Doing Business Nepal in 2023, Why ?

March 1, 2023

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Nepal is ranked 94th in the World and 3rd in South Asia in “Ease of Doing Business Report 2020” by the World Bank Group. Let's list the things attraction of doing business in Nepal.


• Nepal is strategically located between two large and rapidly growing economies China and India, with easy access to markets of more than 2.6 billion people.

• Nepal has large pool of capable workers (out of total population, about 57% are of working age i.e.15-59 years). Nepal has relatively low cost of labor compared to other peer countries.

• Foreign investors are allowed 100% ownership of a company in a majority of sectors. Repatriation of capital and profits are allowed by law.

• Minimum threshold for foreign investment has been reduced to NPR 20 million (earlier it was NPR 50 million).

• Land ownership is allowed in company’s name.

• On arrival tourist visa allowed for visitors. Business visa for investors, simplified process.

• Various bilateral investment protection and double tax avoidance arrangements are in place. Doing Business In Nepal

• Nepal has signed Bilateral Investment Promotion and Protection Agreement (BIPPA) with India, Finland, Germany, Mauritius, UK, and France.

• Double Taxation Avoidance Agreement signed with Austria, Bangladesh, China, India, Korea, Mauritius, Norway, Pakistan, Qatar, Sri Lanka and Thailand.

• Compared to other countries in South Asia, Nepal offers the lowest tax burden in the region. Some of the reasons for comparatively high ROI in Nepal include:

• Huge investment potential in tourism, hydro-power, agriculture, mine and mineral sectors;

• Abundance of natural resources;

• General income tax rate of 25% (20% in priority sector like Energy, Transport Infrastructure and Manufacturing), Value Added Tax (VAT) of 13%;

• Tax Holiday for specific sectors

• Income tax concession on profits from exports;

• On average 50% Income tax on income earned in foreign currency from BPO, Software programming, Cloud Computing and other services based on IT for financial year 2023.24;

• 100% Tax exemption for 15 years and 50% Tax exemption for next 6 years for reservoir based and semi-reservoir based hydropower with capacity more than 40 MW;

• Withholding tax rate of 15% on royalties and technical & management fees;

• Customs, excise duties, and VAT levied on raw materials and auxiliary raw materials of export-oriented industries is reimbursed to the exporter on the basis of the amount of exports within 60 days of application;

• Nepal has open boarder access to India. Nepal has duty free access to China for around 8,000 products. Nepal has duty free access to US market for 77 items for 10 years starting from 2016



Please email us at hello@rudolphservice.com for more information on Doing Business in Nepal as it changes timely.

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