1. How can I find out if my business activity is on Nepal’s negative list?

Check the FITTA 2019 negative‑list schedule; we compare your activity with the latest list and tell you whether it is prohibited, restricted, or open for investment.

2. Do I need a Nepali partner to invest in Nepal?

A local partner is not mandatory under FITTA, but certain sectors require a minimum Nepali ownership percentage; our review determines the exact threshold for your project.

3. What does the One‑Stop Service Center (OSSC) do in the FDI process?

The OSSC, within the Department of Industry, receives the complete FDI application, verifies documentation and forwards it to NRB for foreign‑exchange clearance; it is the primary filing point for projects up to NPR 6 billion.

4. How long does the FDI approval take after I submit the application?

Typical processing time is three to six weeks if all documents are complete and no additional information is requested by DoI or NRB.

5. Can I repatriate profits immediately after capital infusion?

Profit repatriation requires a tax clearance certificate from IRD and foreign‑exchange approval from NRB; the process can take several weeks after the annual tax filing is accepted.

6. Which documents must be translated into Nepali for the FDI application?

All core corporate documents—memorandum of association, shareholder agreements, board resolutions—and any sector‑specific licences must be translated and notarized in Nepali.

7. Is a Shram Swikriti work permit required for all foreign employees?

Yes, any foreign national performing work in Nepal must obtain a Shram Swikriti from the Department of Labour and Occupational Safety, regardless of visa category.

8. What happens if my investment falls into a restricted sector on the negative list?

Restricted sectors may allow limited foreign participation after obtaining a specific ministerial exemption; we prepare the exemption request and restructure the investment to meet the conditions.

Investment Due Diligence Nepal | FDI Review Services

Investment due diligence in Nepal is a legal audit of a foreign investor’s proposed project against FITTA, the Company Act 2063 and the negative‑list of prohibited sectors. Our firm identifies gaps, prepares the FDI filing and secures the approvals needed to move capital safely.

What is Investment Due Diligence & Negative List Review in Nepal?
Investment due diligence in Nepal is a detailed legal and commercial audit of a proposed foreign investment, checking compliance with the Foreign Investment and Technology Transfer Act (FITTA) 2019, the Company Act 2063, and the sector‑specific negative list. The negative‑list review confirms whether the intended activity is prohibited, restricted, or permitted, allowing investors to address gaps before any capital is transferred.

When should investors engage a lawyer for due‑diligence and negative‑list checks?

If the activity appears on the negative list and you need clarification on permissible sub‑activities.
When the Department of Industry (DoI) or Investment Board Nepal (IBN) requests additional documentation that conflicts with the company’s memorandum of association.
If foreign shareholders or directors must be verified by the Office of Company Registrar (OCR) and the Inland Revenue Department (IRD).
When foreign‑exchange clearance from Nepal Rastra Bank (NRB) delays the FDI approval letter.
If post‑investment compliance notices (tax clearance, work‑permit requirements) arise after capital infusion.

Foreign investment approval process

How to conduct Investment Due Diligence & Negative‑List Review in Nepal

Scope definition – We meet the investor, outline the business plan, target sector and capital amount, and decide whether the project stays below the NPR 6 billion threshold (OSSC route) or needs IBN approval.
Document collection & verification – Corporate documents (MOA, shareholder agreements, board resolutions) are gathered, translated into Nepali, and cross‑checked with OCR records to confirm authorized and paid‑up capital. Missing translations often trigger DoI resubmission requests, adding weeks.
Negative‑list cross‑check – Using the latest FITTA schedule, we compare the intended activity against prohibited sectors. If a conflict exists, we advise restructuring or applying for sector‑specific exemptions.
Regulatory clearance drafting – We prepare the FDI application, the Investment Approval Letter draft, Capital Investment Fund (CIF) account setup instructions, and any sector licences (e.g., NTA for telecom).
Submission to the One‑Stop Service Center (OSSC) – The dossier is filed at the DoI OSSC. We track receipt, respond to clarification notices, and liaise with NRB for foreign‑exchange approval. Delays are common when the CIF account is not opened in a licensed Nepali bank before filing.
Post‑approval compliance setup – After the approval letter, we assist with tax registration (PAN/VAT), Shram Swikriti work‑permit applications, and visa recommendation letters for foreign executives.
Ongoing monitoring – We establish a compliance calendar for profit repatriation, withholding‑tax filings, and annual reports to IRD and DoI, preventing future breaches.

Company registration in Nepal

Practical risk‑mitigation services

Identify sector bans and ownership limits before any capital moves.
Draft and file FDI applications while coordinating with OSSC, NRB and sector regulators.
Structure transactions (joint‑venture or wholly‑owned subsidiary) to satisfy FITTA requirements and secure the CIF account.

Fees and realistic timelines

Fees: Basic due‑diligence for projects under NPR 6 billion ≈ NPR 150,000‑300,000; larger strategic investments may exceed NPR 500,000.
Timeline: Document review = 5‑10 business days; overall OSSC approval = 3‑6 weeks, provided all documents are complete and foreign‑exchange clearance is obtained. Typical delay triggers: untranslated documents, pending NRB clearance, DoI/IBN information requests, OCR/IRD shareholder verification.

Common compliance pitfalls

Broad company objectives that unintentionally include a negative‑list activity → immediate rejection.
Skipping CIF account setup → capital infusion not recognised.
Neglecting tax registration → withholding‑tax penalties on dividends.
Overlooking Shram Swikriti work permits → immigration fines.
Submitting untranslated documents → DoI rejection or prolonged review.
Assuming sector exemptions without ministerial approval → investment may be barred.

What clients receive after our review

A written negative‑list compliance report with sector‑restriction analysis and restructuring recommendations.
A complete FDI application package, including the Investment Approval Letter draft and CIF documentation.
Certified copies of corporate filings, shareholder agreements and tax registration certificates.
A post‑approval compliance checklist covering profit repatriation, withholding‑tax filings and visa/work‑permit obligations.

Investment Due Diligence & Negative List Review