The government has removed the ceiling on foreign direct investment (FDI) proposed to enter Nepal through the automatic approval route, aiming to further ease investment procedures and attract more foreign capital.
A Cabinet meeting on Thursday authorized the Ministry of Industry, Commerce and Supplies to scrap the existing limit on FDI inflows processed through online platforms. Government Spokesperson and Home Minister Om Prakash Aryal announced the decision at a press briefing on Friday.
Previously, the automatic route allowed FDI approvals up to Rs 500 million, with exceptions for information and technology–related firms. Nepal has been implementing an automated, one-window FDI system since May 2023, initially for investments up to Rs 100 million, to simplify and speed up approvals for foreign investors.
Under the system, foreign companies create user IDs on the Department of Industry’s (DoI) online platform, submit required details, and declare their country of registration. If all criteria are met, approval certificates are issued instantly. Approved companies must then submit their project proposals to the DoI before commencing operations.
In the first six months of the current fiscal year, Nepal received FDI commitments worth Rs 39.23 billion, of which Rs 2.80 billion came through the automatic route. To boost inflows, the government has revised several laws, including the Foreign Investment and Technology Transfer Act, and reduced the minimum FDI threshold to Rs 20 million from Rs 50 million effective October 14, 2022.
