The Foreign Investment and Technology Transfer Act (FITTA), 2075 (2019) is the cornerstone of Nepal's strategy to attract global capital and innovation. For international investors, understanding FITTA is the first step toward a successful venture in Kathmandu. This guide highlights the key provisions, latest amendments, and procedural requirements of the Act.
1. Forms of Foreign Investment
Under FITTA, foreign investment can take several forms:
- Share Investment: Investment in foreign currency into a new or existing Nepalese company.
- Investment of Profits: Reinvesting earnings from existing businesses.
- Technology Transfer: Agreements involving patents, trademarks, designs, and technical know-how.
- Lease Financing: Leasing of equipment or machinery (within specific industry limits).
2. Investment Thresholds and Caps
As of 2026, the minimum investment threshold for foreign investors is generally NPR 20 Million (approx. USD 150,000).
- Automatic Approval: For investments below a certain threshold (currently around NPR 500 Million), an "Automatic Approval" system is being phased in to speed up the process.
- Large Projects: Investments exceeding NPR 6 Billion are managed by the Investment Board of Nepal (IBN) rather than the Department of Industries.
3. Technology Transfer Agreements (TTA)
For businesses that don't want to establish a full presence but want to license their brand or technology, FITTA provides a robust framework:
- TTA Approval: All technology transfer agreements must be approved and registered with the Department of Industries.
- Royalty Repatriation: Approved agreements allow for the repatriation of royalty payments in foreign currency.
4. Repatriation of Investment and Earnings
FITTA guarantees the right of foreign investors to repatriate their funds in foreign currency, including:
- Sale proceeds of shares.
- Dividends.
- Interest on foreign loans.
- Amounts received under Technology Transfer Agreements.
Important: All repatriations must be processed through the Nepal Rastra Bank (Central Bank) and require proof of local tax compliance.
5. Negative List: Where You CANNOT Invest
Certain sectors are restricted from foreign investment to protect local industries and national security:
- Agriculture: Poultry, fisheries, bee-keeping, and traditional agricultural practices.
- Cottage Industry: Traditional small-scale manufacturing.
- Real Estate: Purely speculative land and housing business (without construction or industrial use).
- Retail: General retail except in certain large-scale formats.
6. Expert Foreign Investment Lawyer in Kathmandu
Navigating FITTA requires a deep understanding of both the law and the practical circulars issued by the Department of Industries. Our Legal Team at LawyerInNepal has assisted dozens of international firms in successfully entering the Nepalese market.
Our FITTA Services include:
- Investment Proposal & Project Report Drafting.
- Applying for Automatic or Departmental Approvals.
- Drafting and Registering Technology Transfer Agreements.
- Assisting with Central Bank Repatriation Approvals.
Secure Your Investment in Nepal:
- Office Location: Purbi Gate, Anamnagar-29, Kathmandu 44600, Nepal.
- WhatsApp Support: +977 9766910908
- Email: lawyerinnepal.com.np@gmail.com
Disclaimer: FITTA is subject to periodic amendments via the Finance Act and Ministry circulars. Always verify the latest thresholds with a qualified investment lawyer.