Buying a property or apartment as a foreigner in Nepal is a frequently asked question among expats, investors, and NRNs (Non-Resident Nepalis). Many people want to know; can foreigner buy an apartment in Nepal under current laws?
The answer is not straightforward, as property ownership for foreigners comes with specific restrictions, conditions, and evolving policies. This article explores the legal framework, challenges, and possible solutions for foreigners interested in Nepal’s real estate market.
Overview: What the Law Currently Says
1. Civil Code & Land Act
The Muluki Civil Code 2074 BS (2017 AD) contains a provision (Section 432) that prohibits transfer of immovable property (land or property) to foreigners without government permission.
If such a transaction is made, the law states the document is void and property may revert to the government.
2. Foreign Investment & Technology Transfer Act (FITTA), 2059 BS
FITTA allows foreigners or foreign companies to make investment in Nepal under certain conditions. However, it does not unambiguously permit residential property purchases in one’s personal name. Rather, purchases allowed under company names or business-driven purposes.
3. Budget Speeches & Policy Signals
There have been budget statements that suggest the government intends to allow foreigners to buy apartments under certain conditions.
For example, a budget statement declared intentions to allow foreign citizens to buy apartment units in buildings with more than 100 units, with up to 20% of the units sold to foreigners in foreign currency. However, as of now, those provisions are largely proposed, not implemented.
4. Non-Resident Nepali (NRN) Rights
NRNs have more flexibility. Under NRN Act / related rules, NRNs of Nepali origin can own immovable property within certain ceilings.
For example, limits on land for NRNs in Kathmandu Valley, Terai, etc. They are treated differently under the law compared to non-Nepali foreigners.
So, in short: under current laws, foreigner generally can not directly buy residential apartment in their personal name in Nepal. There are legal possibilities via companies, joint ventures, or NRN status. Also, many proposed reforms are pending or in discussion.
Legal Paths / Workarounds for Foreigner to Buy an Apartment
Even though foreigner can not directly buy land or an apartment in their own name under the current law, there are some practical and legal paths that have been used or proposed. Each comes with its own conditions and risks:
1. Registering a Company in Nepal
A foreigner can set up a Nepal-registered company with proper approvals from the Department of Industry, Investment Board, and Nepal Rastra Bank. Through this company, property may be purchased for business purposes.
While this works well for commercial real estate, the use of company ownership purely for residential apartments is still a grey area unless laws specifically allow it. However, it remains one of the most straightforward ways foreigners invest in real estate projects.
2. Joint Venture with a Nepali Citizen or Company
Another common path is partnering with a local citizen or developer. The property is technically registered in the Nepali partner’s name, but contractual agreements give the foreign investor rights to use or profit from it.
This method, however, requires strong trust and airtight legal contracts, since the foreigner’s name is not on the official title deed.
3. Long-Term Lease Agreements
Leasing is a safer, more practical alternative. Foreigners can enter into long-term lease contracts sometimes for decades that provide full usage rights without ownership.
This is particularly popular for commercial properties and can also be applied to apartments. The downside is that, unlike ownership, the asset cannot be sold or passed down.
4. Using NRN (Non-Resident Nepali) Status
Foreigners of Nepali origin who hold NRN cards have much more flexibility. The law allows NRNs to purchase apartments and land within certain ceilings (with limits on land size in Kathmandu, Terai, and hill regions).
For second-generation or diaspora Nepalis, this is often the best route to invest in Nepali real estate legally and securely.
In short: While direct personal ownership of apartments by foreigners is still largely restricted, these paths company setup, joint ventures, leases, and NRN privileges provide legal or semi-legal workarounds. Each option requires proper legal consultation and careful planning to avoid disputes or compliance issues.
Practical Challenges Foreigner Face in Buying an Apartment
Even if a legal path is available, there are many hurdles. Here are the main challenges:
1. Regulatory Uncertainty and Delays
Laws are often in draft or proposed form. Although budget speeches promise changes, the implementing regulations are not always in place. Foreign investors may face confusion or delays because rules are not yet fully refined.
2. Ambiguity in “Apartments” vs “Land” Definitions
Much of the law refers to land (agricultural or non-agricultural) and “immovable property.” It is not always clear whether apartment units in multi-unit buildings are treated the same as land. Do they count as “land” or “immovable property” under laws that restrict foreign ownership? Some budget proposals suggest allowing sales of apartments to foreigners under certain threshold units, but until regulation is updated, ambiguity remains.
3. Foreign Currency Regulation & Repatriation Issues
If a foreigner buys via foreign investment, there is the issue of remitting funds, compliance with Nepal Rastra Bank, forex regulations, and if/when profits or resale proceeds are repatriated. These financial logistical barriers are significant.
4. Ownership Registration and Title Issues
Nepali property law requires proper documentation (Lal Purja) and clear title. Foreigners must ensure that property documents are clean, land is registered, taxes paid, etc. Verifying chain of title can be difficult in some cases. Risk of fraud or misrepresented ownership is higher without local legal advice.
5. Fees, Taxes, and Compliance Costs
Even for company-owned purchases or leases, there are regulatory fees, registration taxes, legal fees, investment approval costs. These add up. Foreigners must budget not just purchase price but transactional, legal, and ongoing compliance costs.
6. Ceiling Limits and Land Use Zoning Restrictions
For NRNs and legal entities, there are often ceilings on how much land or property one can own. Further, some zones (heritage zones, border regions) may have special restrictions or prohibitions. Urban planning laws and zoning rules might prohibit certain uses.
Recent Policy Moves & What Could Change
Because many stakeholders (developers, real estate associations) have been pushing for reforms, some recent policy signals are relevant:
- The Nepal Land & Housing Developers Association has urged the government to implement budget provisions that allow up to 20% of units in large apartment buildings (100+ units) to be sold to foreigners and in foreign currency.
- Some budget speeches have mentioned relaxing restrictions, but actual amendments to Civil Code / Land Act are required to fully legalize such measures. The lack of implementing regulations remains the bottleneck.
Solutions & Best Practices for Foreigners Who Want to Buy Property in Nepal
If you’re a foreigner considering to buy apartment in Nepal, here are practical recommendations & best practices:
- Engage a local real estate lawyer early.
You’ll need legal clarity on whether the building permit, joint ownership act, housing ownership laws, Civil Code, etc., allow your intended purchase. Lawyers can also check Lal Purja, taxes, title clearance. - Use a Nepal-registered company or business entity if you plan to hold property associated with business or commercial activity. Structure it clearly, align with FDI regulations, register investment, get approvals, and document purpose of property use.
- Explore joint ownership with local partners
A trustworthy Nepali partner or local company can hold the title, while you have contractual rights (lease, profit-sharing, usage). Be clear in contract about responsibilities, exit strategies, and rights. - Consider long-term leases
If full ownership is blocked or complex, leasing gives many benefits: usage rights, near-yield, less legal risk. Lease terms (duration, renewal conditions) must be clearly spelled out. - NRN route if applicable
If you are of Nepali origin, obtaining NRN status/card can give you many rights similar to citizen (within ceilings). NRN status is under MoFA and has rules to follow. Proper documentation (NRN card, etc.) is essential. - Stay updated on policy changes
Because laws may change (Civil Code updates, budget amendments), keeping track of announcements is critical. Sometimes a provision is announced but implementing regulation lags. - Finance & currency planning
Plan how money is brought in (foreign currency conversion, bank approvals), how purchase price will be paid, and if resale / renting income needs currency transfer. Having clear financial planning reduces regulatory and tax risk.
What Foreigners Should Watch Out For — Risks
- Legal invalidity: If a purchase is made in violation of Civil Code Section 432, government can declare it void.
- Regulation changes: If policy reverses or implementing laws don’t follow budget speeches, what was permitted in principle may not work in practice.
- Ownership ambiguity: If “apartment units” are considered “immovable property,” may face same restrictions as land.
- Repatriation of money: Tax, foreign exchange, banking laws may affect ability to move profits or resale proceeds abroad.
- Market risk: Property values might stagnate or fall; property in areas poorly serviced may lose value.
Case Example(s): Can a Foreigner Buy an Apartment?
- According to Ekantipur (2025): The government introduced a provision in the budget to allow foreign citizens to buy apartments, particularly that in buildings with more than 100 units, up to 20 units could be sold to foreigners, but implementation is still pending due to lack of amendment to existing laws.
- Developers and business associations have urged reforms so that property law aligns with real estate business growth, foreign investment, and housing demand. But as of early 2025, nothing fully enabling foreign personal ownership of residential apartments has been implemented.
Conclusion: Is It Possible Now? What Foreigners Must Do
Yes, but very limited and conditional. Direct ownership of a residential apartment in one’s personal name remains mostly prohibited. Foreigners can own property via a Nepal-registered company, lease long term, or use joint venture / NRN status.
If you are considering buying an apartment, here’s a checklist:
- Check if the building is in a large project that the government has approved for foreign participation in apartment sales.
- Consult legal status: is the building permit, ownership law, and civil code supportive?
- Plan your entity structure (company, joint venture, NRN) and documentation.
- Get clear cost estimates—purchase price, legal fees, approval fees, currency conversion, etc.
- Confirm rules about repatriation, renting out, profit extraction in foreign currency.
Future Outlook & Policy Suggestions
- Amend Civil Code / Land Act to clearly allow foreigners to buy apartments (in specified projects) under conditions.
- Set up implementing regulations for budget provisions that allow foreign purchase in apartment buildings with >100 units.
- Improve clarity on “apartment unit” definitions so they are distinct from “land” in legal texts.
- Simplify foreign investment, forex, and tax processes related to property purchase, to attract foreign capital.
Read More: Luxury Apartments in Kathmandu for Sale: Experience Unmatched Boutique Living at Aabran Villas
