Starting business in Nepal

Like you say, nothing easy about setting up a business here. If I have any advice to give, in phase ONE, I can't recommend highly enough that your first move be to carry out a full survey of the nepali market to determine potential for the type of software you have in mind.  To do that, you would perhaps be well advised to first physically come to Nepal under a 150 day tourist visa, and devote your whole time to doing precisely that or, if you can find the right/competent person, hire a professional who can do the survey for you. First things first, kind of thing.
Retaining a lawyer, deciding about residency, and all these other questions, can be decided in phase TWO, in that order AFTER you have become fully convinced that based on Survey findings, you can conclude that a strong market potential and demand exists for your products in Nepal.  Forgive me for paraphrasing an old adage, but I think you will find that it is to your advantage "not to put the cart before the horse" particularly here in this part of the world where, like you say, things are difficult, especially for start-ups.

Thanks for the advice JL.
I don't need to do a survey, because the software solutions I need will be applied to an already existing business in Europe. I am quite sure what we develop has only a limited market in Nepal and India.

I have previously opened an office in India so I know the scene. The difference now is that we want to actually move to Nepal for several years, so I need to start a business there - I don't mind employing 2-4 people with web and SEO expertise etc.
We will be coming for that 5-month period to check out the scene in August. I was wondering if anyone knew
- a really good immigration lawyer
- good long term let in non-polluted area with excellent internet

I wish you luck on all three counts here in Nepal:
- finding a really good immigration lawyer
- good long term let in non-polluted area
- and of course excellent internet   ??

If you do find a good anything lawyer, let me know. I'd be interested because, so far zilch. System is the biggest culprit of them all!

I will. Right now I am talking with:
Shirshak Ghimire
Senior Associate
Pradhan, Ghimire & Associates
37-9 Gaurav Marg, Maitighar, Kathmandu, Nepal
Tel: +977 1 425 2272 | Mobile: +977 984 3035940 | Fax: +977 1 426 6422
Email: [email protected] | Web: www.pradhanlaw.com

I'll visit in person next month and see how it goes.

Assume you mean Pradhan & Associates (visit: www.pradhanlaw.com) which prior to this was operating under the label of Pradhan, Ghimire & Associates - the old name. Very frankly, don't know what changes took place inside that firm, significant or not, nor possible implications on associates or operations. You might just update your records. Can always give them a try. See what they say?

Sure - I might try some others too.

Good idea. You might just bear in mind that in this country, the terminology of a "good" lawyer is by no means always synonymous with that of a "successful" lawyer, in respect of the end results you - as client - have every right to expect from him in terms of professional services. This is due, of course, to the endemic corrupt system in which all lawyers -  good and bad - have to operate here. Regrettably, no one lawyer, as good as he may be, has the magic wand enabling him to change those conditions overnight. As it's been correctly pointed out here, it's true, nepali lawyers don't work in a vacuum. They are part and parcel of that imperfect system.
So on the one hand, there will be quantifiable "legal" fees to pay - which is s.o.p. (standard operating procedure) and fair enough, but then better be prepared for the not so legal and probably much higher amount ones which are impossible to quantify in advance, which one's lawyers are likely to have to pay under the table to corrupt officials of said system at some later point in time to get things done - and usually when you least expect it! Like they used to quip in the States in the old days "No tickie, no shirtie"!!
I imagine that if you know India, you will find none of this too surprising.
Anyway, good luck in Nepal!

welcome in nepal. hear is really huse oppertunity for business market who can do. we are alwayes be support for foreign investors.  If you have any problem feel free to contact. good luck your business in nepal.

Thanks for the kind reply. Having worked in India, I am sure it is as you describe, and it is not necessarily the individual lawyer that is the problem, but the system he or she works in. I guess the "extra" fees are part of the scene... just as long as they are affordable,

I am in no doubt you got the point.
- The amount of the "extra fees" is determined by the nature and type of service(s) rendered.
- As you will appreciate, no way that amount can be known on day one, when you walk into your lawyer's office and have your first exploratory meeting with him. Besides, it's not him who decides, but the "others" in the system. You will therefore find out later, in good time, and of course it will depend on the whims and greed of those public official(s), whose services are being sought, etc. Also if these jokers all share the same office, it's possible each of the "me too" cronies will expect a piece of the pie, and that will make the total cost even higher.
- One thing is sure. Your lawyer will never tell you who got what, and whether he got a piece of the action. No point asking. You will never know.
The only thing that can be said is that the illegal fees can run several times the legal ones!
Again, best of luck.

Adrian's question was are the "extra fees" affordable?
a. if you think they are affordable, no problem. You just pay them and make whoever your "good lawyer" - the bad or the indifferent  lawyer - that much richer and everybody is happy in the "system"
b. if you decide they are not affordable (or unethical) that's also your choice, but in that case:
    - ironically, you don't get the service you have come to expect from said "good lawyer"
   -  or they'll place your demand on the bottom of the pile, or file it away for weeks or months on end
   - or if it's litigation, you will lose any chance you had of winning your case.
As I said, question of choice, whether you pay or you do not pay the "good" lawyer in that nepali way of doing things. The system rides the waves!

All good stuff. The point is that the term so many people commonly use of "good lawyer" is almost irrelevant in the nepali context, the reason being that he is a pawn in the system. Last time around, the Chief Justice of the Supreme Court of Nepal tried her best to clean things up, only to first be subpoenaed, then ousted and finally retired after only one year in office. We can only hope she got her pension.

The more I learn about Nepal, the less I'd ever be inclined to invest my money in Nepal to start any business there. The fact they've had poor government there for so long, endemic corruption too, have not helped matters. Not far from failed state status.

Hans, you may be interested to read informative article in yesterday's KTM Post. The article is all about direct investment in Nepal and how it's being directed and so often misused.

Re direct foreign investment in Nepal, latest 12 months figures show that it's off by 63% and the reason they cite are increased production costs in this country.

First last and always I would say foreign investments limited because of corruption in government and the fact that there's no rule of law comparable with the West in Nepal.

Extremely difficult to get your earnings out of Nepal and the taxes are high..

We are doing it but it's not a cakewalk it's much easier everywhere else in the world I think.

You are no doubt correct in your analysis. And if as you point out:
1. The rule of law is not up to international levels in Nepal
2. There is corruption among the people who run the country
3.  Foreign investors have difficulty repatriating earnings
4.  And on top of that, taxes are high
where are the incentives for foreigners to invest in Nepal?
It's a shame really, because the country has vast resources (hydro-power notably) which after decades and decades remain underdeveloped. The proof is that no small amounts of electricity have to be imported from India at great cost to make up for the shortfall. 
Thanks Walran for making those 4 points so clear.

One more thing. Nepal has just raised the minimum threshold governing Direct Foreign Investment to 50 million Nrs. (or 450,00 US Dollars requirement). Prior to this, the minimum required from foreign investors had been 5 million Nrs. (or 45,000 US Dollars).  In making the announcement public, no reason was cited for this tenfold increase.

Golden Opportunity To Investment

i am planing to open Hotel and Restaurant in Kathmandu and Pokhara. i have  good professional team with good experience of Star Hotel. so looking good investor or business partner as well as i have IT, Media and Travel and tour company so if u r interested to invest or be business partner

With those fine credentials and experience in the business, you should have no difficulty whatever in raising all necessary funding you need from your local bank. By going this route, you will also be able to keep 100% of the reins of your business. Why give a piece of the cake to some outsider?  Best of luck in this endeavor.