The Automatic Route is a simplified foreign investment approval mechanism introduced by the Government of Nepal under Section 42 of the Foreign Investment and Technology Transfer Act, 2075 (2019) and Foreign Investment and Technology Transfer Regulations, 2077 (2021).
It enables eligible foreign investors to obtain foreign investment approval automatically, by submitting applications through an online system operated by the Department of Industry (DOI) (http://imis.doind.gov.np/) without undergoing the traditional approval process.
This facility is designed to expedite and simplify Nepal’s FDI approval process, reduce procedural delays, and make Nepal a more competitive destination for foreign investment.
I. Applicability: When Can the Automatic Route Be Used?
The foreign investment proposals of any investment amount may be processed through the automatic route mechanism, provided they fall within the prescribed eligible industry categories.
The facility applies to the following two scenarios:
a. Incorporation of a new company, either as a 100% foreign-owned subsidiary or as a joint venture; and
b. Capital increment in an existing company that already has foreign investment.
The initial list of industries eligible for approval under the automatic route was prescribed through the Ministry of Industry, Commerce and Supplies Gazette Notification dated 2080/06/15 (02 October 2023). Subsequently, recent Gazette Notification dated 2082/11/04 (16 February 2026) have expanded the scope by adding additional industry categories to the automatic framework.
Note: Prior to the Nepal Gazette notice dated 2082/11/04 (16 February 2026), the automatic route was subject to a maximum total capital investment ceiling of NPR 500,000,000 (Nepalese Rupees Five Hundred Million). This ceiling has now been removed.
II. Industries Eligible for the Automatic Route
The Gazette Notice specifies that foreign investment can be made through the automatic route in industries across several broad sectors, subject to the total capital investment limit. Sectors include:
- Energy Based Industries
| 1. Industries producing energy from wind, solar power, biomass, or other resources, and industries manufacturing machine/equipment used for energy production 2. Biogas-based energy 3. Energy produced as a by-product of sugar industry 4. Energy feasibility study |
2. Agriculture and Forest Products Based Industries
| a) Fruit processing, Vegetables processing |
| b) Establishment and operation of green house |
| c) Silk processing |
| d) Tea processing |
| e) Coffee processing |
| f) Herbs processing |
| g) Rubber processing |
| h) Cold Store (For Storing Local Fruits and Vegetables) |
| i) Natural fibers products processing |
| j) Paper, resins and other non-timber based industries |
| k) Producing plants through new technology (Tissue Culture & others) |
| l) Cotton processing |
4. Tourism Industries
| a) Motel, hotel, resort, and restaurant |
| b) Healing center |
| c) Meeting conference and sports tourism |
| d) Fun park, water park |
5. Infrastructure Industries
| a) Conference centre |
| b) Vehicle parking garage |
| c) Export processing zone |
| d) Cargo complex |
| e) Polluted water treatment industry (waste water treatment plant) |
| f) Film city construction/Film studio construction |
| g) Commercial complex |
| h) Private warehouses |
6. Information Technology, Communication Technology, and Information Dissemination Technology Industries
| a) Technology park |
| b) IT park |
| c) Biotech park |
| d) Software development |
| e) Data processing |
| f) Digital mapping |
| g) Business process outsourcing (BPO) |
| h) Knowledge process outsourcing (KPO) |
| i) Data center |
| j) Data mining |
| k) Cloud computing |
| l) Web portal |
| m) Web designing service, Web hosting |
7. Service Industries
| a) Mechanical Workshop |
| b) Printing related services |
| c) Construction business |
| d) Photography |
| e) Hospitals |
| f) Nursing homes, Polyclinics, Operation of Rehabilitation Centre, Physiotherapy clinics, Ayurveda and other alternative hospitals |
| g) Operation of physical exercise, yoga-meditation and practice centres |
| h) Sports services, Swimming pool |
| i) Cold storage operation |
| j) Garbage collection and cleaning, garbage recycling |
| k) Construction related heavy equipment rental, maintenance and operation |
| l) Veterinary services |
| m) Health checkup (X-Ray, CT Scan, MRI, Ultrasound, and health check-up lab) |
| n) Operating already constructed infrastructure (such as assembly and conference buildings, fuel and fuel gas supply pipelines, warehouses and storage, airports, stadiums, sports, complexes, roads, power plant, railway services, cargo complex services) business |
| o) Cargo business (international cargo business) |
| p) Dry cleaning business |
| q) Advertising services |
| r) Advertising content preparation service |
| s) Soil Testing Service |
| t) Health club |
| u) Electrical survey |
| v) Mineral studies and research |
| w) Equipment repair and installation services |
8. Manufacturing Industries
| 1. Production of of animal and fish feed |
| 2. Meat Processing and Packaging of Livestock and Fish |
| 3. Production of Oil , Fat etc. from Basic Raw Materials |
| 4. Production of Starch or Glucose |
| 5. Production of Bakery Products |
| 6. Production of Confectionary and Biscuit |
| 7. Production of Sugar |
| 8. Manufacturing of Beverages (Non-Alcoholic) |
| 9. Manufacturing of Textile, Garment And Clothes (Using new and Re-used materials) |
| 10. Manufacturing of Electronic Home Appliances |
| 11. Manufacturing of Goods Using Plastic Or Rubber |
| 12. Manufacturing of Bag, Sack, Suitcase, Trolley Bag or Other Similar Bag for Carrying Things |
| 13. Manufacturing of Wooden Goods Other than Traditional and Cultural Art Based |
| 14. Manufacturing of Toiletries Products like Toothpaste, Soap, Shampoo, Washing Powder |
| 15. Manufacturing of Products Based on Glass |
| 16. Manufacturing of Cycle, Scooter, Motorcycle and Four Wheeler and accessories used in such vehicle |
| 17. Manufacturing of Electric Lamps, Switch, Meter, Fuse, Wiring Cable, Compressor, and Similar Products |
| 18. Manufacturing of Goods used in Medical, Surgical, Orthopedic Works |
| 19. Manufacturing of Electrical Wire |
| 20. Electrical wire manufacturing |
| 21. Cement production |
| 22. Brick tile production |
| 23. Iron rod production |
| 24. Factory production |
| 25. Production of chemical fertilizers and organic fertilizers |
| 26. Lubricant production |
| 27. Khandsari (sugar) production |
| 28. Industries like rice mill, oil mill, flour mill, dal mill |
| 29. Matchstick, Candles, Incense products |
| 30. Production of materials of fabrication |
| 31. Manufacture of iron materials |
| 32. Zinc leaf production |
| 33. Other food processing products such as noodles, tea, cheese balls, etc. |
| 34. Electronic and Electrical Materials Manufacturing |
| 35. Electrical wire (cable) production |
| 36. Color, pigment production |
| 37. Paper, Pulp Paper Manufacturing |
| 38. Production of stationery materials |
| 39. Water treatment |
| 40. Bitumen and bitumen emulsion production |
| 41. Furniture, plywood production |
| 42. Manufacture of tires and tubes |
Conclusion
The Automatic Route facility represents a significant step toward strengthening Nepal’s investment facilitation framework. It streamlines foreign investment approvals by enabling online automatic foreign investment certification for eligible industries, without any maximum capital ceiling.
The system applies to both new company incorporations and capital increments in existing foreign-invested industries and covers a broad range of sectors such as energy, agriculture, infrastructure, and more. This modernization supports Nepal’s broader strategy to attract competitive foreign capital, and boost economic growth.
With the removal of the earlier capital ceiling, the automatic route now allows foreign investment proposals of any investment size to be processed under this simplified mechanism, subject to eligibility criteria. This reform further reinforces Nepal’s commitment to attracting competitive foreign capital, enhancing ease of doing business, and promoting sustainable economic growth.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice, advertisement, personal communication, solicitation or inducement. No attorney-client relationship is created through this content. Gandhi & Associates assumes no liability for any consequences resulting from actions taken based on information contained herein.
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