Agriculture is the main bone of the Nepalese economy, contributing approximately one-third of total GDP. A total of 70% of the total population still depends on agriculture for their subsistence. However, the growth rate of agriculture has not been encouraging, due to low investment both by the GON and the farmers themselves. The Nepal Trade Integration Strategy 2010 focuses on the development of cardamom, ginger, honey, lentils, tea, noodles and medicinal herbs/essentials oil as priority export products.
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Agriculture in Nepal
Looking to invest in Agriculture and Agro-based industry?
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Herbs Processing
Working Capital
50.4 % of the population is engaged in agriculture sector.
Cultivable land
28% of the total land area is cultivable land
Favourable Climate
The focus on high value organic crops is increasing
TAX / VAT
100% of Tax exemption for 5 years from the date of business operation
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Are you looking to invest in Agriculture and Agro-based industries in Nepal?
Incentives
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Maximum permissible FDI in agriculture is 100% excluding negative lists
Agriculture comprises of 26.9% of GDP 25% of the total land is cultivable 70% of the population is employed in the agriculture sector |
40% tax exemption on fruit-based brandy, wine, cider-producing industries established at under-developed areas
Effective tax rate of 70% for agriculture industry that provides direct employment to at least 100 Nepalese national during a whole year 0% VAT on primary and basic agricultural goods |
| Industry Manufacturing Agricultural Tools (Established within Ashadh 2082 (Mid-July 2025) | 100% of Tax exemption for 5 years from the date of business operation. |
| Domestic Tea/Dairy Industry (Domestic Tea Production and Processing industry, Dairy industry, Textile Industry) | 50% Concession on the tax rate otherwise applicable |
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Agricultural Business
(agro-income) Registered as any firm, company, partnership firm and other corporate body (NB. The provincial government will enact an Agriculture tax law in the future.) |
100% tax exemption
Provided that a 50% tax rebate on the applicable tax rate is provided to the income earned by agriculture business, business of dehydrating vegetables and cold stores operated by any firm, partnership, company and other corporate body |
Industries Based on Agriculture and Forest Products
- Fruits farming or fruits processing;
- Production, processing and storage of food products;
- Animal husbandry, birds farming (including ostrich), animal breeding, challa kadne business, and production and processing of meat;
- Industries producing milk and processing of dairy products;
- Fishery, production, processing and packaging of fry;
- Industries producing animal feed from Argo-products as the primary raw materials;
- Silk farming and processing;
- Tea garden, tea processing;
- Coffee farming and coffee processing;
- Herbs farming, herbs processing;
- Production of vegetable seeds;
- Vegetable farming, vegetable processing;
- Establishment and operation of green-houses;
- Bee keeping (bee breeding, honey production and processing;
- Floriculture, flower processing (making of garland, decoration, making bouquet, including production of seeds);
- Nursery business, establishment, protection and management of botanical gardens, inclusive of tissue culture;
- Rubber farming, preliminary processing and operation of rubber;
- Operation and management of cold stores, agriculture markets;
- Establishment and management of a community, leasehold, partnership, private forest and agriculture forest, and other non-timber forest products;
- Commercial farming and processing of cash crops (such as sugarcane, cotton (kapas), sanpat, sajiwan, sweet sargam, stevia, tobacco, jute, alaichi, keshar, oil seed. Mashala cultivation, dalahan, etc. and production of their seeds);
- Bet, bamboo farming, bet, bamboo and other natural fiber products;
- Processing of seeds;
- Wood industries including Shaw-mills and furniture;
- Wood industries such as parquetting, seasoning, treatment plant, ply wood, composite, board;
- Industries based on other non-timber forest products including paper and resin;
- Industries producing mushroom, tissue culture (producing plants through new technology), Argo Forest;
- Cotton farming, production and processing of cotton and cotton seeds.
Categories and Sub-categories for FDI
Fruit Processing
Vegetable Processing
Establishment and operation of green house
Silk processing
Tea Processing
Coffee Processing
Herbs Processing
Rubber processing
Cold Store (For Storing Local Fruits and Vegetables)
Natural fibers products processing
Paper, resins and other non-timber based industries
Producing plants through new technology (Tissue Culture & others)
Cotton processing
Documents Required
Foreign investor/s desiring to invest in Nepal whether as a wholly foreign owned enterprises or in a joint venture with Nepalese/foreign promoters are required to apply to the DOI with following documents.
Preliminary Feasibility Report (must include following information)
- Project Design
- Estimated Cost of the Project
- Proposed Financial Resources
- Business/Operation Plan
- Preliminary EIA Report
- Proposed Revenue model
- Proposed Royalty / Fee to Government
- Joint Venture Agreement (JVA), in case of more than one investor
- Citizenship certificate of local investor or Certificate of Incorporation, including Memorandum of Association and Articles of Association, Shareholders register, tax clearance certificate if the local investor is a company.
- Notarized Copy of passport of foreign investor or Certificate of Incorporation, including Memorandum of Association and Articles of Association if the party is a company
- Bio-data / Company profile of the foreign party
- Financial Credibility Certificate (FCC) of the Foreign Investor provided by a home country bank or domiciled country bank
- Authority letter from the concerned companies or individuals to carry out any necessary work on their behalf, if applicable
- Other documents as demanded later based on the progress Documents required at Company Registrar Office, Local Authority, IRD, DOI, and Bank, are more or less similar as explained above (in case of projects up to NPR 6 billion).
