The Government of Nepal has enacted amendments to the Foreign Investment and Technology Transfer Act (FITTA) 2081, effective from 1 Baisakh 2081 (mid-April 2024). These changes represent the most significant overhaul of Nepal's foreign investment framework in over a decade.
Key Changes
Streamlined Approval Process
The Department of Industry now has authority to approve FDI applications up to NPR 5 billion without referral to the Investment Board.
Processing timelines capped at 30 working days for standard applications (previously no statutory limit).
Single-window facility expanded to include NRB clearance, OCR registration, and PAN issuance in a unified process.
Sector Liberalization
Retail and wholesale trade partially opened to foreign investment — joint ventures with minimum 51% Nepali ownership now permitted for enterprises above NPR 200 million.
IT and IT-enabled services: 100% foreign ownership now permitted (previously capped at 80%).
Agriculture: foreign investment now allowed in commercial farming on leased land exceeding 25 bighas.
Repatriation & Exit
Investors may now repatriate capital gains from share transfers without NRB approval for amounts below USD 1 million.
Exit procedures simplified: voluntary liquidation timeline reduced from 2 years to 9 months.
Dividend repatriation no longer requires a separate tax clearance certificate if annual audit is current.
Implications for Existing Investors
Companies with existing FDI approvals should review their agreements against the new framework. Several restrictions that required specific approval letters have been liberalized, meaning current operational constraints may no longer apply. We recommend a compliance review to identify optimization opportunities.
How Veritas Can Help
Our foreign investment practice works with the Department of Industry, NRB, and OCR on live mandates every week. We can conduct a rapid assessment of how these amendments affect your operations and identify any structural changes that would improve your position under the new framework. Reach out to our team for a confidential consultation.
Need a detailed assessment?
Our team can provide a confidential briefing on how this development affects your specific situation.
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