FDI Policy Nepal Latest (2026)
Foreign Direct Investment (FDI) policy in Nepal in 2026 is governed by a combined framework of the Foreign Investment and Technology Transfer Act, 2019 (FITTA), the Industrial Enterprises Act, 2020, the Public-Private Partnership and Investment Act, 2019, and updated notifications issued by the Government of Nepal and Nepal Rastra Bank. The latest policy direction shows a clear shift toward liberalization, expansion of automatic approval, sectoral opening, and simplified capital entry rules.
The 2026 FDI policy focuses on making Nepal a more accessible investment destination while maintaining regulatory oversight on sensitive sectors.
Expansion of Automatic Route in FDI Policy
One of the most significant updates in Nepal’s latest FDI policy is the expansion of the automatic approval route.
On 16 February 2026, the Government of Nepal expanded the automatic route to 102 industrial areas across multiple sectors, replacing earlier restricted coverage.
Key features of this policy update include:
- Expansion from limited sectors to 102 industrial activities
- Inclusion of manufacturing, IT, tourism, agriculture, and services
- Removal of earlier investment ceiling of NPR 500 million for automatic approval
- Faster approval without full manual processing for eligible sectors
This reform reduces dependency on lengthy approval procedures from the Department of Industry and improves ease of entry for foreign investors.
Removal of Investment Ceiling in Automatic Route
A major change in the latest FDI policy is the removal of the investment cap under the automatic approval system.
Earlier, investments above NPR 500 million required manual approval. This restriction has now been removed.
Implications of this change:
- Large-scale foreign investment can now enter under automatic route (if sector qualifies)
- Reduced bureaucratic intervention in eligible industries
- Increased speed in project implementation
- Greater investor confidence in high-value sectors
However, sensitive sectors still require approval through Investment Board Nepal or DOI.
Minimum Investment Policy Changes
The latest FDI policy continues the general minimum investment requirement of:
- NPR 20 million minimum foreign investment
However, important sector-based relaxation exists.
Key updates:
- IT, software development, data services, and digital industries may be exempt from minimum threshold
- Technology-based startups may enter under relaxed conditions
- Traditional sectors still require NPR 20 million minimum
This dual structure supports both large-scale industrial investment and small-scale digital entrepreneurship.
Sectoral Liberalization Under Latest Policy
Nepal’s 2026 FDI policy expands investment opportunities in multiple sectors.
Fully liberalized or highly open sectors:
- Hydropower and renewable energy
- Manufacturing industries
- Tourism and hospitality
- Construction and infrastructure
- Information technology and outsourcing
- Agriculture and agro-processing
The policy encourages foreign participation in export-oriented and job-creating sectors.
Restricted Sectors (Negative List Policy)
Despite liberalization, Nepal maintains a negative list under FITTA, 2019.
Restricted sectors include:
- Cottage and small-scale domestic industries
- Personal service businesses (salons, tailoring, etc.)
- Some retail trading activities
- National security–sensitive sectors
These restrictions ensure protection of local micro-businesses and strategic industries.
Foreign Exchange and Repatriation Policy Updates
The latest FDI policy also strengthens foreign exchange management under Nepal Rastra Bank.
Key improvements:
- Easier inward remittance approval process
- Faster dividend repatriation approval
- Simplified capital return procedures
- Digital documentation for NRB approvals
This improves liquidity flow and reduces delays in profit repatriation, which has historically been a concern for foreign investors.
Investment Approval Authorities (Latest Policy Structure)
The FDI policy clearly defines the approval structure:
- Department of Industry (DOI): Small and medium foreign investment
- Investment Board Nepal (IBN): Large-scale infrastructure projects (above NPR 6 billion)
- Nepal Rastra Bank (NRB): Foreign exchange approval and monitoring
- Office of Company Registrar (OCR): Company incorporation
This division ensures specialization and regulatory balance.
Technology Transfer Policy Expansion
The latest FDI policy broadens the scope of technology transfer agreements.
Key features:
- Inclusion of IT, AI, cloud computing, and digital services
- Recognition of cross-border service-based business models
- Flexible royalty and licensing structures
- Easier approval compared to equity investment
This reflects Nepal’s shift toward a digital and service-based economy.
Policy Shift Toward Digital and Green Investment
The 2026 FDI policy strongly promotes:
- Renewable energy investment (hydropower, solar)
- Digital economy (IT parks, BPO, data centers)
- Climate-friendly industries
- Export-oriented manufacturing
This aligns with Nepal’s long-term economic strategy of sustainable and technology-driven growth.
One-Window Service Improvement
The latest policy strengthens the one-window investment facilitation system.
Improvements include:
- Integrated online approval systems
- Reduced inter-agency delays
- Faster company registration after approval
- Digital submission of documents
This reduces procedural friction and improves investor experience.
Key Legal Framework Supporting Latest FDI Policy
The latest FDI policy operates under:
- Foreign Investment and Technology Transfer Act, 2019
- Industrial Enterprises Act, 2020
- Foreign Exchange (Regulation) Act, 1962
- Nepal Rastra Bank Foreign Investment Bylaws
These laws collectively ensure regulatory control and investor protection.
FAQs on FDI Policy Nepal Latest
What is the latest FDI policy change in Nepal?
The latest change is the expansion of the automatic approval route to 102 industries and removal of the previous investment ceiling, allowing faster and larger investments in eligible sectors.
What is the minimum FDI requirement in Nepal in 2026?
The general minimum investment requirement is NPR 20 million. However, IT and digital sectors may be exempt under the automatic route depending on policy classification.
Which sectors are open for foreign investment in Nepal?
Open sectors include hydropower, tourism, manufacturing, IT, agriculture, infrastructure, and many service industries. These sectors are prioritized for foreign capital inflow.
Who approves foreign investment in Nepal?
The Department of Industry approves standard investments, while Investment Board Nepal handles large-scale infrastructure projects. Nepal Rastra Bank regulates foreign currency inflow and repatriation.
Is profit repatriation allowed under latest FDI policy?
Yes, foreign investors can repatriate dividends and capital gains after approval from Nepal Rastra Bank and submission of required financial documents.
Conclusion
The latest FDI policy of Nepal in 2026 reflects a strong shift toward liberalization, digitalization, and investment facilitation. Expansion of the automatic route, removal of investment ceilings, and improved foreign exchange mechanisms demonstrate Nepal’s effort to attract global capital. While regulatory safeguards remain in restricted sectors, the overall policy environment is increasingly investor-friendly and aligned with international investment standards.