Government guidelines for registration of an Investment Company

Sep 21, 2023


On 2078/04/25, the ministry has published a notice in the Nepal Gazette setting out the terms and subject matters for the operation of such Investment Companies. It categorizes [not ideally] on the terms to be complied by the local Investment Company and Foreign Investment Company, however, when read in entirety the notice seems to be directed towards the regulation related to Foreign Investment Company.

Key Highlight of the notice


  1. The company registration process and regulation of the investment company should and will be carried according to the prevalent laws.
  2. Investment Company has to specify the industry in which it is going to invest
  3. Investment Company has to submit a disclosure regarding its ultimate beneficiary

Minimum capital requirement: The minimum investment amount to establish an investment company is set at 1 billion Nepali rupees (8.44 million U.S. dollars).

Currency of Investment: Foreign Investment Company should specify the currency of the investment, whether the investment would be in foreign currency or NPR

Investment Form: Investment can only be made in the form of equity, investment in the form of loans, bonds, debentures will not be allowed.

Demarcation of the investment area:

  1. Investment Companies are only allowed to invest in industries that are classified according to the prevailing IEA and the industries that are open to foreign investment under the prevailing FITTA.
  2. During the registration process, the foreign investment company has to specify its investment area such that the investment is made within Nepal.
  3. Investment companies are prohibited to invest in Stock Broker companies, real estate businesses.
  4. The investment companies are prohibited to invest in the stocks traded in the secondary market.

Prohibited actions:

  1. The investment company is not allowed to perform any functions of banks or financial institutions.
  2. The investment company is not allowed to perform any function of a Co-operative institutions.
  3. Investment vide Shell Company or Shell Bank is not allowed
  4. Foreign Investment Company cannot take a loan from a local bank or use the bank guarantee of a foreign bank to take loans from local banks


  1. Foreign Investment Company has to obtain a separate investment approval from the authorities for investing in each additional sector.
  2. Foreign Investment Company is to follow rules, policy, guidelines of NRB while injecting and repatriating funds. It has to comply with the procedures mentioned in the prevailing FITTA during the cash inflow in Nepal and cash outflow from Nepal.
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