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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

Nepal has once again plunged into a major crisis after the violent Gen Z uprising that led to the collapse of the KP Sharma Oli government. 

To address the demands of protestors, a civilian government led by former Chief Justice Sushila Karki has been formed. Although the constitution does not provide for appointing a prime minister outside the legislature, President Ram Chandra Poudel invoked his inherent authority as the protector of the constitution, citing the abnormal and complex political situation that followed the protests of Sept 8 and 9.

Prime Minister Karki has set March 5 next year as the date for national elections. However, top leaders of the major parties—Nepali Congress, CPN-UML, and CPN (Maoist Center)—are still under the protection of the Nepal Army and have yet to issue official statements on the polls.

The parties have opposed the government’s decision to dissolve Parliament without first ensuring conditions for free, fair, and credible elections. Their initial reactions prompted President Poudel to issue a statement on Sept 13 urging the parties to calm public anger and prepare for elections. He has been credited with finding a constitutional solution while averting attempts to dismantle the republic and revive either monarchy or military rule.

For the parties, the only real option is to participate in the March 5 elections. Failure to do so would push the country into further instability, as the interim government will lose its legitimacy after six months. Some parties may push instead for restoring Parliament and forming a new government from within it to oversee elections.

Concerns also loom over whether the Supreme Court may invalidate Karki’s appointment and the dissolution of Parliament. The constitutional foundation of the current government is weak, and precedent is mixed: in 2020 and 2021, the court restored Parliament after Oli’s dissolutions, ruling that it could not be dissolved before completing its full term. Yet, some argue that the Court might uphold Karki’s appointment under the principle of necessity and in light of the President’s intervention during a volatile crisis.

Even if the court allows it, the larger challenge is whether the interim government can create an environment for free and fair elections. It has announced the formation of a high-level judicial commission to investigate killings, destruction of property, and human rights violations during the protests.

Meanwhile, the security situation remains precarious. After widespread vandalism and looting of police posts, security forces are under severe strain. Leaders and cadres of mainstream parties continue to face direct and indirect threats. Without a proper investigation into the violence, parties may refuse to contest elections. The Ministry of Home Affairs faces the enormous task of providing shelter and logistics for police, who have long operated without adequate arms or ammunition, leaving them ill-equipped to maintain order.

This weakness was exposed during the recent protests and earlier in the May 15 demonstrations organized by royalist groups. The police, lacking arms due to a decade-long procurement freeze and recent destruction of their stock, were unable to respond effectively. While the 2017 and 2022 elections were largely peaceful, the risk of election violence now looms high, making it imperative to prepare security forces adequately.

Despite these challenges, political parties have signaled willingness to join elections if the government ensures security. Speaking in Kathmandu, CPN-UML General Secretary Shankar Pokhrel said the Karki-led government must move decisively toward holding elections and guaranteeing safety. However, the UML has not yet held an official meeting to finalize its position.

Within Nepali Congress, several leaders have warned that a prolonged legislative vacuum would deepen the crisis, urging participation in elections. Senior Maoist leaders too have indicated support for the government’s efforts.

Still, it may be premature to draw conclusions. Top leaders remain absent from the political stage. NC President Sher Bahadur Deuba and his spouse Arzu Rana Deuba, both severely injured during the protests, are still hospitalized. With many party offices and leaders’ residences burned down, it may take weeks before the major parties formally declare their stance.

Nepali Congress General Secretary Gagan Thapa has emphasized that holding free and fair elections and protecting the constitution are the party’s central priorities. “The government has pledged to conduct elections within six months, and Nepali Congress, as a responsible party, should support this effort,” Thapa said. “Our priority must be to bring the constitution and democracy back on track through free and fair elections.”

The environment is what surrounds us. Women, with their deeper aesthetic sense, often perceive and value its beauty in ways that shape culture and tradition. Aesthetics, the philosophy of beauty and the arts of life, is closely tied to how we view and experience the environment. Environmental aesthetics, then, refers to the study of the beauty of the natural world. From ancient times, humanity has been a lover of beauty, and the secret of beauty lies in nature—the storehouse of eternal charm.

Women are the true custodians of cultural, artistic, and archaeological heritage. They play an important role in protecting the environment, serving as a constant source of strength, energy, and inspiration. In Nepal, a land blessed with mighty mountains and milky rivers—including Sagarmatha, the world’s highest peak—the natural environment has always been central to life and culture. As Kalidasa wrote in his monumental work Raghuvamsha, rivers are like mothers and mountains like fathers. Civilizations have long flourished on riverbanks, and the confluence of rivers—sangam—is considered deeply sacred. In India, Prayagraj holds this status, while in Nepal, Devghat is revered. The Bagmati is not merely a river, but a cradle of civilization, just as the Ganges embodies centuries of cultural heritage.

Water means life, symbolizing not only physical sustenance but also spiritual cleansing. Riverbanks have always been sacred spaces for men and women alike. In Nepal, married women observe the annual Swasthani ritual by fasting for twenty-four hours without a drop of water, praying for their husbands’ long lives. This ritual, performed on the banks of the Salinī River near Kathmandu, is deeply spiritual—but the river itself is polluted, posing serious health risks. Women with weakened immunity during fasting often suffer from waterborne diseases, a reminder that the environment must remain clean and pure.

Similarly, Maithil women celebrate the great folk festival Chhath by fasting for over thirty-six hours. Water is essential to this festival, yet most rivers, rivulets, and ponds used for the rituals are highly polluted. The health risks are immense. Still, Maithil women demonstrate remarkable environmental consciousness: they sanctify and purify the riverbanks, create beautiful aripan folk art, and burn sandalwood and incense to purify the surroundings. Religious devotion and environmental care are deeply intertwined in their practices. This cultural heritage reflects a duty to hand over a clean, healthy environment to future generations.

Tree worship, too, is integral to Nepali culture. Women venerate banyan trees on Batsavitri, and mango and mahua trees during marriage ceremonies—a tradition of tree cults that has endured for centuries. The message is clear: protecting green trees is essential for a pollution-free environment. Yet today, deforestation threatens Nepal’s once-famous forests. The old slogan, “Green forests are Nepal’s wealth,” feels like a memory, as brutal tree-cutting continues. One poet pleaded:

“O woodcutter,

Do not cut me.

I will give you shade,

I will give you shadow.”

This intertwining of nature and spirituality can be seen in Lumbini, the birthplace of the Buddha, once a lush grove described as an earthly paradise. Yet archaeologists—both Nepali and foreign—have focused only on material remains, ignoring the study of ancient landscapes. The same neglect applies to sacred gardens in Janakpur, such as Manimandap and Tirhutiya Gachhi, and in Siraha, where the historic Salhes garden (Raja Phoolbari) flourishes with medicinal plants and trees. Local myths speak of miraculous flowers and divine apparitions, yet these sites remain unexplored, under threat from encroachment, and absent from tourism initiatives. Remarkably, in Salhes garden, a single woman priest continues to safeguard the ecological environment—an extraordinary tradition linking women directly to nature.

UNESCO’s role in environmental protection has also been noteworthy. Its work in Chitwan and Sagarmatha National Parks has set important examples, combining heritage conservation with biodiversity protection. By involving indigenous communities, UNESCO has fostered connections between heritage tourism, sustainability, and conservation. It also supports government policy-making and encourages dialogue on future challenges such as climate change, sustainable tourism, and digital transformation.

In what has emerged as a dramatic turn of events in Nepal’s evolving political crisis, a group of youths staged a protest outside the Prime Minister’s official residence in Baluwatar at midnight, demanding resignation of newly appointed Prime Minister Sushila Karki.

Karki was appointed as the first female Prime Minister of Nepal on April 12 upon the recommendation of the Sudhan Gurung-led ‘Hami Nepal’ group.

They staged the protest after the news came out that Prime Minister Karki appointed former Managing Director of Nepal Electricity Authority Kulman Ghising as Minister for Energy, Rameshwor Khanal as Minister for Finance, and Om Prakash Aryal as Minister for Home Affairs without consulting the youth leaders who led the anti-corruption protests that toppled the KP Sharma Oli-led government.

Aryal is the legal advisor of the Kathmandu Metropolitan City Mayor, Balen Shah. He had played the role of facilitator during the Gen Z protests.

During the protest, also attended by family members of those who lost their lives during the protests, chanted various slogans like "Prime Minister should resign," and "Justice for the victims’ family," among others.

Gurung said, “People are powerful. No one can stop us. If we have the power to choose leaders, we also have the power to take them down,” adding “While I was managing bodies, Om Prakash Aryal was hatching a conspiracy to become the minister,” Gurung said.

The ministers participating in the Karki-led interim government will take the oath of office and secrecy on Monday.

The President Office informed that newly appointed ministers will be administered the oath of office and secrecy at 11 am today.

Former Chief Justice Karki was appointed as the Prime Minister of Nepal’s interim government after days of anti-corruption protests that claimed lives of 72 people and forced Prime Minister KP Sharma Oli to resign and flee his official residence in Baluwatar.  With this appointment, she has made history by becoming the first female Prime Minister of the Himalayan nation.

According to Chief Secretary Ek Narayan Aryal, 59 protestors, 10 prisoners, and three security personnel were killed during the protests.

He said that 133 protesters and 57 security personnel, who were injured in the protests, are undergoing treatment at various hospitals.

He said that Prime Minister Karki has decided to provide free treatment to the injured, declare those who died in the protests as martyrs, and provide them with Rs 1 million each.

In accordance with Article 61 (4) of the Constitution, President Ram Chandra Paudel appointed Karki as the head of the interim government in consultation with the Nepal Army Chief and representatives of Gen Z who spearheaded the protests.

Known as Nepal’s first woman Chief Justice, Sushila Karki is admired for her clarity of thought, firm stance, and integrity during her tenure in the judiciary.

Karki served as the Chief Justice of Nepal from July 11, 2016, to June 6, 2017.

In April 2017, some lawmakers had attempted to impeach Karki accusing her of breaching the Constitution and failing to bear her duties, but the effort failed.