ILLUSTRATION: SHUTTERSTOCK
FOR MOST of Nepal’s post-independence history, a law called the Act Restricting Investment Abroad stood as an absolute barrier. Passed in 1964 under King Mahendra, it did roughly what its name suggested: prevented Nepali companies and individuals from investing capital outside the country. Violators faced a fine equal to the full investment amount, up to six months in prison or both. Entrepreneurs could export goods and services. They could collect foreign currency from overseas clients. They could not put money into a foreign subsidiary, buy shares in a foreign company or open a branch office in another country. The law sat on the books for six decades, its existence more a reflection of Nepal’s inward economic focus than any strategy to contain its businesses.
That began to change in late January 2025, when the government issued an ordinance amending the Foreign Investment and Technology Transfer Act, the Companies Act and the Foreign Exchange Regulation Act. The ordinance did not repeal the 1964 law but it created the first legally operational exemptions within it for technology companies. Under the revised framework, IT companies can apply to the Nepal Rastra Bank for permission to establish branch offices abroad and invest their foreign earnings in overseas entities, up to a ceiling of $1m per company. In March 2025 the Foreign Investment and Technology Transfer Act was formally amended, and in June 2025 the NRB updated its bylaws to formalise the approval process. The sequence was the most significant liberalisation of Nepal’s outward investment framework since independence.
By December 2025 three Nepali companies had received NRB approval to transfer capital abroad. iDream Technologies became the first to announce it publicly, disclosing plans to establish a branch office in Delaware (the standard US corporate domicile) to service American clients directly rather than from Kathmandu. Two other approvals had been granted by the same date. The pipeline is dismal yet the symbolism is real.
The companies that have expanded internationally at commendable scale did so either before these rules changed or through structures that sidestepped the domestic legal constraint. Chaudhary Group, Nepal’s only billion-dollar business, has operated across more than 30 countries for decades, structured through offshore holding vehicles and licensing arrangements that let its Wai Wai brand and hotel management businesses function internationally without breaching the ARIA at home. IME Group, which runs one of South Asia’s largest remittance networks, operates in multiple countries through international licensing rather than formal outward equity investment. Both are multinationals in practice. Neither became one through a route now available to others.
The IT sector is where the new exemptions bite most, because it is where most of Nepal’s outward-looking businesses actually sit. The NAS-IT industry association estimated exports crossed the $1bn mark in 2025, though formal NRB balance-of-payments data captures significantly less. TingTing, the AI voice startup, signed a partnership with a Sri Lankan firm this year and is establishing an office in Colombo—the most recent example of a small Nepali technology company making an international move under the new framework. Programiz, which has over a million monthly users globally learning to code, exports intellectual value every day but has not yet used the new provisions to formalise a presence in the markets it serves. The tools are available. The companies are still deciding what to do with them.
The actual version of Nepal’s multinational moment is this: the most restrictive legal barrier has been modified rather than removed, and the modification applies to a specific sector under specific conditions. For technology companies with NRB approval and a clear international business case, the path is now open in a way it was not in 2024. For a construction company, a trading house or a consumer goods manufacturer, the ARIA of 1964 remains the operative law. The $1m outward investment ceiling the NRB has set is enough to rent an office and hire a few people—adequate for a first move, insufficient for building a subsidiary of any operational substance.
What the 2025 reforms have done is remove a specific absurdity for one sector. A technology company cannot compete globally while legally prevented from establishing the international presence that global competition requires. Nepal spent six decades doing exactly that, and the repeal of that constraint for the technology sector is worth taking seriously.
What follows (the actual emergence of Nepali companies that operate at scale beyond their borders) will depend on things that legal reforms alone cannot provide: founders willing to take the risk, investors willing to fund it and the slow accumulation of the brand credibility that makes a foreign customer trust an unfamiliar name from a country they mostly associate with mountains.
That trust takes time. The legal permission for technology companies took six decades. The building can begin now. ■
