Establish IT park in Nepal as foreigner has become one of the most attractive investment opportunities in South Asia following transformative policy reforms by the Government of Nepal. The Information Technology sector was exempted from minimum foreign investment thresholds by the Ministry of Industry, Commerce and Supplies on October 2, 2023, and the automatic route was expanded to 102 sectors with no upper investment ceiling by February 2026, making establish IT park in Nepal as foreigner accessible to small startups and large multinational corporations alike. Foreign investors are permitted by law to hold 100 percent ownership in IT park ventures without local partnership requirements, a privilege that is unmatched in many neighboring countries where joint venture mandates restrict foreign control. Understanding how to establish IT park in Nepal as foreigner is considered essential by investment experts because the process involves multi-agency coordination including the Department of Industry, Office of Company Registrar, Nepal Rastra Bank, and Department of Information Technology, each with specific compliance requirements that must be satisfied sequentially. Furthermore, the existing Banepa IT Park infrastructure and the planned new IT hub at Khumaltar in Lalitpur provide ready-made ecosystems for foreign investors seeking operational facilities without greenfield development. The Nepal IT park foreign investment framework offers tax rebates, customs duty exemptions on equipment imports, and repatriation rights for profits and capital gains under FITTA 2019. This comprehensive tutorial is designed by legal professionals to explain every dimension of how to establish IT park in Nepal as foreigner including legal frameworks, eligibility criteria, document requirements, step-by-step registration, tax incentives, infrastructure options, and expert strategies that are recommended by attorneys to secure approval and ensure compliance. Moreover, the information presented herein is fact-checked thoroughly and updated regularly to ensure accuracy is maintained for all foreign investors planning technology park ventures in Nepal.
Establish IT park in Nepal as foreigner is defined as the process through which foreign individuals or entities create technology park infrastructure under the Information Technology Industry classification of the Industrial Enterprise Act 2076. The IT park category is explicitly listed by the Government of Nepal as an eligible foreign investment activity alongside technology parks, biotech parks, software development, data centers, cloud computing, and business process outsourcing. Additionally, the Nepal IT park foreign investment framework distinguishes between establishing a standalone IT park facility and operating within existing government IT parks such as the Banepa IT Park in Kavre district or the planned Khumaltar IT hub. The Foreign Investment and Technology Transfer Act 2019 is applied by the Department of Industry to govern equity participation, technology transfer, and profit repatriation for all foreign-invested IT parks. The Companies Act 2063 is implemented by the Office of Company Registrar for corporate formation, while the Income Tax Act 2058 governs tax obligations including the 5 percent rate for IT exports announced in the Nepal Budget 2083/84. Consequently, the process to establish IT park in Nepal as foreigner encompasses FDI approval, company registration, tax enrollment, industry licensing, infrastructure development or lease agreements, equipment importation, workforce recruitment, and ongoing compliance monitoring. Therefore, establish IT park in Nepal as foreigner is regarded as a streamlined yet multi-layered investment procedure that demands meticulous documentation, professional legal coordination, and strategic planning to navigate Nepal's regulatory environment successfully.
The statutory architecture supporting the ability to establish IT park in Nepal as foreigner is constructed by the Parliament and Government of Nepal through multiple legislative instruments. The following table summarizes the primary laws and their provisions:
| Legislation/Directive | Year | Key Provisions Related to IT Park Establishment |
|---|---|---|
| Foreign Investment and Technology Transfer Act 2075 | 2019 | 100% foreign ownership permitted; profit repatriation rights; technology transfer authorization; automatic route eligibility |
| Industrial Enterprise Act 2076 | 2020 | IT park classification under Information Technology Industry; industry registration requirements; operational compliance standards |
| Companies Act 2063 | 2006 | Company incorporation procedures; MOA/AOA requirements; shareholder rights; director obligations |
| Income Tax Act 2058 | 2002 | 5% tax on IT export earnings; tax holidays for priority industries; depreciation allowances for IT equipment |
| Immigration Act 2049 | 1992 | Business visa provisions for foreign investors; work permit authorization for technical staff |
| Nepal Budget 2083/84 | 2026 | 50% income tax exemption on IT export earnings; sweat equity exemption for IT employees; sovereign AI center establishment |
| Ministry Notification (Automatic Route) | February 2026 | 102 sectors under automatic route; no investment ceiling; no minimum threshold for IT sector; online approval within 7 days |
The Foreign Investment and Technology Transfer Act 2075 is identified as the cornerstone for those seeking to establish IT park in Nepal as foreigner because 100 percent foreign ownership is permitted by this statute and profit repatriation in convertible foreign currency is guaranteed without Nepal Rastra Bank prior approval as of December 30, 2025. Moreover, the Industrial Enterprise Act 2076 is critical because IT parks are classified by this law under the Information Technology Industry category with specific operational standards and infrastructure requirements. The February 2026 automatic route expansion is transformative for Nepal IT park foreign investment because online approval is granted within seven working days without manual scrutiny, no investment ceiling applies, and the IT sector specifically benefits from zero minimum investment requirements. Furthermore, the Nepal Budget 2083/84 enhances attractiveness for foreign IT park investors because 50 percent income tax exemption is provided on IT export earnings and sweat equity for IT employees is fully exempt from taxable income. Accordingly, a multi-layered legal framework is maintained by Nepal to ensure comprehensive governance is exercised over foreign IT park investments while maximizing incentives to attract global technology capital.
Specific categories of foreign investors are eligible to establish IT park in Nepal as foreigner under current regulations. The following groups are recognized by authorities as permitted applicants:
Specific documents and qualifications are mandated by various government agencies for foreign investors seeking to establish IT park in Nepal as foreigner. The following checklist is compiled by experts to ensure completeness:
A structured procedure is followed by foreign investors when seeking to establish IT park in Nepal as foreigner. The step-by-step tutorial is outlined below by experts:
Step 1: Prepare Investment Strategy and Documentation
The investment strategy is developed by the foreign investor with clear objectives for the IT park including target tenants, service offerings, infrastructure requirements, and financial projections. All required documents are assembled by the investor or legal representative including passports, corporate registration certificates, financial proofs, and project reports.
Step 2: Obtain Foreign Investment Approval via Automatic Route
The online application is submitted by the investor or attorney through the Department of Industry automatic route portal. For IT parks, no minimum investment threshold applies and no upper ceiling restricts the amount. Approval is granted automatically within seven working days and an FDI Approval Letter is issued by the Department of Industry specifying approved investment amount and foreign shareholding percentage.
Step 3: Reserve Company Name at Office of Company Registrar
Three proposed company names are submitted by the applicant through the OCR online portal at ocr.gov.np. Name availability is verified by the system and reservation is granted for thirty-five days. The name must include "Pvt. Ltd." suffix for private limited companies.
Step 4: Prepare Memorandum and Articles of Association
The MOA is drafted by legal professionals defining company objectives including IT park development, technology infrastructure provision, software development, BPO services, data center operations, and related activities. The AOA establishes internal governance rules, director powers, shareholder rights, and operational procedures compliant with the Companies Act 2063.
Step 5: Complete Company Registration with OCR
Signed MOA, AOA, FDI Approval Letter, passport copies, address proof, and application forms are submitted to the OCR online or in person at Tripureshwor, Kathmandu. The Certificate of Incorporation and Company Registration Number are issued by OCR within five to seven working days. Registration fees for FDI companies have been waived by recent reforms.
Step 6: Register for PAN and VAT at Inland Revenue Office
The company registration certificate is presented by representatives at the Inland Revenue Office for Permanent Account Number registration. VAT registration is completed if projected annual turnover exceeds NPR 5 million. Taxpayer identification is essential for claiming IT sector incentives.
Step 7: Complete Industry Registration at Department of Industry
The incorporated company is registered by the Department of Industry as an Information Technology Industry under the IT park classification. Industry registration certificate is issued and the company becomes eligible for sector-specific incentives and benefits.
Step 8: Register with Nepal Rastra Bank for Investment Recording
Foreign investment infusion is recorded by the company at Nepal Rastra Bank within six months of approval. Post-inflow recording has replaced prior approval requirements as of December 30, 2025. The Investment Certificate is obtained from NRB after capital is deposited in a local commercial bank.
Step 9: Open Corporate Bank Account and Infuse Capital
A corporate bank account is opened by the company at a Nepali commercial bank authorized by Nepal Rastra Bank. Foreign currency or convertible Nepali rupee accounts are established based on preference. The approved foreign investment amount is transferred by the investor and deposited into the account.
Step 10: Obtain Business Operation License and Municipal Registration
The company is registered at the local municipal office where the IT park is located. Business operation license is obtained and renewed annually. Building permits and construction approvals are secured if greenfield IT park infrastructure is developed.
Step 11: Import Equipment Under Duty Exemptions
IT equipment, servers, networking gear, and software are imported by the company under customs duty exemptions available for IT industries. Temporary importation with bank guarantees is processed through the Film Development Board customs facilitation for large-scale equipment.
Step 12: Recruit Workforce and Obtain Work Permits
Nepali IT professionals are recruited through standard employment procedures. Foreign technical experts are hired with work permits obtained from the Department of Labour under IT sector provisions. Business visas are secured by foreign directors and managers through the Department of Immigration.
Step 13: Commence Operations and Maintain Compliance
The IT park commences operations with tenant onboarding, infrastructure management, and service delivery. Annual returns are filed with OCR, tax returns with IRD, industry compliance reports with DOI, and FNMIS registration is completed for all foreign employees.
Significant tax benefits are provided by Nepali law to foreign investors who establish IT park in Nepal as foreigner. The following table summarizes the incentive framework:
| Incentive Type | Provision | Legal Basis |
|---|---|---|
| Income tax on IT exports | 5% rate; 50% exemption on export earnings | Nepal Budget 2083/84; Income Tax Act 2058 |
| Sweat equity for IT employees | Fully exempt from taxable income | Nepal Budget 2083/84 |
| Customs duty on IT equipment | Exemption or reduced rates for capital goods | Industrial Enterprise Act 2076 |
| VAT on digital services | 10% discount for digital payments | Nepal Budget 2083/84 |
| Tax holiday for priority industries | Up to 10 years for specific IT subsectors | Income Tax Act 2058 |
| Depreciation allowance | Accelerated depreciation for IT infrastructure | Income Tax Rules |
| Repatriation of profits | Full repatriation in convertible currency | FITTA 2075 |
| Repatriation of capital gains | Permitted after tax clearance | FITTA 2075; NRB Circular December 2025 |
| Dividend withholding tax | Standard rates apply; treaty benefits available | Income Tax Act 2058 |
| Social security for foreign employees | Not mandated for employees on foreign payroll | Labor Act 2074 |
The 5 percent income tax rate on IT export earnings is emphasized by experts as highly competitive globally, and the additional 50 percent exemption announced in Budget 2083/84 effectively reduces the rate to 2.5 percent for qualifying export revenues. Moreover, the removal of Nepal Rastra Bank prior approval for profit repatriation as of December 30, 2025, eliminates a major bureaucratic hurdle that previously delayed foreign investor returns.
Foreign investors seeking to establish IT park in Nepal as foreigner have multiple infrastructure pathways available. The following options are recognized by authorities:
The estimated costs for foreign investors seeking to establish IT park in Nepal as foreigner vary based on scale and infrastructure approach. The following table provides indicative cost ranges:
| Cost Category | Estimated Amount (USD) | Notes |
|---|---|---|
| Minimum investment (IT sector) | No minimum required | Zero threshold under automatic route |
| Company registration (OCR fees) | Waived for FDI companies | Recent reform eliminated registration fees |
| FDI approval application | NPR 20,000 security deposit | Refundable upon capital infusion |
| Legal and professional fees | $2,000 - $10,000 | Varies by firm and service scope |
| Office lease (Kathmandu, annual) | $15,000 - $50,000 | Depends on location and size |
| Land lease for IT park (per ropani, annual) | $1,000 - $3,000 | Negotiable with local landowners |
| IT equipment and infrastructure | $50,000 - $500,000+ | Scales with park capacity |
| Work permits per foreign employee | $200 - $500 annually | Department of Labour fees |
| Business visa (foreign directors) | $100 - $300 annually | Department of Immigration fees |
| Annual compliance and accounting | $3,000 - $8,000 | Tax filing, audit, returns |
Specific challenges are encountered by foreign investors seeking to establish IT park in Nepal as foreigner. The following issues are recognized by practitioners with recommended mitigation approaches:
Recent developments are observed by practitioners as the government intensifies efforts to attract foreign technology investment. The automatic route expansion to 102 sectors in February 2026 is identified as transformative for Nepal IT park foreign investment because IT parks are explicitly included and no investment ceiling applies. Moreover, the Nepal Budget 2083/84 announced by Finance Minister Dr. Swarnim Wagle on May 29, 2026, establishes a Sovereign AI Compute Centre at Syuchatar and offers 50 percent income tax exemption on IT export earnings, creating a supportive ecosystem for AI and technology park development.
Furthermore, the removal of Nepal Rastra Bank prior approval for foreign equity injection as of December 30, 2025, streamlines capital inflow procedures significantly. The One Stop Service Centre at the Department of Industry centralizes DOI, OCR, NRB, and IRD services for foreign investors. Additionally, the Digital Nepal Framework continues to drive broadband expansion and data center development nationwide.
The ICT sector received foreign investment commitments of Rs 998.9 million for 236 projects in the first five months of FY 2025/26 alone, demonstrating growing international interest. Meanwhile, legal advisory services are expanded by firms such as Attorney Nepal PVT LTD to assist foreign investors when complex FDI approvals, compliance issues, or infrastructure negotiations are encountered during efforts to establish IT park in Nepal as foreigner.
Expert legal and procedural assistance is provided by Attorney Nepal PVT LTD for foreign investors seeking to establish IT park in Nepal as foreigner. The firm's investment lawyers and corporate consultants are experienced in handling FDI approvals, company registration, tax optimization, and ongoing compliance for technology sector clients. Furthermore, comprehensive services are offered by the firm including:
Immediate consultation is recommended by experts when IT park investment is planned because FDI approval timelines, document authentication, and infrastructure negotiations require several weeks of lead time. Moreover, early engagement is emphasized by Attorney Nepal PVT LTD because the automatic route requires precise documentation and errors in initial applications cause delays that are avoidable through professional preparation. The firm may be contacted by foreign investors through their official website or Kathmandu office when assistance is required. Therefore, professional guidance is ensured by Attorney Nepal PVT LTD to maximize approval success and operational efficiency for all foreign investors seeking to establish IT park in Nepal as foreigner.
Q1: Can foreigners own 100% of an IT park in Nepal?
Yes, 100 percent foreign ownership is permitted by FITTA 2075 for IT park investments. No local partner is required by law.
Q2: What is the minimum investment to establish IT park in Nepal as foreigner?
No minimum investment is required for the IT sector under the automatic route effective October 2023. Foreign investors may establish IT parks with any capital amount.
Q3: How long does FDI approval take for IT park establishment?
Automatic route approvals are granted within seven working days by the Department of Industry. Standard route approvals take fifteen to thirty days.
Q4: What taxes apply to IT park operations in Nepal?
IT export earnings are taxed at 5 percent with an additional 50 percent exemption under Budget 2083/84. Sweat equity for IT employees is fully exempt. Standard corporate tax applies to domestic revenue.
Q5: Can profits be repatriated from Nepal IT park investments?
Yes, full repatriation of profits, dividends, and capital gains is guaranteed by FITTA 2075 in convertible foreign currency. NRB prior approval was removed on December 30, 2025.
Q6: What infrastructure is available for IT parks in Nepal?
The Banepa IT Park (Kavre) and planned Khumaltar IT Hub (Lalitpur) offer government facilities. Foreign investors may also establish private IT parks on leased land.
Q7: Are customs duties exempted for IT equipment imports?
Yes, customs duty exemptions or reduced rates are available for IT capital goods under the Industrial Enterprise Act 2076. Specific exemptions require DOI certification.
Q8: Can foreign employees work at Nepal IT parks?
Yes, work permits are obtained from the Department of Labour for foreign technical experts. Business visas are issued by the Department of Immigration for directors and managers.
Q9: What is the automatic route for IT park FDI?
The automatic route allows online FDI approval without manual scrutiny for 102 sectors including IT parks. No investment ceiling applies and approval is granted within seven days.
Q10: Can land be purchased by foreigners for IT parks in Nepal?
No, foreigners cannot own land in Nepal. Long-term lease arrangements with Nepali landowners are structured by legal professionals for IT park development.
Q11: What documents are required for IT park FDI approval?
Required documents include passport copies, project report, financial credibility certificate, corporate registration documents, power of attorney, and commitment letter.
Q12: Can Attorney Nepal PVT LTD assist with IT park establishment?
Yes, Attorney Nepal PVT LTD is retained by foreign investors to manage the entire process to establish IT park in Nepal as foreigner including FDI approval, company registration, tax optimization, and compliance.
The following authoritative sources are referenced by this guide and are recommended for further verification of how to establish IT park in Nepal as foreigner:
The information presented is intended for general educational purposes only and does not constitute legal or investment advice. The process to establish IT park in Nepal as foreigner is subject to amendment by the Government of Nepal and regulatory details are revised periodically by relevant ministries. Readers are strongly advised to consult qualified investment lawyers and verify current regulations directly with official government sources before making investment decisions. Attorney Nepal PVT LTD shall not be held liable for consequences arising from reliance on this information. This content is updated as of May 30, 2026.
May 30, 2026 - BY Admin