Discusses the legal requirements/options for joint venture/licensing in this market.
Last Published: 8/1/2019
Foreign investment is allowed in most industries through the establishment of joint ventures or wholly foreign-owned enterprises.  However, foreign investment is not permitted in defense-related industries, cottage industries, travel and trekking agencies, cigarettes, or alcohol (excluding those exporting more than 90%).  Potential investors are invited to contact the Political/Economic Section of the U.S. Embassy for the latest information on restricted and prohibited industries.
 
Nepal officially encourages foreign investment and technology transfer under the Foreign Investment and Technology Transfer Act (FITTA) of 1992.  Investment in the form of equity shares, reinvestment of earnings from share capital, and loans is included in the definition of foreign investment.  Under FITTA, technology transfer is any transfer made by agreement between an industry and a foreign investor for the: (a) use of any technological right, specialization, formula, process, patent, or technical knowledge of foreign origin; (b) use of any trademark of foreign ownership; and /or (c) acquisition of any foreign technical consulting, management, or marketing service.  While technology transfer arrangements are legally permissible, the GON has not yet determined whether they must be registered.
 
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Nepal Business Management Legislation