Gazette Notification on Automatic Route

The Ministry of Industry, Commerce and Supplies has published a gazette notification regarding an Amendment to the Foreign Investment and Technology Transfer Regulation, 2079 (2023) (“Amended Regulation”) on April 20, 2023 (Baisakh 7, 2080) pursuant to Section 51 of Foreign Investment and Technology Transfer Act, 2075 (2019) (“FITTA”). The Amended Regulation is expected to simplify the procedure for foreign investors willing to invest in Nepal and encourage more foreign investors to consider investing in Nepal.

The Amended Regulation adds a new provision as Section 8(a) in the Foreign Investment and Technology Transfer Regulation, 2077 (2021) (the “Regulation”). This Section specifies the conditions for operation of the automatic route. It allows automatic route into two forms of foreign investment – (a) incorporation of a new company as 100% subsidiary or as a joint venture, and (b) capital increment in an existing company with foreign investment.

However, it is important to note that the permissible threshold up to which automatic route shall be applicable will be provided through another gazette notification. This means that foreign investors will have to wait for further information regarding the maximum amount of investment that will qualify for automatic approval.

The Department of Industries (DOI) is implementing an electronic system for foreign investors to submit files and documents required by FITTA and the Regulation. Investors will upload documents online, with the option to revise and correct them before submission. After review and verification by the DOI, investors can obtain foreign investment approval certificate electronically along with an e-mail confirmation. This system envisages an efficient and convenient approval process for foreign investors.

Overall, the automatic route for foreign investment is a positive development for the country’s investment climate and is likely to attract more foreign investment in the near future.


“Update: Notice published on Automatic Route where Upper Ceiling and Industries Permissible for FDI has been prescribed by the GON” .

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Disclaimer: This Pioneer Law Briefing may not necessarily deal with every important aspect of the subject matter. This Briefing is intended for general information only and not to be construed as legal or other advice.


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