requirements and liaise with the relevant authorities on behalf of the investor.

Statistical analysis and recent trends (2024-2025): A discrepancy between law and reality

A legal framework, however robust in its design, is ultimately judged by its practical outcomes. A review of recent FDI statistics reveals a persistent disparity between the stated legal intent and the actual flow of foreign capital. According to a report by the Nepal Rastra Bank, the FDI stock in Nepal reached Rs 333bn in the fiscal year 2023/24, a 12.7 percent increase from the previous year. While this indicates a growing level of total foreign investment, a more granular analysis shows that net FDI inflows were only Rs 8.4bn for the same period. This suggests that while commitments are being made, the actual injection of funds is a fraction of the approved pledges. For the month of July 2024, FDI inflows were $14.4m, which is a nominal increase compared to the same period in the previous year. However, according to the UNCTAD's World Investment Report 2025, FDI inflows to Nepal experienced a sharp decline in 2024, falling to $57m. This stark contrast between different data sources highlights the volatile nature of FDI in Nepal. For the beginning of the current fiscal year 2025/26 (mid-July to mid-August 2025), preliminary data from the Nepal Rastra Bank shows a foreign direct investment (equity only) of Rs 691.5m. These statistics underscore a critical legal and policy challenge: the legal mechanisms for approval and registration exist, but they are not translating into consistent, large-scale investment.

In conclusion, for foreign investors in Nepal, navigating the legal landscape requires a deep understanding of the FDI approval process in Nepal. While the Foreign Investment and Technology Transfer Act (FITTA) aims to attract foreign capital, persistent procedural hurdles exist, creating a gap between investment commitments and actual inflows. To ensure success, investors must meticulously handle documentation at the Office of Company Registrar and seek guidance from a specialized law firm in Nepal. The government's continued reform efforts to streamline inter-agency coordination are crucial. Ultimately, transforming Nepal into a regional investment hub depends on addressing these regulatory inefficiencies to build investor confidence and turn the country's potential into a profitable reality.

Prabin Kumar Yadav

Kathmandu School of Law

During President Donald Trump’s state visit to the UK, US and Britain are set to announce more than $10bn in deals, covering science and technology, civil nuclear energy, and defense cooperation, Reuters reported.

Trump will meet King Charles and Queen Camilla at Windsor Castle, attend a state dinner, and hold talks with Prime Minister Keir Starmer, including a joint press conference, before returning to Washington.

The visit highlights growing economic and strategic ties between the two nations.

US appeals court has blocked former President Donald Trump from firing Federal Reserve Governor Lisa Cook, the first attempt to remove a Fed governor since 1913, Reuters reported.

The court rejected the Justice Department’s emergency request to lift a previous order that kept Cook in her role, allowing her to stay ahead of a key Fed meeting expected to cut interest rates. A lower court had ruled Trump’s allegations of past mortgage fraud likely didn’t meet the “for cause” standard required under the Federal Reserve Act.

The 2‑1 decision, with Biden-appointed judges in the majority, leaves Cook in place for now and highlights the limits of presidential power over independent central bank officials, according to Reuters.

Israel’s Health Ministry reported 481 new measles cases on Monday, bringing the total to 1,251 since early April. Officials estimate up to 4,000 may be infected, according to Xinhua.

Twenty-nine patients are still hospitalized, mostly young children, with five in intensive care. Two unvaccinated boys, aged 18 months and two years, have died.

A nationwide vaccination campaign launched in May has delivered over 142,000 doses. In outbreak-hit cities, residents — including visiting infants — can now get immediate vaccinations without appointments.

Measles is highly contagious and, while often mild, can cause severe complications and death, Xinhua reported.

President Donald Trump said Monday that US forces carried out a second strike in two weeks on a suspected Venezuelan drug vessel in international waters, killing three men. He described the targets as violent cartels and narcoterrorists threatening US security, Xinhua reported.

The first strike on September 2 killed 11 people, whom Trump identified as members of the Tren de Aragua group. Venezuelan President Nicolas Maduro had denounced that attack as unlawful and accused Washington of using false drug claims to justify regime change.

Maduro said Monday that US-Venezuela communication has broken down due to “threats and blackmail,” stressing that his country will defend itself against political and military pressure. Caracas, the capital city of Venezuela has not yet responded to the latest strike, according to Xinhua.

An emergency Arab-Islamic summit in Doha on Monday strongly condemned Israel’s strike on a residential area in Qatar, calling it a clear violation of international law and a threat to peace, Xinhua reported.

Chaired by Emir Sheikh Tamim bin Hamad Al Thani, the summit pledged full solidarity with Qatar and warned that targeting a neutral mediator undermines Gaza ceasefire talks and wider peace efforts.

Leaders denounced Israel’s actions in Gaza, urged sanctions and an arms embargo, and called for suspending Israel’s UN membership over repeated violations. They reaffirmed support for a Palestinian state based on 1967 borders with East Jerusalem as its capital and praised Qatar’s role in mediation and humanitarian aid, according to Xinhua.

Emir Tamim said the summit sent a united message against Israel’s “state terrorism” and would strengthen collective Arab and Islamic action.

US President Donald Trump has called on foreign companies investing in the United States to train American workers in advanced manufacturing sectors, including semiconductors, shipbuilding, and high-tech machinery. He suggested that foreign experts temporarily assist to ensure knowledge transfer and long-term industrial growth.

Trump highlighted the decline in US shipbuilding, stressing that learning from foreign expertise is key to rebuilding domestic capabilities and achieving independence in critical industries. He reassured investors that the US welcomes foreign participation while aiming to eventually surpass them in manufacturing excellence, according to Reuters.

His remarks come as companies, particularly carmakers from China, Mexico, and Canada, shift production to US to avoid tariffs and benefit from trade protections.

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