Foreigner open business in Nepal

Hi I am from Nepal now I am studying in india I have planned to open a restro bar in 3 places pokhara kathmandu and darchula 3 outlets in my home town I will invest myself a uniqe bar and for pokhara nad ktm I needed investor partnership if u intrested can msg me I am intrested to do buissness in international foods like chainese viatnami and thai foods if u are intrested inbox me thank you

Hi! Personally, I like your idea to open a small business in Kathmandu and sell vietnamese food.  But if I may suggest, the first thing I would do, were I in your place, would be to come to Nepal on a tourist visa, and stay here maybe 2-3 months to first talk to the friends you say you have here and consult with them. See what they have to say about your project? What do they think about the idea?
Do they think the nepalese who like to eat a lot of rice would similarly appreciate vietnamese style food and taste?  And other people, of different nationalities?
What I am getting that is that before you do anything, try to have as good an idea as possible to first and foremost determine what the demand might be for good vietnamese food in the nepalese capital? (which I have no doubt you know how to do!) Has anyone does a survey on this? How big is that demand? Do you have any present indications on this at this point that leads you to believe that the demand is there? Anyone else in the field now, in Kathmandu? If so, you might wish to go there and see their restaurant, and try to get an idea of how well they are doing? Is their place full? With what kind of seating capacity, and so on?
I know Japanese restaurants are succeeding quite well, and one japanese restaurant in particular has at least two or three branches in the city here....and expanding, the owner being a very nice and astute business person. His place is very popular. But for vietnamese food, I have no similar information at my finger tips. Also there is a basic difference between this person and your good self. He is nepalese (and requires no visa, whereas you are a foreigner/citizen of Vietnam, and you do)  So do check this out with a lawyer in Kathmandu, but I think you will find that being a foreigner, you will most definitely require a Business Visa, and issued, before you can even open that restaurant you have been dreaming out, so it may not be so simple as it sounds, to implement the project.
As the lawyer can explain, Foreign Investment here is regulated by the Foreign Investment and Technology Act of 1992, and that Act regulates Foreign Investments in Nepal. Likewise, the Department of Industry (DOI) whose approval you will require and the Rastra Bank are the regulating bodies to deal with all FDI in Nepal. And to get a Business Visa from Immigration, the DOI has to first approve your Application for FDI and give their Recommendation letter, so Immigration can then grant that business visa you require. So that is the starting point...is to meet their financial and other requirements. Back in 2012, the practice of DOI was that any proposal involving foreign investment below $20,000 was NOT considered for approval. Four years or so later, my understanding is that it was increased to $50,000 minimum. But in current 2017, do check it out with the lawyer,  but don't be surprised if the minimum has now been increased to as much $100,000?
Next step, in my view, and assuming that you have done your marketing survey and are satisfied that the demand for vietnamese food in Kathmandu is real and and/or with good potential demand to insure its success, next all important consideration:  In which part of the big city, is best in terms of most appropriate location so you can attract the greatest number of clients? Kupendole? Lalitpur? or some other area? I think this is another good reason for coming to Kathmandu and trying to determine all that before you take things any further. You may find that rents vary widely in Kathmandu, depending on the location or area you determine is best for a restaurant offering that special cuisine. Do you know if, as things now stand, some vietnamese people are not already congregating in any one part of the city. If so, that might be the better place for you.  Like in Kathmandu, for example,the chinese tend to congregate in or about Jhyata. So lots of chinese restaurants there that I saw!
All I can tell you is that a french restaurant, run 100% by french lady, failed in central Thamel some five years ago. I remember her restauration was excellent, but her restaurant was not at street level, but upstairs of this very fancy building, and location may have been the cause of the closure. I was told her rent was in the order of $700 a month but this goes back to on or about 2012 as I said.
As for the rent of a house for you to live in, depends where? Long term rent might be cheaper - like for a 12 months rental - but then what happens if your first business visa is limited initially to (only) 6 months, which is common?  Do talk to a lawyer about all these things. Doing business in Nepal is not so simple as it might first appear, especially for foreigners.
I love vietnamese food, myself, so if you do open a restaurant here, I will rush to be your first client, on opening day!  By the way, check out the 3 or 4 different "Farmers' Markets" held every Saturday in Kathmandu. You can sell your vietnamese food products there, I am sure, with great success. The French lady did, I know, selling pates, rolls, custards, etc.  Good active business there, on Saturdays.
Good additional outlet for your products, very popular with foreigners.

Hi. My friends in Japan said that I can not open a small business in nepal because it is too difficult and not all nepal people like Vietnamese food. Only my close friend always support me. Sometimes I really want to give up because I feel like opening up a small business in a culturally different country,difference in taste is really hard but I think if I do not dare to realize my dream, what else can I do? So every week I make Vietnamese food for my friends who nepal to try.
This December I will travel to Nepal to learn more about restaurants, food and nepal culture.
Proof of financing for a business visa is also a problem. I think I need at least $ 20,000 but when I know I need at least $ 100,000 now I was surprised. I would ask my close friend to contact a lawyer to find out more.
Thanks for the information you shared 😊

Biren1234 wrote:

Hi I am from Nepal now I am studying in india I have planned to open a restro bar in 3 places pokhara kathmandu and darchula 3 outlets in my home town I will invest myself a uniqe bar and for pokhara nad ktm I needed investor partnership if u intrested can msg me I am intrested to do buissness in international foods like chainese viatnami and thai foods if u are intrested inbox me thank you

I think I want to open my own business so sorry. Wish you success with your business 💪

well to rent a house its depend on location but its possible to open resturant on your own but u need nepali helper who helps you with all of the things what you need.i guess we dont have vietnamis restaurant.****

Witness the last two entries - I've noticed this phenomenon many times since coming to Nepal. In my experience, nepali people never take "No" for an answer! They will keep on trying and trying, in an effort to convince us foreigners to the contrary! Sometimes I get the feeling, they just don't get it (or more likely, do not want to get it)
Now I have one piece of friendly advice for my fellow foreigners: if this kind of thing should occur to you in the course of bargaining, conversations, or in any other verbal context with them.....whatever you do .....keep your COOL (seriously!) and keep YOUR voice down. Never raise the ante! This is most important, vital really. Even if you have already and politely said "No" two or three times to your nepali interlocutor, the last thing you want to do is raise your voice. In their culture (and let's face it, here we are not in Italy, France or Spain!!) and therefore To THEM,  it's an UNFOREGIVABLE and totally unacceptable behavior. This sends these types of people into a complete state of inner indignation, furry, revulsion, call it what you will. At that point, the nepali person you are talking to you will turn to you and say: "WHY are you shouting at me like that???" (this is a pretty standard phrase)
So, let's face it, at that point in the conversation turned "encounter", the nepali person will be right and we, the FOREIGNERS, WILL BE WRONG. We've overstepped their acceptable limits, in their culture.
Can't win!!

I think Jl is right. Nothing easy about doing business in Nepal. But if someone has the 100 grand to spend, why not? Expat friends of mine did it but they told me that some 3-4 years back, Department of Industry (DOI) would issue a letter of recommendation addressed to Immigration at Visa renewal time much more easily which in turn enabled foreign investors in those days to get Business Visas (BV) with a validity of up to 5 years. Since then, DOI has new but stricter rules and nowadays, the first/initial BV is likely to be limited to 6 months only (renewable). Then if everything goes well, the investor can hope to obtain a one year BV after that (renewable) - Present fee for one year BV is $300.00
My same friends tell me that you must hire an accountant to keep all your business accounting up to date in a specially designed and acceptable formal on one's office computer. The accountant will then prepare the financial accounts for each successive year, usually for each fiscal year ending July 15th. You'll also need to hire and pay an Auditor who comes at regular intervals during the year to verify the accountant's work. Accountant fees vary from case to case according to work load and schedule and same for Auditor. But for Auditor and absolute legal requirement of his verifying and signing once a year FY financial accounts,  his Audit Fee is likely to amount to + or - 20,000 Nrs yearly.
My friends also advise that not only these accounts have to be filed with the Administration in duplicate places but it is best - they say - to use one's lawyers to file them on your company's behalf against SIGNED receipt. This way the foreign business owner(s) in Nepal will always be in a position to provide PROOF of filing, to avoid possible very costly fines if one cannot provide that proof. Let's just say that there have been notable past cases of that happening. And if your file cannot be located for any reason (files do get lost in Nepal) fines imposed can be extremely costly - really big money like the equivalent of $2,000 or $3,000 I've heard about.  Last but not least,  my friends say that foreigner-investor should use the accountant or Auditor of your choice to get for you - on your behalf - the absolutely vital and required yearly "Tax Clearance Certificate" as soon as the FY accounts have been completed and the business profits of that FY are known and declared to Tax Authorities.  My friends use the Auditor (could be accountant too, if you prefer)  to do that and he is the one who goes over and pays the tax to the tax office, as and when due, and at that time gets you - the investor - that Tax Clearance Certificate, So be sure to let him get that Certificate for you because they also point out,  9 times out of 10, someone will need to pay additional money under the table to get it. Don't get involved would therefore be my best advice based on what's been said to me. Problem is that with no under the table stuff, the Tax Office has the perfect right to keep the foreign investor waiting up to 4 years before issuing the Certificate you require, no joke!  And without that one document, the foreign investor cannot get his/her business Visa renewed. Not much choice I am afraid. Friendly advice.

hi I am from Bangladesh. i want to invest in thamel for bengali restaurant. it possible to start a business there with nepali partner? please let me know.

Like this knowledgeable and very wise lady contributor wrote on this site, never invest in Nepal more than you can afford to lose. Don't know how much you know about the difficulties of doing business in this country, but it ain't easy, that's for damn sure. But if you have the money, no problem about finding a partner. They'll be some many candidates all queuing up at your door begging to be considered, you may need to reinforce your front door! Good luck.

Right you are. And I will go a step further.  I think I am correct in saying that the number of foreigners who've gone into the restaurant business in Kathmandu and made a success of it over the longer term is fairly limited. Only three names come to mind, and I think you'll find that they all have one thing in common: part of their success story may well reside in the fact that they all control their business 100% , with no nepali or any other kind of partner. As captains, each one runs a very tight ship this way and they are to be commended for the great job they've done. Think twice before investing with a co-partner, and check out what I have just said. It may well be the key to success in this line of business.

There are a lot of good insights from the contributors to this topic; i'd certainly stick to their advice.

$100,000 initial investment in what is Nepal today sounds simply outrageous.

If anyone with that kinda a money is willing to invest in Nepal; then they deserve to be robbed blind if they can't see for themselves what kind of environment Nepal really is and how it is willing to protect the investor or at least offer incentives and tax cuts.

The restaurant business requires an affordable location, an experienced chef and enough money to cover expenses for the first year before starting to make a name for yourself and start seeing the money coming in.  That's standard procedure for any business activity.

Vietnamese cuisine ? I've seen many decrepit Japanese and Korea restaurants around Nepal; and the only authentic things about them were the prices and the pseudo manager.  Almost all Nepalese youngsters search for jobs abroad and end up as cooks; once they come back from Japan, Dubai etc they open their own restaurant - and some actually make very decent dishes too.

If i had to bet my bottom dollar in Nepal; it wouldn't be on such a venture.  And especially after hearing from expats and business men about how vicious competition and the authorities can be towards foreigners making a buck.

Good luck.

I could not agree more with you Gulfport. One would think that in a country like Nepal, they would welcome foreign investment with open arms. But like you say, conditions are such here now, that they do exactly the opposite. They go out of their way to make foreign investment here as difficult as possible, not to say impossible. It's true, they don't want you to make a buck. It's OK if they make money, but not the foreigners. In this department, they have a monopoly. I know this sounds harsh, but they'll rip you off every time (if they can). For them, it's like a sport, so they'll keep trying. Practice makes perfect.  One has to admit that they are clever as hell about it.

Pilar2016 wrote:

I could not agree more with you Gulfport. One would think that in a country like Nepal, they would welcome foreign investment with open arms. But like you say, conditions are such here now, that they do exactly the opposite. They go out of their way to make foreign investment here as difficult as possible, not to say impossible. It's true, they don't want you to make a buck. It's OK if they make money, but not the foreigners. In this department, they have a monopoly. I know this sounds harsh, but they'll rip you off every time (if they can). For them, it's like a sport, so they'll keep trying. Practice makes perfect.  One has to admit that they are clever as hell about it.

Yes, that's what made me decide to leave; and luckily it was 10 days before the major earthquake a few years back.  Anyway, if you look into the past topics here; there was a wonderful in depth analysis of Nepal's business and cultural aspect in regards to expats, written by a long term expat living in Nepal. 

Needless to say he lost every penny he had; and even opted to change the name of the country to The Kingdom of Thieves.  As you mentioned; he noted that Nepalis constantly rip each other off; its fair game if you let your guard down.  For example, they expect a reward on top of their salary for not stealing or robbing the place; as if its a natural thing to do - sort of like gypsies mentality really -

They will always charge you a higher price when buying water, food or anything; but when you tell them the market price of such items they will smile and say ok.  When i ask them why they do that they say cause you're rich and we are poor, therefore its ok to make you pay more cause it won't break the piggy bank - yet to us thats being dishonest - truth be said its something done in many developing countries. 

They are so practical about making money that we can't see it coming cause we got western morals; look at the orphanages in Nepal; 90% of the kids do have parents and a home.  But their parents send them there cause its FREE schooling and meals - why not make use of it ?   Once i had a parking attendant ( maybe 17 yrs old ) trying to pimp his aunt to me; when i asked why, he said she's a widow, therefore its a win win situations; so i asked him how ? He said i make money and she enjoys the time with you.  That's when i realized it was time to pack up and leave; you can't beat such ruthless mentality on their own soil.

It's absolutely true, the nepali attitude towards money is foul - unbearable really. Problem is that there is no end to it, with totally unpredictable medium to long term consequences for the country as a whole, in future. No point even trying to point out any of this to them, because their attitude is that they know best and they will take offense if you do as much as to try to convince them otherwise. In business, this mentality creates havoc. Forget, too, about having recourse to a lawyer! In Nepal, the fact is that the best lawyers are the worst but these bad wolves will corrupt the judges, eat any "good honest, reputable sheep lawyer" a foreigner will have retained in the process, and of course win their rotten case hands down. Morality may stop foreigners from adopting such deplorable tactics, but not nepalis when money is at stake. They want the dough at any price. The end justifies the means. Ask any nepali, the number 1 lawyer in the country is also number one scoundrel. If you mention his name to nepalis, they will comment "oh yes, of course, but you know that here in Nepal, he is a National Hero"....
As for what goes on in orphanages you mention, everyone knows it's a scandalous situation but that's another matter.
Morality, what morality?

It was not so long ago that Gulfport remarked here that the size of a "$100,000 investment in Nepal today appeared to you to be simply outrageous". For information only, the authorities have just defined the size of foreign investments in Nepal using these precise newly defined parameters:
Size of investment in "a small industry":...............US$1 million (or 10 times again as much as your figure)
Size of investment in "medium sized industry":...US$1 to 2.5 millions
Size of investment in "large scale project":...........US$2,5 millions and over
Nepalis think big!!

This bit of news will not make it any easier for small entrepreneurs who may still aspire to set up shop in Nepal and get a coveted Business Visa, that's for sure.
I can still remember the days - and not that long ago either - when only $20,000 was required. Times a'changing!

you are most welcome in Nepal and for business dream.Normally in Nepal for house rent per month cost Rs,20000/-

***

Every country has risks and issues with investing there. Some are easier than others granted but the third world is always a challenge and one of the places with the greatest possible gains too as these economies develop and grow without a lot of the regulation that we have in the US and West.

We have money in Nepal and have no issues. My wife is a national and I am American.  We can set up restaurants, internet businesses (infrastructure), buy land, and do just about anything we want by putting it in her name/ our corporation there are no prohibited industries to us. There might be if you are not tied in with a native.

If you put the money in correctly through Rastra bank you can get it out.  Repatriation is always and issue there. We will be moving another 100K there but if you live there who cares about taking it out? I haven't seen the banks fail yet and they pay 11-12% on 6 month to 1 year money if you are just parking it. Banks still loan money on houses at 14%  or more and they get their money back when people don't pay. The same is true with other industries as well.

In America you have wolves too, we just settled on case for $300,000 and another for $100,000 in our
larger business because the legal fees to win our totally justifiable case would have been double or triple that with no promise that right would prevail and the time would be very long.  The smaller one was fraud but you just cut your losses and focus on the bigger money you will make without the time, energy, and hassle. Some we stick out to the end.. It's a choice.

The attorneys are by and large corrupt or inept, there is no clear rule of law that is enforced yet. Despite this many people have businesses large and small and make a lot of money. Venezuela is way worse than Nepal and yet I have friends doing solid 500K a year there importing and exporting.

Maybe its not the easiest place to work (definitely not) but it doesn't have all the nonsense of the west either.. God help you if you cut down a tree in your yard in Germany without going through a mile of red tape and the same if you are restoring an old building or castle on your own there. The permit process of a home in Park City Utah has taken me 18 months and is ridiculous in its complexity.

Every single country has its quirks and issues. The key is to learn what they are and the real money is made by navigating those waters once you are aware of the risks and how to mitigate them. Just because you had one bad experience doesn't mean anything. It doesn't mean that it is impossible to do business there. My cousin has a going business in Tanzania of all places and they are more corrupt than Nepal (where he currently lives).

Start slowly, trust nobody completely, and persevere..