The Ministry of Industry, Commerce, and Supplies (hereafter, “the ministry“) issued a notification in the Nepal Gazette on 16 February 2026 (2082/11/04) (“Notification“), expanding on Section 42 of the Foreign Investment and Technology Transfer Act, 2019 (“FITTA”). The Notification broadens the scope of the automatic route by incorporating one hundred and two (102) areas of industry across seven (7) categories, thereby facilitating the liberalization of Foreign Direct Investment (“FDI”) in Nepal.
Following the amendment to Nepal’s investment laws in 2025, this notification represents the latest concerted reform effort in Nepal’s evolving FDI framework.
The reforms introduced by the notification are as follows:
| S.N. | Reform Area | Description |
|---|---|---|
| 1 | Repeal of prior notification | Repeal and supersession of the notification dated 2 October 2023 (2080/06/15) governing the automatic route |
| 2 | Upper investment ceiling | Removal of the NPR 500 million cap on FDI eligible for approval under the automatic route |
| 3 | Minimum investment requirement | Removal of the minimum FDI threshold for specified Information Technology and digital industry sectors |
Repeal of the previous notification
Notification removes quantitative and sectoral constraints imposed under the earlier regime, and expands access to automatic approval for FDI.
The Ministry had issued a notification on 2 October 2023 (2080/06/15) imposing:
- An upper limit of NPR 500 million on foreign investment eligible for approval under the automatic route; and
- Eligibility limited to sixty (60) designated areas of industry.
Foreign investment proposals exceeding NPR 500 million or falling outside the designated sixty (60) industry areas were required to undergo approval through the manual approval route, involving prior scrutiny and discretionary approval.
The Notification repeals and supersedes the 2 October 2023 notification in its entirety, replacing it with a substantially liberalized regime that expands both sectoral coverage and investment limits under the automatic route.
Removal of the upper ceiling for the automatic route
The upper limit of NPR 500 million applicable to approval under the automatic route has been removed for the listed one hundred and two (102) industry sectors.
Consequently, foreign investment proposals exceeding NPR 500 million are now eligible to receive an FDI certificate automatically upon submission of an online application through the Department of Industry’s (“DOI”) information management system, without requiring prior approval from the DOI.
This reform signifies that prospective investors are no longer required to undergo a tedious approval process involving physical presence and manual documentation.
Elimination of the minimum investment threshold for the IT and digital industry
The Notification clarifies that the minimum FDI investment requirement does not apply to certain Information Technology and digital industry sectors.
Previously, under the 14 November 2022 (2079/07/28) notification, a minimum investment threshold of NPR 20 million applied to foreign investment, subject to limited exceptions (including joint investment with Non-Resident Nepalis or the Government of Nepal).
Under the current framework, this minimum investment requirement is expressly inapplicable to enterprises operating within the following IT and digital industry sectors:
- Technology Park
- IT Park
- Bio-tech Park
- Software Development
- Data Processing
- Digital Mapping
- Business Process Outsourcing (“BPO”) and Knowledge Process Outsourcing (“KPO”)
- Data Centres, Data Mining, and Cloud Computing
- Web Portals, Web Design Services, and Web Hosting
For all other sectors, the general minimum investment requirements prescribed under applicable laws and notifications continue to apply.
Conclusion
The Notification represents a transformative leap toward a liberalized investment climate in Nepal, effectively dismantling the bureaucratic procedure. By abolishing the NPR 500 million upper ceiling and extending the automatic approval route to 102 diverse industrial sectors, the government has transitioned from a restrictive gatekeeper to a proactive facilitator of global capital.
📍 Trade Tower, Kathmandu ✉️ [email protected] 📱 +977-9803831179