Jayanti Mala Chapagain knows firsthand the struggles of taking a Nepali IT firm to the global stage. After working as a tech lead and lecturer for years, she founded Spiker Solutions in 2013, an IT service provider specialising in website development, e-commerce solutions, and digital marketing.

Her company, like many others in Nepal, relies heavily on foreign clientele, with over 95 percent of its clients from the United States, the United Kingdom, and Singapore.

But, building trust with foreign clients has been a slow and arduous process.

“When clients from abroad reach out to us through social media, their first question is always whether our company is real or fake. They ask if we have a branch or subsidiary in their country because fraud cases involving IT firms have made them cautious,” Chapagain said.

The lack of legal provisions allowing Nepali companies to establish international branches was a persistent roadblock.

“If we had a branch office or at least a local representative in our destination countries, building trust and securing new contracts would be much easier,” she said.

For many like Chapagain, the government’s new IT ordinance feels like a long-locked door finally cracking open.

On January 10, 2025, a Cabinet meeting in Nepal recommended a series of ordinances to President Ramchandra Paudel.

Among them, the ordinance to amend investment-related laws has sparked quite the buzz, especially for giving Nepali IT firms a long-overdue ‘passport to the global stage’—allowing them to establish branch offices overseas and legally repatriate earnings to Nepal.

It also grants foreign currency exchange facilities through Nepal Rastra Bank, pending approval from the Ministry of Communications and Information Technology.

The ministry will assess a company’s operational capacity before granting approval.

According to the Institute for Integrated Development Studies, Nepal’s IT export industry generated approximately $515 million in 2022, accounting for 1.4 percent of the country’s GDP and 5.5 percent of its foreign exchange reserves.

Given the IT industry’s potential and growth, Chiranjibi Adhikari, vice-president of the Federation of Computer Association Nepal and CEO of One Cover Private Limited, described this as “a game-changer for Nepali IT firms to expand globally”.

The policy also enables Nepali IT companies to acquire up to 20 percent shares in foreign firms, encouraging cross-border collaboration. Nepali employees working for foreign companies can even receive sweat shares, and equity compensation that rewards their contributions, as per Adhikari.

Beyond market expansion, the ordinance scraps the Rs20 million cap on foreign investments, opening the floodgates for global capital in Nepal’s IT sector. So, experts see the ordinance as an opportunity to boost foreign exchange earnings and facilitate technology transfer through exposure to global markets.

While Adhikari maintains an optimistic outlook, there are still some lingering concerns surrounding the ordinance.

“This is just an ordinance for now; we need more clarity on its implementation,” Chapagain said. “Will it apply to new or only established IT companies? While Nepal has given the green light, foreign countries have their own policies”.

The government made changes in the IT-related law through ordinance but that need to be superseded by replacement bill in the first meeting of the House session to take place after introduction of the ordinance. As per the constitutional provision, the government on Friday presented six bills to replace various ordinances. The replacement bills now must be endorsed within 60 days of the commencement of the House session. During this course, the legislature may change some of the provisions included in the ordinances.

Nepali branches might be welcomed in some countries while others might require local partnerships. Government-to-government lobbying will be crucial at the time, according to Chapagain.

Suresh Pandey, CEO of SMTECH Technology, has similar concerns. While the ordinance opens the door for Nepali IT companies to venture globally, he pointed out several hurdles such as limited international recognition, inexperience, funding shortages, and fierce competition from established global players.

“For success, we will need government support in strengthening brands, enhancing operational efficiency, and ensuring alignment with global standards,” Pandey said.

Bureaucratic hurdle is another challenge.

“The only thing that could kill this newfound opportunity is the bureaucratic hurdles,” said Nara Bahadur Thapa, former executive director of Nepal Rastra Bank’s research department.

“The ordinance requires Nepal Rastra Bank to provide foreign currency exchange facilities to IT companies, but only after the Ministry of Communications and Information Technology’s approval. This multi-step process could lead to bureaucratic delays,” he warned.

He argued that the central bank should be solely responsible for handling foreign exchange facilities, rather than sharing this responsibility with the ministry.

As per Thapa, if the government had assigned the entire process to Nepal Rastra Bank, as countries like India have done, it would have been far more efficient. The current structure risks creating unnecessary hurdles.

“The unclear tax policies and administrative inefficiencies could dissuade IT firms from fully embracing the new opportunities,” adds Thapa.

Beyond policy changes, Nepal’s IT infrastructure needs attention. “Internet connectivity and electricity remain the major bottlenecks,” Pandey said. “We have skills, talent, and enthusiasm, but without stable infrastructure, we can’t compete internationally.”

Pandey stressed that Nepal needs to ensure more efficient internet connectivity and stable electricity supply to attract multinational companies in the country.

Another hurdle is the absence of efficient data protection laws in Nepal. Chapagain pointed out that foreign firms often evaluate a country’s data security measures before entering into partnerships.

“Nepal does not have a unified data protection law. This creates trust issues when negotiating with international clients,” she said.

Currently, Nepal follows the Privacy Act of 2018, which only imposes data security requirements on public bodies, leaving private companies largely unregulated.

Unlike other nations with dedicated data protection authorities to enforce compliance, Nepal does not have a regulatory body overseeing data security accountability.

Despite concerns, the ordinance marks a critical shift in Nepal’s approach to IT sector growth. With policies supporting international investment, employee incentives, and expanded industry recognition, this could be Nepal’s moment to either carve out or gear up for a strong presence in the global IT arena.

Yet, as experts point out, whether this ordinance will genuinely reshape Nepal’s IT landscape or lapse as yet another policy pledge will depend on how well it’s executed, cutting red tape, and sustaining strong government backing.

“This ordinance is wonderful news, but bringing a policy alone is not enough—it has to be implemented in a way that benefits IT companies of all sizes,” Chapagain said.

“The government needs to create an environment where people who want to work can actually get things done, instead of being stuck in the maze of unclear bureaucracy”.